Waste Management, Inc. (WM) DCF Valuation
TGM's two-stage DCF values Waste Management, Inc. (WM) between $43.67 and $139.11 depending on assumptions, with a base case of $80.40. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$225.53 is justified only if free cash flow grows about +26.6% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 5.8%/yr | 8.5% | $43.67 |
| Base case | 8.8%/yr | 7.5% | $80.40 |
| Optimistic | 11.8%/yr | 6.5% | $139.11 |
| Analyst DCF (FMP) | independent reference — different model | $351.20 | |
Current Price
$225.53
Market-Implied Growth
+26.6%/yr
vs +7.3% 5Y actual
Model Scenario Range
$43.67 – $139.11
model output — not a price target
WM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for WM (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.1B · 0.40B shares · net debt $22.7B
Estimated Fair Value
$116.38
-48.4% vs $225.53
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 8.8%/yr FCF growth and 10-year horizon fixed. Green = above today's $225.53; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $181 | $207 | $242 | $291 | $364 |
| 6.5% | $130 | $145 | $163 | $187 | $220 |
| 7.5% | $95.71 | $105 | $116 | $130 | $147 |
| 8.5% | $71.63 | $77.90 | $85.22 | $93.86 | $104 |
| 9.5% | $53.71 | $58.08 | $63.09 | $68.86 | $75.59 |
About Waste Management, Inc.
Waste Management, Inc. (WM) functions as a premier provider of environmental waste solutions across North America, serving a diverse client base that includes residential, commercial, industrial, and municipal customers. The company's core operations involve comprehensive collection services, which include gathering and transporting both waste materials and recyclables from their initial point of generation to designated transfer stations, material recovery facilities (MRFs), or final disposal sites. Waste Management maintains an extensive network of facilities, owning, developing, and operating landfill gas-to-energy plants within the United States, in addition to managing numerous transfer stations. As of December 31, 2021, its substantial infrastructure consisted of 255 solid waste landfills, 5 secure hazardous waste landfills, 96 material recovery facilities, and 340 transfer stations. Beyond primary collection and disposal, WM offers services in materials processing and commodities recycling. This extends to recycling brokerage, where they handle the marketing of recyclable goods for third-party entities, alongside providing various other strategic business solutions. Its service portfolio also encompasses construction and remediation projects, the responsible management of fly ash and other residues generated from coal and fuel combustion, and specialized in-plant services offering full-spectrum waste management consulting. Furthermore, the company delivers tailored disposal solutions for oil and gas exploration and production activities. Originally incorporated in 1987 as USA Waste Services, Inc., the company rebranded to Waste Management, Inc. in 1998. Its corporate headquarters are situated in Houston, Texas.
- Sector
- Industrials
- Industry
- Waste Management
- CEO
- James C. Fish Jr.