Waste management services provider Waste Management (NYSE:WM) missed Wall Street’s revenue expectations in Q1 CY2026 as sales rose 3.5% year on year to $6.23 billion. Its non-GAAP profit of $1.81 per share was 4% above analysts’ consensus estimates.
Waste Management (WM) Q1 CY2026 Highlights:
- Revenue: $6.23 billion vs analyst estimates of $6.28 billion (3.5% year-on-year growth, 0.9% miss)
- Adjusted EPS: $1.81 vs analyst estimates of $1.74 (4% beat)
- Adjusted EBITDA: $1.85 billion vs analyst estimates of $1.87 billion (29.8% margin, 1% miss)
- Operating Margin: 17.9%, up from 16.8% in the same quarter last year
- Free Cash Flow Margin: 14.8%, up from 6.3% in the same quarter last year
- Market Capitalization: $91.14 billion
“Strong earnings and cash flow results in the quarter achieved our expectations, reflecting the strength of the WM team and the resilience of our business model,” said Jim Fish, WM’s CEO.
Company Overview
Headquartered in Houston, Waste Management (NYSE:WM) is a provider of comprehensive waste management services in North America.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Waste Management’s 10.3% annualized revenue growth over the last five years was solid. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Waste Management’s annualized revenue growth of 10.8% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.
This quarter, Waste Management’s revenue grew by 3.5% year on year to $6.23 billion, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5.8% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Operating Margin
Waste Management’s operating margin has generally stayed the same over the last 12 months, averaging 17.4% over the last five years. This profitability was elite for an industrials business thanks to its efficient cost structure and economies of scale. This is seen in its fast historical revenue growth and healthy gross margin, which is why we look at all three data points together.
Looking at the trend in its profitability, Waste Management’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q1, Waste Management generated an operating margin profit margin of 17.9%, up 1 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Waste Management’s EPS grew at 12.9% compounded annual growth rate over the last five years, higher than its 10.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of Waste Management’s earnings can give us a better understanding of its performance. A five-year view shows that Waste Management has repurchased its stock, shrinking its share count by 4.7%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Waste Management, its two-year annual EPS growth of 7.3% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.
In Q1, Waste Management reported adjusted EPS of $1.81, up from $1.67 in the same quarter last year. This print beat analysts’ estimates by 4%. Over the next 12 months, Wall Street expects Waste Management’s full-year EPS of $7.64 to grow 10.4%.
Key Takeaways from Waste Management’s Q1 Results
It was good to see Waste Management beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed and its adjusted operating income fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $227.50 immediately after reporting.
Big picture, is Waste Management a buy here and now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.