It has been about a month since the last earnings report for Waste Management (WM Quick QuoteWM - Free Report) . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Waste Management due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Waste Management, Inc. before we dive into how investors and analysts have reacted as of late.

WM Beats Q2 Earnings Estimates

WM reported second-quarter 2026 adjusted earnings of $2.02 per share, beating the Zacks Consensus Estimate of $1.99 by 1.5%. Earnings increased 5.2% from the year-ago quarter’s $1.92.

Revenues rose 4% year over year to $6.68 billion but missed the consensus estimate of $6.71 billion by 0.4%. Disciplined pricing and operating efficiencies supported profitability, while Collection and Disposal volume declined 1.8%.

WM Benefits From Pricing & Cost Discipline

Core price increased 5.7% in the quarter, while Collection and Disposal yield improved 3.6%. Higher energy surcharges and increased volumes in the recycling and renewable energy businesses also supported revenue growth.

Collection and Disposal volume fell 1.8%, largely because wildfire cleanup work boosted the prior-year period. Excluding that activity, landfill volumes increased 1.7%, while Collection and Disposal volume declined 0.4%. The strategic exit from lower-margin residential contracts also weighed on volumes.

Waste Management Expands EBITDA Margin

Adjusted operating EBITDA increased 5.5% year over year to $2.07 billion. Excluding wildfire cleanup contributions from the prior-year quarter, adjusted operating EBITDA growth was 9.1%.

The adjusted operating EBITDA margin expanded 40 basis points to 30.9%. The improvement came despite a 60-basis-point headwind from the comparison with wildfire cleanup work and a 40-basis-point drag from higher energy surcharges.

WM’s Collection Business Drives Growth

Collection and Disposal revenues increased 3.7% year over year to $5.48 billion. Commercial revenues rose to $1.49 billion from $1.40 billion, industrial revenues increased to $820 million from $790 million and residential revenues advanced to $911 million from $872 million.

The segment’s adjusted operating EBITDA increased $79 million to $2.12 billion. Favorable price-to-cost spread, lower frontline turnover and disciplined cost management helped offset the unfavorable comparison with wildfire cleanup contributions in the year-ago period.

Waste Management’s Sustainability Units Gain

Recycling Processing and Sales revenues increased to $403 million from $381 million. Renewable Energy revenues climbed to $157 million from $115 million, reflecting higher production following the completion of growth projects.

Combined adjusted operating EBITDA from the recycling and renewable energy businesses increased 32.5%, or $40 million. Higher recycling volumes, automation-related efficiencies and increased renewable natural gas production drove the improvement despite lower prices for recycled commodities, natural gas and renewable fuel credits.

WM Improves Healthcare Profitability

Healthcare Solutions revenues declined to $638 million from $646 million. However, the business generated adjusted operating EBITDA of $121 million, up from $110 million in the year-ago quarter.

The adjusted operating EBITDA margin expanded to 19% from 17%. Effective selling, general and administrative expense management and integration benefits from WM’s core Collection and Disposal operations supported the segment’s profitability.

Waste Management Keeps Expenses in Check

Operating expenses totaled $3.96 billion and represented 59.2% of revenues compared with 59.1% a year earlier. Cost controls and productivity initiatives largely offset higher fuel-related expenses.

Adjusted selling, general and administrative expenses declined to $662 million from $672 million. The adjusted SG&A expense ratio improved 60 basis points to 9.9%, reflecting cost discipline and continued synergy capture within Healthcare Solutions.

WM Generates Strong Cash Flow

Net cash provided by operating activities increased nearly 12% to $1.73 billion. Free cash flow jumped 34.5% to $1.10 billion, driven by operating EBITDA growth and working capital improvements.

WM returned $1.04 billion to shareholders during the quarter. This included $659 million in share repurchases and $379 million in cash dividends. The company also completed three renewable natural gas facilities and a new recycling facility in Denver.

Waste Management Updates Revenue Outlook

WM reduced its revenue outlook to $26.28-$26.48 billion from the preceding quarter’s view of $26.43-$26.63 billion, reflecting lower volume expectations partly offset by higher energy surcharges.

Management maintained its 2026 adjusted operating EBITDA outlook of $8.15-$8.25 billion and free cash flow projection of $3.75-$3.85 billion. The adjusted operating EBITDA margin forecast was raised by 20 basis points to 31-31.2% from the preceding quarter’s view of 30.8-31%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Waste Management has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Waste Management has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.