Waste Management’s Next Chapter Is Taking Shape for Investors

Key Points

• Waste Management’s Stericycle deal broadens its footprint into regulated, higher-margin services, but integration execution is now the swing factor for results.
• Core collection and disposal remains the profit engine, while the healthcare unit has been the main source of near-term friction.
• A larger dividend and a renewed buyback plan could become the next catalyst if cash flow targets hold.

Investors haven’t exactly sold the news on Waste Management Inc. NYSE: WM, but recent price action suggests they want to see headlines translate into increased profits.

In 2025, Waste Management started to digest its acquisition of Stericycle’s medical waste and secure information destruction business. The acquisition was announced in June 2024 and closed in November of that year. 

For the first part of 2025, that was a tailwind for WM stock.

But as investors discovered after the company’s most recent earnings report, expansion into such a complex, regulated business requires flawless execution, and Waste Management’s results were not flawless.

Revenue of $6.44 billion was up 14% year-over-year (YOY), but basically flat from the prior quarter and missed analyst forecasts of $6.51 billion. A similar story occurred with earnings per share (EPS). The company missed estimates of $2.01 by 3 cents, although the number was up 2 cents YOY.

What Bullish Investors Liked in the Earnings Report

Despite the earnings miss, Waste Management reported strong quarterly results. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) were up more than 15%. The company also grew its free cash flow by approximately 33%, and management forecasts roughly $3.8 billion of free cash flow for 2026.

The company’s core collection and disposal business continues to be an engine of growth with margins expanding to a record 38.4%. Waste Management attributed that growth to disciplined price-to-cost spread and fleet/maintenance efficiencies.

WM Healthcare Solutions Is Where Integration Friction Shows Up

The more mixed read came from the healthcare unit. Waste Management noted that WM Healthcare Solutions is tracking below initial expectations, citing items like deferred pricing actions, customer credits, and ERP-related challenges.

For investors, that’s the key near-term risk: the acquisition expands the opportunity set, but it also introduces more operational complexity. Until the healthcare segment’s revenue cadence steadies and back-office systems normalize, the market may hesitate to pay up for the “next leg” of growth.

Analysts Stay Bullish Despite a Premium Valuation

Since Waste Management’s earnings, analyst sentiment is mixed, which accounts for the Moderate Buy rating. At 34x earnings, the stock is trading at a slight premium, but with expectations of 28x forward earnings, that’s not necessarily a reason to avoid WM stock—particularly true when other metrics are in line with historical averages.

WM Stock Is Consolidating—Not Breaking Down

Waste Management’s long-term uptrend remains intact, but the stock is clearly in a consolidation phase. On the weekly chart, WM has spent much of the past year digesting its strong 2023–2024 rally, carving out a choppy range after failing to hold above the $235–$245 area. That zone now acts as meaningful overhead resistance.

The 50-week moving average, currently near $224, is an important technical marker. WM recently slipped below it and is attempting to stabilize, suggesting the stock is at an inflection point rather than in a confirmed breakdown. A sustained move back above the 50-week line would improve the intermediate-term outlook.

On the downside, support appears in the $205–$210 range, where buyers previously stepped in aggressively. As long as that level holds, this pullback looks more like consolidation than a trend reversal.

Shareholder Returns Could Be the Next Catalyst

With just a few trading days left in 2025, WM stock is up 8.5%. Add in a dividend yield of 1.5% and you have a total return of around 9.5%. Not a bad year, particularly for a business services stock, but it’s a return that’s below the historic average for the stock.

Many investors would like to see more. The company delivered some of that “more” by announcing a 14.5% increase to its quarterly dividend. The new dividend of around 94 cents per share will be payable in the company’s first quarter of 2026. That will also make 23 consecutive years of dividend increases for the company.

In addition to the dividend announcement, Waste Management plans to reinstate stock buybacks in 2026. The company has announced a $3 billion share repurchase authorization.

This combination of buybacks and dividends has management forecasting that WM stock is positioned to resume its historic growth trajectory in 2026 and beyond.