Over the past six months, Waste Management has been a great trade. While the S&P 500 was flat, the stock price has climbed by 9.1% to $234.12 per share. This run-up might have investors contemplating their next move.

Is there a buying opportunity in Waste Management, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.

Why Is Waste Management Not Exciting?

Despite the momentum, we don't have much confidence in Waste Management. Here are two reasons why you should be careful with WM and a stock we'd rather own.

1. Lackluster Revenue Growth

We at StockStory place the most emphasis on long-term growth, but within industrials, a stretched historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Waste Management’s annualized revenue growth of 7.2% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

2. Free Cash Flow Margin Dropping

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Waste Management’s margin dropped by 6 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Waste Management’s free cash flow margin for the trailing 12 months was 9.1%.

Final Judgment

Waste Management isn’t a terrible business, but it doesn’t pass our quality test. With its shares topping the market in recent months, the stock trades at 30.3× forward P/E (or $234.12 per share). This multiple tells us a lot of good news is priced in - we think there are better opportunities elsewhere. Let us point you toward one of our top digital advertising picks.

Stocks We Like More Than Waste Management

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.