At today's price, WM's stock is pricing in about 14.3% annual free-cash-flow growth for the next ten years. Measured over five years, WM's actual FCF grew just 3.5% a year — but measured over the most recent three years, it grew 24.3% a year, faster than the market's ask.
At its current price, WM implies ~14.3% annual FCF growth for the next 10 years, discounted at 9%.
WM's actual 5-year FCF growth was just 3.8% a year — but the more recent 3-year pace was 24.3%.
Required growth vs. historical growth
Required growth from the reverse DCF below. Historical CAGRs computed directly from 10-K FY2021–FY2025 income and cash flow statements. The unusually high 3-year FCF figure reflects how depressed 2023's base year was — treat it as a base-effect result, not a clean trend line.
Sensitivity: what if the discount rate moves?
| WACC | Required growth |
|---|---|
| 7% | 9.0% |
| 8% | 11.8% |
| 9% (base case) | 14.3% |
| 10% | 16.7% |
| 11% | 18.8% |
| 12% | 20.8% |
WM is treated as a large, stable S&P 500 company for the 9% base-case discount rate.
What would move this number
- Using trailing-twelve-month FCF ($3,411M, Q2 2025-Q1 2026) instead of FY2025's standalone figure would lower the required growth rate to 12.4% at a 9% discount rate — but that TTM figure runs 43% above the 3-year average, past this analysis's ±40% normalization threshold, so it's shown here only as a reference point, not used as the base case.
- Moving the discount rate from 7% to 12% swings the required growth rate from 9.0% all the way to 20.8% — the single biggest lever in this whole analysis.
- Expanding net debt to include landfill closure/post-closure reserves and operating lease liabilities (beyond just total debt minus cash) would raise enterprise value and push the required growth rate higher than shown here.
Show your work
Inputs, sources, model assumptions, and the calculation
- Share price$224.06 — Aug 21, 2026 close, Google Finance/stockanalysis.com
- Diluted shares outstanding404.4M — 10-Q Q1 FY2026 (filed Apr 29, 2026), weighted-average diluted shares
- Market cap$90.61B — price × diluted shares (calculated)
- Net debt$22,733M — 10-Q Q1 FY2026 balance sheet (Mar 31, 2026): $641M current + $22,250M long-term debt, minus $158M cash
- Base FCF (FY2025)$2,937M — 10-K FY2025, p.63; operating cash flow $6,043M minus total capex $3,227M plus $121M in disposal proceeds
- 3-year average FCF (2023-2025)$2,385M
- Discount rate (WACC)9% base case (7-12% tested)
- Terminal growth rate2.5% — long-run GDP-level assumption
Normalization check: FY2025 FCF ($2,937M) is +23.1% above the three-year average ($2,385M) — within the ±40% threshold, so used as-is without adjustment.
Model: free cash flow is assumed to grow at a constant annual rate g for 10 years, then at a 2.5% terminal rate thereafter, solved by bisection for the value of g that equates present value to today's enterprise value (market cap $90.61B + net debt $22,733M = $113,343M).
Historical CAGR check: 5-yr FCF CAGR = (2,937÷2,530)^(1/4)−1 = 3.8%. 3-yr FCF CAGR = (2,937÷1,902)^(1/2)−1 = 24.3%. 5-yr revenue CAGR = (25,204÷17,931)^(1/4)−1 = 8.9%.
The fine print
- This isn't a fair-value price target — it only shows what the current price already assumes.
- Change the discount rate, the FCF base period, or the definition of net debt, and the answer moves substantially — see the sensitivity table and "what would move it" section above.
- A reverse DCF shows what the market currently expects — it does not say what the stock is "worth."
- Whether 14.3% growth is realistic depends on the Stericycle integration playing out as planned (per the $300M synergy target flagged in Q4 2025) and Healthcare Solutions actually turning profitable — not on this math alone.
- Any investment decision, and its outcome, is your own responsibility.
Frequently asked questions
What growth rate does WM's stock price assume?
At today's price, WM's stock is pricing in about 14.3% annual free-cash-flow growth for the next ten years, at a 9% discount rate.
How does that compare to WM's actual growth?
It depends on the window: WM's 5-year FCF CAGR was just 3.8%, well below the market's ask — but the more recent 3-year FCF CAGR was 24.3%, actually above it. FCF dipped sharply in 2023 before rebounding, so the comparison period matters a lot here.
What share price was used for this analysis?
This analysis used $224.06, as of the Aug 21, 2026 close.