Waste Connections Inc. Common Shares (WCN)

FairStock Score: 37/100 — MIXED

Key Financials

Strengths

• Generates $1.2 billion in annual free cash flow (2.7% yield on market cap)
• Solid return on equity of 13.4% above cost of capital
• Established organization with 24,214 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($54) with negative 210% margin of safety—limited downside protection

AI Analysis

Waste Connections Inc. Common Shares is a mid-cap industrials company valued at $42.8 billion. The business generates $9.5 billion in annual revenue with a 2.3% net margin and $1.2 billion in free cash flow. From a quality standpoint, Waste shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 2.5 in the grey zone. On valuation, the stock is commanding a steep 41.2x multiple, with trades far above its Graham Number ($54) with no margin of safety. Growth dynamics show revenue growing at 6.4% and profit growth of -9.2%. Our composite FairStock Score of 35/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $1.2 billion in annual free cash flow (2.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 41x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer