Waste Management stock (NYSE:WM) has recorded outsized gains recently, with shares rallying by over 30% in the past six months alone. The company posted strong Q4 results, including record revenues, operating margins, and adjusted EPS in FY2023. However, it seems that recent share price gains have been powered, to a large extent, by the underlying valuation expansion the stock has undergone. The current above-average valuation could signal downside potential. Thus, I am neutral on the stock.
Unpacking WM’s Q4 Results — Record Financials Across the Board
Waste Management’s share price rally is not entirely unjustified. The company’s underlying financials were very strong in its Q4 results, celebrating new revenue, margin, and net income records. Let’s take a look at each metric.
Revenues: Strong Pricing Power Drives Top-Line Growth
Quarterly revenues reached an all-time high of $5.2 billion, up 5.7%…
