Is Waste Management Inc (WM) overvalued?
On Equity Rank's model estimate, WM trades 49% above its fair value. Waste Management Inc (WM) last closed at $236.26; the multi-method model fair value is $158.49.
| Price | Model fair value | Price vs model |
|---|---|---|
| $236.26 | $158.49 | 49% above |
What the answer rests on
- 1 of 10 valuation methods put WM's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, WM's free cash flow would need to grow about 6.2% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 13.1% a year.
- Over the past year the price sat below the model fair value on 8% of trading days. The gap ranged from 5% below to 66% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind WM's fair value · What prices assume · Other companies