A month has gone by since the last earnings report for Waste Management (WM Quick QuoteWM - Free Report) . Shares have lost about 3.6% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Waste Management due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Waste Management Q4 Earnings Miss Estimates

Waste Management reported disappointing fourth-quarter 2022 results, wherein both earnings and revenues missed the respective Zacks Consensus Estimate.

Adjusted earnings per share (excluding 9 cents from non-recurring items) of $1.30 missed the Zacks Consensus Estimate by 6.5% but improved 3.2% year over year. Total revenues of $4.94 billion also missed the Zacks Consensus Estimate by 0.7% but increased 5.5% year over year.

Quarterly Numbers in Detail

The Collection segment recorded revenues of $3.39 billion, up 13% from the prior-year quarter’s figure. The Landfill segment’s top line grew 9.2% year over year to $1.2 billion. Total revenues in the Transfer segment were up 3% to $541 million.

The Recycling segment’s revenues dropped 24.7% to $360 million. Other businesses’ revenues totaled $620 million, up 8.6% year over year.

Adjusted operating EBITDA of $1.36 billion increased 8.8% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 27.5% from 26.7% in the prior-year quarter.

Adjusted operating income came in at $814 million, up 10.1% from the year-ago quarter’s level. Adjusted operating income margin surged to 16.5% from 15.8% in the year-ago quarter.

Waste Management exited fourth-quarter 2022 with cash and cash equivalents of $351 million compared with $137 million at the end of the prior quarter. Long-term debt (less current portion) was $14.6 billion compared with $13.8 billion at the end of the prior quarter.

WM generated $1.05 billion of cash from operating activities in the reported quarter, while capital expenditures were $623 million. Free cash flow was $196 million.

During the reported quarter, Waste Management returned $705 million to its shareholders, including $266 million through cash dividends and $439 million through share repurchases.

2023 Outlook

The company has unveiled its outlook for 2023.

Total revenue growth is expected to be between 4% and 5.5%, which includes organic revenue growth of nearly 5.5% from the collection and disposal business.

Adjusted operating EBITDA is expected in the range of $5.825-$5.975 billion.

Free cash flow is estimated to be between $2.6 billion and $2.7 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -7.09% due to these changes.

VGM Scores

At this time, Waste Management has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Waste Management has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.