Waste Management’s Q3 results were met with a negative market reaction despite revenue coming in above Wall Street expectations. Management attributed the quarter’s resilience to disciplined pricing in its core collection and disposal business, as well as cost reductions supported by technology and process improvements. The company saw meaningful growth from its healthcare and sustainability segments, with CEO James Fish Jr. highlighting that healthcare operating EBITDA rose 33%. However, higher risk management costs and persistent volume softness in certain segments, particularly residential and commercial, weighed on overall profitability.
Is now the time to buy WM? Find out in our full research report (it’s free for active Edge members).
Waste Management (WM) Q3 2026 highlights:
- Revenue $6.85 billion vs S&P analysts’ estimates of $6.81 billion (6.3% year-on-year growth, 0.5% beat)
- Adjusted EPS $2.15 vs S&P analysts’ expectations of $2.18 (1.4% miss)
- Adjusted EBITDA $2.12 billion vs analyst estimates of $2.16 billion (31% margin, 1.9% miss)
- Revenue guidance The company reconfirmed its revenue guidance for the full year of $26.38 billion at the midpoint
- EBITDA guidance $8.2 billion at the midpoint for the full year, in line with analyst expectations
- Operating margin 18.7%, up from 15.3% in the same quarter last year
- Market capitalization $90 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Waste Management’s Q3 earnings call
- Tyler Brown (Raymond James) asked about Q4 margin expectations and whether elevated risk costs would persist. CFO David Reed explained margins should improve sequentially, with risk costs not expected to become a long-term trend.
- Toni Kaplan (Morgan Stanley) questioned the sustainability of volume declines in residential and technology’s impact on operating efficiency. COO Tara Hemmer outlined ongoing tech investments and noted sequential improvement in residential trends, but stopped short of predicting a full recovery.
- Faiza Alwy (Deutsche Bank) asked about rising free cash flow and drivers behind exceeding prior expectations. Reed pointed to lower capital spending, favorable working capital, and improved vendor management as contributing factors.
- Konark Gupta (Scotia Capital) pressed on M&A appetite and willingness to pursue larger deals amidst a robust pipeline.
- Stephanie Benjamin Moore (Jefferies) inquired about rising internalization rates and labor productivity gains from automation. Hemmer cited increased routing efficiencies and technology-driven labor reductions, including remote equipment pilots, as levers for structural cost improvement.
Catalysts in upcoming quarters
As we look to the next few quarters, our analyst team will be watching (1) the pace of margin expansion driven by technology and healthcare integration, (2) progress on renewable energy and recycling projects as they contribute to earnings diversity, and (3) signs of stabilization or recovery in residential and commercial volumes. Execution on M&A and the company’s ability to pass through regulatory and fuel cost pressures will also be key indicators of management’s effectiveness.
Waste Management currently trades at $227.39, down from $236.60 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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