Waste Management Q4 Earnings Miss Expectations, Shares Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
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Source: seekingalpha
- Earnings Miss: Waste Management (WM) reported adjusted earnings of $1.93 per share for Q4, falling short of Wall Street's $1.95 estimate, resulting in a 2% drop in shares during after-hours trading.
- Revenue Shortfall: The company's revenue for the quarter was $6.31 billion, missing analysts' expectations of $6.39 billion, indicating signs of weak market demand.
- Operational Profit Increase: Despite the revenue miss, WM's operating income rose from $919 million a year earlier to $1.16 billion, with improved operating margins due to cost controls and efficiency initiatives.
- Cash Flow Growth: WM's net cash provided by operating activities increased by 12.1% to $6.04 billion in 2025, while free cash flow rose by 26.8% to $2.94 billion, reflecting progress in investments in renewable natural gas and recycling automation.
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Analyst Views on WM
Wall Street analysts forecast WM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for WM is 247.61 USD with a low forecast of 223.00 USD and a high forecast of 266.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
15 Buy
5 Hold
0 Sell
Strong Buy
Current: 231.600
Low
223.00
Averages
247.61
High
266.00
Current: 231.600
Low
223.00
Averages
247.61
High
266.00
About WM
Waste Management, Inc. is a provider of environmental solutions. The Company provides collection, recycling, and disposal services to millions of residential, commercial, industrial, and municipal customers throughout the United States and Canada. Its segments include East Tier, West Tier, Recycling Processing and Sales, WM Renewable Energy, and WM Healthcare Solutions. East Tier primarily consists of geographic areas located in the Eastern U.S., the Great Lakes region and all of Canada. The West Tier primarily includes geographic areas located in the Western U.S., including the upper Midwest region and British Columbia, Canada. Recycling Processing and Sales includes the processing and sales of materials collected from residential, commercial, and industrial customers. WM Renewable Energy develops, operates, and promotes projects for the beneficial use of landfill gas. WM Healthcare Solutions includes Regulated Waste and Compliance Services and Secure Information Destruction services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Waste Management, Inc. Reports Strong Q4 2025 Earnings with Record Cash Flow Growth
- Strong Financial Performance: In 2025, Waste Management reported over 12% growth in cash flow from operations to $6.04 billion and nearly 27% growth in free cash flow, reflecting robust core business performance and successful sustainability strategies.
- Renewable Energy Expansion: The company commissioned seven new renewable natural gas facilities, further solidifying its leadership in environmental sustainability, while projecting nearly 30% growth in free cash flow to $3.8 billion in 2026.
- Shareholder Return Plans: Management announced a 14.5% increase in the quarterly dividend for 2026 and authorized a $3 billion share repurchase program, indicating a strong commitment to shareholder value with an expected $3.5 billion in total returns.
- Operational Efficiency Improvements: The operating EBITDA margin rose to 30.1% in 2025, with operating costs dropping below 60% for the first time at 59.5%, driven by a younger fleet and improved employee retention, showcasing ongoing advancements in cost management and technological efficiency.
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Waste Management Q4 Results Fall Short of Expectations
- Earnings Performance: Waste Management reported earnings of $1.93 per share, slightly below the market expectation of $1.94, yet reflecting a 13.5% year-over-year increase, indicating sustained profitability.
- Revenue Figures: The company’s fourth-quarter revenue was $6.31 billion, falling short of analysts' expectations of $6.39 billion, but still representing over a 7% increase from last year's $5.89 billion, showcasing robust market performance.
- Future Outlook: Waste Management projects full-year 2026 revenue between $26.43 billion and $26.63 billion, slightly below the Street's estimate of $26.66 billion, indicating a cautious approach towards future growth.
- Analyst Ratings: Despite mixed ratings, Wells Fargo raised its target price from $238 to $246, while Scotiabank downgraded it to $250, reflecting differing market perspectives on Waste Management's future performance.
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