## Waste Management Earnings Preview: What to Expect on October 28th
Waste Management (WM), the largest integrated provider of traditional solid waste services in the United States, is gearing up to release its quarterly earnings on Monday, October 28th. Investors are eagerly awaiting the announcement, hoping for positive news on both current performance and future prospects.
Analysts are expecting Waste Management to report an earnings per share (EPS) of $1.89. However, the market’s reaction will likely hinge not only on whether the company surpasses these estimates but also on the guidance provided for the next quarter. New investors should understand that while earnings performance is important, market reactions are often driven by how companies project their future financial performance.
### A Look Back: Historical Earnings Performance
In the previous earnings release, Waste Management missed EPS expectations by $0.01, leading to an 8.03% drop in the share price the following trading session. This highlights the importance of exceeding expectations and providing positive guidance for investor confidence. Here’s a look at Waste Management’s past performance and the resulting price change:
| Quarter | EPS Estimate | EPS Actual | Price Change % |
|—|—|—|—|
| Q2 2024 | 1.83 | 1.82 | -8.0% |
| Q1 2024 | 1.50 | 1.75 | 1.0% |
| Q4 2023 | 1.53 | 1.74 | 6.0% |
| Q3 2023 | 1.61 | 1.63 | 6.0% |
### Understanding Market Sentiments and Expectations
It’s crucial for investors to understand the prevailing market sentiment and expectations surrounding Waste Management. The consensus rating for the company is currently Neutral, based on 1 analyst rating. The average one-year price target is $220.0, implying a potential 5.31% upside. However, these figures should be considered within the broader context of the industry.
### Peer Ratings Overview: Comparing Waste Management to Its Rivals
To gain a better understanding of Waste Management’s position in the market, it’s helpful to compare its performance to its key competitors. Here’s a snapshot of analyst ratings and average 1-year price targets for Republic Services, Rollins, and Clean Harbors, three major players in the waste management industry:
| Company | Analyst Rating | Average 1-Year Price Target | Potential Upside/Downside |
|—|—|—|—|
| Republic Services | Neutral | $214.33 | 2.59% Upside |
| Rollins | Outperform | $55.0 | 73.67% Downside |
| Clean Harbors | Outperform | $265.57 | 27.12% Upside |
### Key Findings from the Peer Analysis Summary
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|—|—|—|—|—|
| Waste Management | Neutral | 5.53% | $2.11B | 9.35% |
| Republic Services | Neutral | 8.64% | $1.67B | 4.69% |
| Rollins | Outperform | 2.73% | $481.63M | 10.72% |
| Clean Harbors | Outperform | 11.08% | $517.18M | 5.61% |
This summary reveals that Waste Management ranks in the middle for revenue growth among its peers. It leads in gross profit margin, demonstrating strong cost management. Notably, the company also boasts a higher return on equity compared to its peers, indicating efficient use of equity capital and strong financial health.
### Waste Management: A Closer Look at the Company
Waste Management operates 263 active landfills and approximately 332 transfer stations across the United States. It serves a diverse range of end markets, including residential, commercial, and industrial sectors. The company is also a leading recycler in North America.
### Key Financial Indicators: Gauging Waste Management’s Financial Health
*
Market Capitalization:
Waste Management’s market capitalization is above the industry average, signaling a strong market presence and significant size. This suggests a robust company with a strong financial foundation.*
Revenue Trend:
Over the past three months, Waste Management has exhibited a positive revenue trend, achieving a noteworthy growth rate of 5.53% as of June 30, 2024. This indicates strong top-line earnings and a solid financial performance.*
Net Margin:
Waste Management’s net margin is impressive, surpassing industry averages. With a net margin of 12.59%, the company demonstrates strong profitability and effective cost management.*
Return on Equity (ROE):
Waste Management’s ROE is exceptional, exceeding industry averages. With a remarkable ROE of 9.35%, the company showcases efficient use of equity capital and strong financial health.*
Return on Assets (ROA):
Waste Management’s ROA also stands out, surpassing industry averages. With an impressive ROA of 2.04%, the company demonstrates effective utilization of assets and strong financial performance.*
Debt Management:
Waste Management’s debt-to-equity ratio stands significantly higher than the industry average, reaching 2.25. This indicates a greater reliance on borrowed funds, potentially raising concerns about financial leverage. Investors should pay close attention to this metric and how the company manages its debt in the coming quarters.Overall, Waste Management appears to be a financially strong company with a robust market presence. However, its high debt levels warrant monitoring. Investors should consider these factors alongside the company’s earnings release and guidance when making investment decisions.
