WASTE MANAGEMENT INCWM

Waste Management defied expectations for a mature, utility-like business when its $7.2 billion acquisition of Stericycle drove a 14.2% revenue surge to $25.2 billion in FY2025. By aggressively raising core collection prices to offset macroeconomic headwinds and seamlessly integrating higher-margin healthcare waste services, the company transformed a traditional asset-heavy disposal network into a highly efficient cash-flow engine.

The company expanded its top-line footprint steadily over a five-year stretch, as revenue grew from $17.93 billion in FY2021 to $25.2 billion in FY2025. Crucially, automation investments and pricing leverage consistently outpaced rising labor, fuel, and maintenance costs. By FY2025, operating expenses as a percentage of revenue shrank to 59.6%, which lifted total operating income to $4.3 billion. Even after absorbing higher interest expenses from the Stericycle debt financing, free cash flow spiked by $620 million year-over-year to hit $2.9 billion in FY2025. The market heavily rewarded this defensive pricing power and margin expansion. At the close of FY2025, investors valued the enterprise at an $88.5 billion market capitalization, with the stock trading at 32.8x earnings at a share price of $219.71.