Waste Management, Inc. (WM) Intrinsic Value & DCF Valuation
Waste Management · NYSE
Current Price
$236.60
Intrinsic Value
$263.79
+10.3% margin of safety
What Is Waste Management, Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Waste Management, Inc. (WM) at $263.79 per share, compared with a market price of $236.6, a margin of safety of +10.3%. The base case assumes 8.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $219.39 to $314.36. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Waste Management, Inc. (WM) Undervalued?
At $236.6, WM trades about 10.3% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
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.
↑Regulatory Expertise and Permitting
Navigating complex environmental regulations and securing permits is a specialized skill. WM's long-standing experience provides a distinct advantage.
↑Customer Lock-in and Contractual Agreements
Long-term contracts with municipalities and businesses create sticky customer relationships. Switching providers involves significant disruption and cost.
INVESTMENT RISKS
↓Environmental Liabilities and Fines
Accidents or non-compliance at facilities can lead to substantial fines and reputational damage. Ongoing environmental stewardship is critical.
↓Commodity Price Volatility
Fluctuations in the prices of recycled commodities can impact revenue streams. This introduces an element of unpredictability to earnings.
↓Shifting Waste Generation Trends
Changes in consumer behavior and industrial output can alter the volume and composition of waste. WM must adapt to evolving waste streams.
Base case
WM base case valuation
Intrinsic Value
$263.79
Margin of safety
+10.3%
Expected annual return
+2.2%
Base case assumptions: 8.2% annual growth, 10.0% discount rate, 27x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the WM valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Waste Management, Inc. respond.
Open DCF 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 Stock Valuation Data
Revenue/Share (TTM)
$63.80
FCF/Share (TTM)
$8.88
ROIC (TTM)
9.0%
ROE (TTM)
28.9%
P/FCF
26.6x
EV/EBITDA
15.6x
FCF Yield
3.76%
Debt/Equity
2.35x
Based on trailing twelve-month data, WM shows a free cash flow per share of $8.88 and a ROIC of 9.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 26.6x and FCF yield of 3.76% are important context metrics when evaluating WM's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of WM?
Waste Management, Inc. currently generates $8.88 in free cash flow per share. At the current price of $236.60, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is WM undervalued?
WM trades at a P/FCF ratio of 26.6x with a free cash flow yield of 3.76%. This P/FCF is in a moderate range. However, whether WM is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value WM stock using DCF?
To perform a DCF valuation on Waste Management, Inc.: (1) Start with the trailing free cash flow per share ($8.88) as the base, (2) project future FCF growth over 5-10 years based on Waste Management industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting WM's risk profile — with a debt-to-equity of 2.35x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to WM?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Waste Management, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Waste Management trends, then discounting those amounts to today's dollars. WM's ROIC of 9.0% shows moderate capital returns.
How does WACC affect WM stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For WM, with a debt-to-equity ratio of 2.35x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 15.6x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See WM PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value WM with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.