What Is Waste Management, Inc.'s (NYSE:WM) Share Price Doing?
Let's talk about the popular Waste Management, Inc. (NYSE:WM). The company's shares saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Waste Management’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Waste Management
What's the opportunity in Waste Management?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.97% above my intrinsic value, which means if you buy Waste Management today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $124.53, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Waste Management has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Waste Management look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Waste Management's earnings over the next few years are expected to increase by 48%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in WM’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on WM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Waste Management you should know about.
If you are no longer interested in Waste Management, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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