Core Insights - The North American waste and recycling industry generates approximately $75 billion annually, with Waste Management capturing the largest market share [1] - Waste Management, established in 1968, is the largest environmental services firm in the US, with a market cap of $87.5 billion and a diverse range of services [2] - Environmental Services stocks have transitioned from low-growth to high-quality compounders, with a 13% EPS CAGR over the last decade [4] Waste Management Company Overview - Waste Management derives about 80% of its business from private industry contracts and 20% from the public sector [1] - Collection services account for 55% of Waste Management's revenue, with transfer services at 21%, landfill at 10%, and recycling at 5% [6] - The company reported Q3 2025 revenue of $6.44 billion, a 14% year-over-year increase, but missed forecasts by $60 million [7] Financial Performance - Waste Management's non-GAAP EPS for Q3 2025 was $1.98, up 2 cents year-over-year but also below expectations by 3 cents [7] - The company generated a free cash flow of $2.11 billion for the first nine months of 2025, reflecting a 13.5% increase [7] - Following the earnings miss, Waste Management's stock fell nearly 8% but has since recovered [8] Analyst Insights - Goldman Sachs analyst Adam Bubes forecasts a 7.7% EBITDA CAGR for Waste Management from 2025 to 2027, driven by strong price/cost spreads and investments in recycling and landfill gas [9] - Bubes maintains a Buy rating with a price target of $256, indicating an 18% upside potential [9] - The consensus rating for Waste Management is Moderate Buy, with 15 Buys and 7 Holds, and an average target price of $246.70, suggesting a 13.5% upside [10] Republic Services Overview - Republic Services is the second-largest waste management company in the US, valued at $67 billion, with a top-line revenue of $16.5 billion for the four quarters ending Q3 2025 [10][11] - The company offers a full range of environmental solutions and maintains a network of over 1,000 locations and a fleet of 17,000 vehicles [12][11] Financial Performance of Republic Services - Republic Services reported Q3 2025 revenue of $4.2 billion, a 3.4% year-over-year increase, but missed forecasts by $38.5 million [13] - The non-GAAP EPS was $1.90, up 9 cents year-over-year and exceeding expectations by 12 cents [13] - The company generated a cash flow from operations of $3.32 billion year-to-date, with adjusted free cash flow of $2.19 billion [13] Analyst Insights on Republic Services - Analyst Bubes highlights Republic's strong portfolio quality and operational execution, forecasting a 5.5% EBITDA CAGR from 2025 to 2027 [14] - Bubes assigns a Buy rating with a price target of $255, implying a 17% upside potential [14] - The consensus rating for Republic Services is Moderate Buy, with 11 Buys and 8 Holds, and an average target price of $245.76, suggesting a 13% gain [15]

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