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Why the Market Dipped But Waste Management (WM) Gained Today

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Waste Management (WM - Free Report) closed at $229.61 in the latest trading session, marking a +0.4% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.59%. On the other hand, the Dow registered a loss of 0.45%, and the technology-centric Nasdaq decreased by 2.78%.

The garbage and recycling hauler's stock has climbed by 9.13% in the past month, exceeding the Business Services sector's gain of 2.76% and the S&P 500's loss of 2.23%.

Market participants will be closely following the financial results of Waste Management in its upcoming release. It is anticipated that the company will report an EPS of $1.69, marking a 3.43% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $6.14 billion, indicating a 19.03% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $7.68 per share and a revenue of $25.63 billion, representing changes of +6.22% and +16.16%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Waste Management. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 4.38% lower. Waste Management is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Waste Management's current valuation metrics, including its Forward P/E ratio of 29.79. For comparison, its industry has an average Forward P/E of 26.31, which means Waste Management is trading at a premium to the group.

It's also important to note that WM currently trades at a PEG ratio of 2.72. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Waste Removal Services stocks are, on average, holding a PEG ratio of 2.72 based on yesterday's closing prices.

The Waste Removal Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 139, this industry ranks in the bottom 45% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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