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Waste Management (WM) Stock Drops Despite Market Gains: Important Facts to Note

WM
Corporate EarningsAnalyst EstimatesCompany FundamentalsAnalyst Insights

Waste Management (WM) stock declined 1.35% against broader market gains and has underperformed its sector over the past month. Ahead of its October 27, 2025 earnings, analysts project 3.06% YoY EPS growth and 15.79% revenue growth, supported by a 0.42% upward revision in recent EPS estimates. While WM trades at a forward P/E discount to its industry, its PEG ratio is slightly higher, and the waste removal services industry itself ranks in the bottom 36% of all industries, suggesting potential headwinds despite the company's Zacks #3 (Hold) rank.

Analysis

Waste Management (WM) has demonstrated recent stock price weakness, closing down 1.35% at $216.91 against broader market gains and underperforming the S&P 500 by over 5% in the past month. This negative momentum contrasts with forward-looking analyst expectations. For its upcoming earnings release on October 27, 2025, consensus estimates project a significant 15.79% year-over-year revenue increase to $6.49 billion, though bottom-line growth is more subdued at an expected 3.06% rise in EPS to $2.02. Reinforcing a positive business outlook, the consensus EPS estimate has been revised upward by 0.42% over the last month. From a valuation standpoint, the stock presents a mixed picture; its forward P/E ratio of 29.02 is at a slight discount to the industry average of 30.6, but its PEG ratio of 2.69 is slightly less favorable than the industry's 2.53. A notable headwind is the Waste Removal Services industry's rank in the bottom 36% of all industries, a factor that historically correlates with underperformance. The stock's current Zacks Rank of #3 (Hold) reflects this balance of strong company growth forecasts against poor recent stock performance and a challenging industry backdrop.

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Market Sentiment

Overall Sentiment

mildly positive

Sentiment Score

0.20

Ticker Sentiment

WM0.50

Key Decisions for Investors

  • Given the divergence between negative stock momentum and positive forward-looking estimates, maintaining a neutral or 'Hold' position pending the October 27th earnings report appears prudent to validate the strong projected revenue growth.
  • Investors should scrutinize the valuation, as the slightly elevated PEG ratio of 2.69 suggests the stock's price may already reflect its growth expectations, despite the modest discount on a forward P/E basis.
  • Be cautious of the structural headwinds indicated by the weak industry rank, as this could continue to suppress stock performance even if Waste Management delivers on its company-specific forecasts.