Waste management services provider Waste Management (NYSE: WM) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 7.1% year on year to $6.31 billion. On the other hand, the company’s outlook for the full year was close to analysts’ estimates with revenue guided to $26.53 billion at the midpoint. Its non-GAAP profit of $1.93 per share was 0.9% below analysts’ consensus estimates.

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“2025 was a year of disciplined execution for WM,” 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 can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Waste Management’s sales grew at an impressive 10.6% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade 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 11.1% 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 7.1% year on year to $6.31 billion, missing Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming 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

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Waste Management’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, 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. We like to see margin expansion, but Waste Management’s performance still shows it’s one of the better Waste Management companies as most peers saw their margins plummet.

This quarter, Waste Management generated an operating margin profit margin of 18.3%, up 2.7 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Waste Management’s EPS grew at a remarkable 13.2% compounded annual growth rate over the last five years, higher than its 10.6% 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 4.8%. 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 10.1% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q4, Waste Management reported adjusted EPS of $1.93, up from $1.70 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Waste Management’s full-year EPS of $7.50 to grow 10.7%.

Key Takeaways from Waste Management’s Q4 Results

It was good to see Waste Management provide full-year EBITDA guidance that slightly beat analysts’ expectations. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed and its EPS fell a bit short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 2% to $224.75 immediately following the results.

Is Waste Management an attractive investment opportunity at the current price? 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).