Abstract

Waste Management will release its quarterly results on October 21, 2025 Post Market; consensus points to higher revenue, stable margins, and moderate EPS growth, setting expectations for resilient core operations and disciplined capital allocation.

Market Forecast

For the current quarter, the market’s baseline points to total revenue of $6.39 billion, a gross profit margin near 40.51%, a net profit margin around 9.36%, and adjusted EPS of $1.94, with estimated year-over-year growth rates of 10.76% for revenue and 8.39% for EPS. The main business mix emphasizes Collection, Landfill, Medical Solutions, Transfer, Recycling Processing & Sales, and Renewable Energy, with management focus on pricing discipline and route density to underpin margins and cash generation. The most promising segment is Collection, projected to anchor the quarter’s revenue at $3.93 billion and benefit from pricing traction and contracted volume continuity.

Last Quarter Review

In the previous quarter, Waste Management reported revenue of $6.44 billion, a gross profit margin of 40.51%, GAAP net profit attributable to shareholders of $603.00 million with a net profit margin of 9.36%, and adjusted EPS of $1.98, reflecting a 14.87% year-over-year revenue increase and a 1.02% adjusted EPS year-over-year rise. One notable highlight was EBIT of $1.24 billion against consensus expectations, underscoring operating resilience amid cost normalizations. The Collection segment led core performance with $3.93 billion in revenue as steady commercial and residential collection supported consistent cash flows, while Landfill and Medical Solutions added diversified contributions.

Current Quarter Outlook (with major analytical insights)

Main Business: Collection and Integrated Solid Waste Services

Collection remains the backbone of Waste Management’s earnings profile, supported by contract structures that emphasize predictable pricing escalators and route density improvements. Momentum is likely to be driven by price increases on commercial and industrial routes, while residential volumes tend to be stable given municipal contracts. Cost efficiency in fleet operations and labor scheduling can provide incremental margin support as fuel and maintenance expenses normalize. Management’s historical emphasis on optimizing route productivity and leveraging technology in dispatching and container tracking suggests ongoing efficiency gains, which should support gross margin stability around the recently reported level.

The integration across Collection, Transfer, and Landfill enhances internalization rates, which are critical to margin preservation. When more collected waste is processed through owned transfer stations and landfills, the company captures additional economics at each step, reducing third-party fees and improving profitability. Given pricing initiatives and consistent contract renewals, Collection revenue of $3.93 billion sets the pace for overall top line, and operational internalization continues to be the strategic lever. With recycling commodity prices known to be volatile, the focus on core fee-based services helps mitigate revenue variability, providing a buffer to net margin outcomes near 9.36%.

From a demand standpoint, commercial activity is steady, with service start-ups in small and midsize business customers balancing potential churn. Industrial roll-off demand typically tracks regional project activity; therefore, seasonality may be modest, and management’s pricing discipline is expected to prioritize yield over volume in any softer pockets of demand. This approach historically aligns with resilient cash generation and supports adjusted EPS consistency around the forecasted $1.94.

Most Promising Business: Landfill and Ancillary Environmental Solutions

Landfill operations complement Collection by capturing processing and disposal economics, contributing roughly $0.99 billion in last quarter’s revenue. Tight capacity in certain markets can support pricing, while long-term permits and environmental compliance underpin stability. Ancillary solutions, including Medical Solutions at $0.63 billion and Transfer at $0.40 billion, diversify the revenue base. These services often carry defensible pricing given regulatory requirements and specialized handling, which can sustain margins even when volumes fluctuate.

Medical Solutions has presented a growing adjacency as healthcare waste handling benefits from heightened compliance and service standard needs, creating opportunities for recurring revenue. With contractual arrangements and specialized logistics, the segment’s contribution to total margin can improve as scale effects are realized. Transfer stations, with $0.40 billion in revenue last quarter, function as a logistical bridge, helping internalize waste streams and reduce external disposal costs. The combination of landfill pricing firming and medical waste service stickiness indicates a constructive setup for EBIT growth, aligning with the quarter’s estimated $1.23 billion EBIT.

Renewable Energy, while smaller at $0.12 billion last quarter, aligns with long-term landfill gas capture and energy sales. Although commodity swings can influence realized pricing, integration into broader sustainability frameworks can open incremental revenue avenues with modest capital intensity. Near-term, contribution remains limited; however, it supports ESG-linked strategy narratives that some institutional investors factor into longer-term valuation considerations.

Key Stock Price Drivers This Quarter

The stock’s near-term performance will be sensitive to the interplay of pricing yield versus volume trends in Collection, the internalization rate across Transfer and Landfill, and cost normalization in labor, maintenance, and fuel. If Collection yield remains firm and internalization improves, margin structure should hold close to the last quarter’s 40.51% gross margin and 9.36% net margin. Conversely, any outsized variability in recycling commodity prices could affect Recycling Processing & Sales, which posted $0.37 billion last quarter, though the company’s diversified mix typically limits top-line exposure to these swings.

Earnings quality factors include cash conversion and capital allocation timing. Investors will monitor whether adjusted EPS of $1.94 tracks with EBIT execution and revenue at $6.39 billion, alongside signals on contracted price escalators for the year-over-year period. Management commentary around route optimization technologies and workforce productivity gains could shape sentiment on sustainable margin enhancement. Guidance color on capital spending related to advanced recycling, automation in materials recovery facilities, or landfill gas projects may influence outlook multiples if framed as ROI-accretive.

Lastly, watch for seasonality and project timing within industrial roll-off. Any regional demand shift could move volumes, but pricing discipline typically offsets volume variability. If cost lever moderation persists, the pathway to mid-single-digit adjusted EPS growth appears achievable, consistent with the 8.39% YoY forecast embedded in current quarter estimates.

Analyst Opinions

Bullish views dominate recent institutional commentary. Goldman Sachs initiated coverage on Waste Management with a Buy rating and a $238.00 price target, citing durable pricing power, strong internalization economics, and constructive cash flow supported by disciplined capital returns. Wells Fargo also initiated Waste Management with a Buy rating and a $238.00 price target, highlighting consistent execution in core solid waste services and an attractive risk-reward given stable contract cash flows and selective growth investments. Robert W. Baird upgraded the stock, pointing to strong growth potential and valuation support as operational efficiency gains and mix improvements underpin margins. The ratio of bullish to bearish opinions is 3:0, and the prevailing consensus favors upside bias for the upcoming quarter and the near-term horizon.

These institutions emphasize steady revenue growth near the $6.39 billion estimate, resilient adjusted EPS performance around $1.94, and EBIT trajectory consistent with internalization and pricing discipline. The constructive stance hinges on predictable municipal and commercial contract dynamics, moderate cost tailwinds, and portfolio diversity across disposal, transfer, and medical waste solutions. Analysts expect the quarter to validate the company’s strategy through in-line to moderately positive outcomes on revenue and profitability, reinforcing investor confidence in earnings visibility and cash generation.