Waste Management, Inc. (WM) Stock Valuation — PE Analysis
Waste Management · NYSE
Current Price
$224.06
PE Ratio (TTM)
31.6x
Intrinsic Value
$249.06
+10.0% margin of safety
COMPETITIVE MOAT
↑Extensive Infrastructure Network
WM operates a vast network of landfills, transfer stations, and recycling facilities. This scale creates significant barriers to entry for new competitors.
↑Long-Term Customer Contracts
The company secures revenue through multi-year contracts with municipalities and commercial clients. These contracts provide revenue visibility and customer stickiness.
↑Regulatory Expertise and Permitting
Navigating complex environmental regulations and obtaining permits for waste disposal sites is a specialized skill. WM's experience provides a distinct advantage.
INVESTMENT RISKS
↓Environmental Liabilities and Regulations
The company faces ongoing risks from environmental regulations and potential liabilities associated with waste disposal sites. Stricter rules could increase operating costs.
↓Commodity Price Volatility
Revenue from recycled materials is subject to fluctuating commodity prices. This can impact profitability and revenue predictability.
↓Capital Intensive Operations and Debt
Maintaining and expanding its infrastructure requires significant capital investment. High debt levels, as noted in recent analysis, increase financial risk.
Base case
WM base case PE valuation
A base case PE valuation for WM estimates a fair value of about $249.06 per share, against a current price of $224.06. The model assumes 9.0% annual earnings growth, a 31.6x target PE multiple, and a 10% discount rate.
Intrinsic Value
$249.06
Margin of safety
+10.0%
Expected annual return
+2.1%
Base case assumptions: 9.0% annual earnings growth, 31.6x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the WM PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Waste Management, Inc. respond.
Open PE Calculator for WMCompany Overview
Waste Management, Inc. (WM) functions as a premier provider of environmental waste solutions across North America, serving a diverse client base that includes residential, commercial, industrial, and municipal customers. The company's core operations involve comprehensive collection services, which include gathering and transporting both waste materials and recyclables from their initial point of generation to designated transfer stations, material recovery facilities (MRFs), or final disposal sites. Waste Management maintains an extensive network of facilities, owning, developing, and operating landfill gas-to-energy plants within the United States, in addition to managing numerous transfer stations. As of December 31, 2021, its substantial infrastructure consisted of 255 solid waste landfills, 5 secure hazardous waste landfills, 96 material recovery facilities, and 340 transfer stations. Beyond primary collection and disposal, WM offers services in materials processing and commodities recycling. This extends to recycling brokerage, where they handle the marketing of recyclable goods for third-party entities, alongside providing various other strategic business solutions. Its service portfolio also encompasses construction and remediation projects, the responsible management of fly ash and other residues generated from coal and fuel combustion, and specialized in-plant services offering full-spectrum waste management consulting. Furthermore, the company delivers tailored disposal solutions for oil and gas exploration and production activities. Originally incorporated in 1987 as USA Waste Services, Inc., the company rebranded to Waste Management, Inc. in 1998. Its corporate headquarters are situated in Houston, Texas.
Financial Metrics — WM PE Stock Valuation Data
PE Ratio (TTM)
31.6x
PEG Ratio
6.47
Earnings Yield
3.17%
ROE (TTM)
28.9%
Revenue/Share (TTM)
$63.80
Dividend Yield
1.58%
Debt/Equity
2.35x
Frequently Asked Questions
What is the PE ratio of WM?
The trailing twelve-month PE ratio of WM reflects how much investors pay per dollar of Waste Management, Inc.'s earnings. This metric is most useful when compared to Waste Management peers and the company's own historical range.
Is WM overvalued based on PE ratio?
WM's PE of 31.6x combined with a PEG ratio of 6.47 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Waste Management, a DCF analysis may be more appropriate.
How do I value WM stock using PE ratio?
To value Waste Management, Inc. using PE: (1) Compare the current PE (31.6x) against the Waste Management median to assess relative pricing, (2) check the PEG ratio (6.47) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of WM?
WM's PEG ratio is 6.47, calculated by dividing the PE ratio (31.6x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for WM stock valuation?
PE ratio gives a quick relative read — how WM is priced versus Waste Management peers. DCF provides an absolute value based on projected free cash flows. For WM, with a strong ROE of 28.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See WM DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value WM with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.