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Here's Why Investors Should Hold WM Stock in Their Portfolios Now
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Key Takeaways
WM's integrated network & tuck-in acquisitions support recurring revenues, route density and long-term growth.
WM's pricing and productivity gains lifted adjusted EBITDA margin 40 basis points to 30.9% in Q2 2026.
WM generated $2.02 billion in first-half 2026 free cash flow, supporting buybacks, dividends and investment.
WM (WM - Free Report) benefits from its integrated network, disciplined pricing, technology investments and strong cash generation, supporting sustainable growth. The company’s robust margin expansion and consistent shareholder returns also strengthen the investment case.
WM has a Growth Score of B. This style score condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s third-quarter 2026 earnings are expected to increase 10.1% year over year. Its 2026 and 2027 earnings are projected to rise 8.4% and 11.2%, respectively. Revenues are anticipated to grow 4.5% in 2026 and 5.4% in 2027.
Factors That Bode Well for WM’s Success
Integrated Network Supports Durable Growth: WM's integrated collection, recycling and disposal network supports recurring revenues, customer retention and efficient waste flows. The company’s second-quarter 2026 revenues rose 4.0% to $6.68 billion, while management expects full-year revenues of $26.275-$26.475 billion. The company completed $235 million of solid waste tuck-in acquisitions, adding route density, customers and disposal volumes. Its scale, integrated infrastructure and disciplined acquisitions support durable long-term growth.
Pricing & Technology Drive Margin Expansion: WM continues to benefit from disciplined pricing, automation and productivity gains. In the second quarter of 2026, core price growth was 5.7%, while adjusted operating EBITDA margin expanded 40 basis points to 30.9% despite wildfire and fuel-related headwinds. Collection operating costs increased less than 1.7% despite roughly 4% labor inflation. Management raised its 2026 EBITDA margin guidance to 31.0-31.2%, while WM’s program SmartTruck, designed to help create cleaner, safer communities while giving clients more visibility into their service and billing, is already generating more than $300 million of annual run-rate EBITDA. This reinforces the potential for efficiency gains.
Strong Cash Generation Provides Greater Capital Returns: WM continues to balance shareholder returns with disciplined investment. Free cash flow reached $2.02 billion in the first half of 2026, up more than 56% year over year. During the period, the company repurchased $1 billion of shares and paid $764 million in dividends. At the end of the second quarter of 2026, leverage stood at 2.96X, within management’s target range of 2.5-3.0X. Strong cash conversion supports continued capital returns while funding technology, sustainability and integration initiatives.
Risks to WM Stock
Elevated Debt Burden: Stericycle and ongoing investment have left WM with a substantial debt load. At the end of the second quarter of 2026, current and long-term debt totaled $23.36 billion against $557 million of cash. Leverage stood at 2.96X, within management’s 2.5-3.0X target range and is expected to decline in the second half. Still, the elevated debt burden could reduce financial flexibility if earnings or cash flow weaken while investment and acquisition activity remains high.
Bleak Liquidity: WM's high short-term debt against its cash reserves weakens its liquidity position. At the end of the second quarter of 2026, the company reported a current ratio of 0.91, sequentially dipping from 0.93. A current ratio below one often suggests that a company may not be well-positioned to meet its short-term obligations, which is a red flag for investors.
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Here's Why Investors Should Hold WM Stock in Their Portfolios Now
Key Takeaways
WM (WM - Free Report) benefits from its integrated network, disciplined pricing, technology investments and strong cash generation, supporting sustainable growth. The company’s robust margin expansion and consistent shareholder returns also strengthen the investment case.
WM has a Growth Score of B. This style score condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s third-quarter 2026 earnings are expected to increase 10.1% year over year. Its 2026 and 2027 earnings are projected to rise 8.4% and 11.2%, respectively. Revenues are anticipated to grow 4.5% in 2026 and 5.4% in 2027.
Factors That Bode Well for WM’s Success
Integrated Network Supports Durable Growth: WM's integrated collection, recycling and disposal network supports recurring revenues, customer retention and efficient waste flows. The company’s second-quarter 2026 revenues rose 4.0% to $6.68 billion, while management expects full-year revenues of $26.275-$26.475 billion. The company completed $235 million of solid waste tuck-in acquisitions, adding route density, customers and disposal volumes. Its scale, integrated infrastructure and disciplined acquisitions support durable long-term growth.
Waste Management, Inc. Revenue (TTM)
Waste Management, Inc. revenue-ttm | Waste Management, Inc. Quote
Pricing & Technology Drive Margin Expansion: WM continues to benefit from disciplined pricing, automation and productivity gains. In the second quarter of 2026, core price growth was 5.7%, while adjusted operating EBITDA margin expanded 40 basis points to 30.9% despite wildfire and fuel-related headwinds. Collection operating costs increased less than 1.7% despite roughly 4% labor inflation. Management raised its 2026 EBITDA margin guidance to 31.0-31.2%, while WM’s program SmartTruck, designed to help create cleaner, safer communities while giving clients more visibility into their service and billing, is already generating more than $300 million of annual run-rate EBITDA. This reinforces the potential for efficiency gains.
Strong Cash Generation Provides Greater Capital Returns: WM continues to balance shareholder returns with disciplined investment. Free cash flow reached $2.02 billion in the first half of 2026, up more than 56% year over year. During the period, the company repurchased $1 billion of shares and paid $764 million in dividends. At the end of the second quarter of 2026, leverage stood at 2.96X, within management’s target range of 2.5-3.0X. Strong cash conversion supports continued capital returns while funding technology, sustainability and integration initiatives.
Risks to WM Stock
Elevated Debt Burden: Stericycle and ongoing investment have left WM with a substantial debt load. At the end of the second quarter of 2026, current and long-term debt totaled $23.36 billion against $557 million of cash. Leverage stood at 2.96X, within management’s 2.5-3.0X target range and is expected to decline in the second half. Still, the elevated debt burden could reduce financial flexibility if earnings or cash flow weaken while investment and acquisition activity remains high.
Bleak Liquidity: WM's high short-term debt against its cash reserves weakens its liquidity position. At the end of the second quarter of 2026, the company reported a current ratio of 0.91, sequentially dipping from 0.93. A current ratio below one often suggests that a company may not be well-positioned to meet its short-term obligations, which is a red flag for investors.
WM’s Zacks Rank & Stocks to Consider
WM has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks in the broader Business Services sector are Bright Horizons Family Solutions Inc. (BFAM - Free Report) and CBIZ, Inc. (CBZ - Free Report) .
Bright Horizons Family Solutions carries a Zacks Rank #2 (Buy) at present. It has a long-term earnings growth expectation of 13.9%.
BFAM delivered a trailing four-quarter earnings surprise of 7.6%, on average.
CBIZ also has a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 10%.
CBZ beat earnings estimates in three of the last four quarters and missed once, with an average earnings surprise of 8.9%.