Waste Connections, Inc. (WCN): A Bull Case Theory

We came across a bullish thesis on Waste Connections, Inc. on Monopolistic Investor’s Substack by Antoni Nabzdyk. In this article, we will summarize the bulls’ thesis on WCN. Waste Connections, Inc.'s share was trading at $167.23 as of January 29th. WCN’s trailing and forward P/E were 70.57 and 21.41 respectively according to Yahoo Finance.

Waste Connections, Inc. (WCN) operates in the competitive waste collection industry, focusing on underserved rural regions where its pricing power and service quality create a defensible niche, similar to Dino Polska’s rural expansion strategy. Beyond traditional waste collection, WCN diversifies revenue through the treatment of non-hazardous by-products from oil and gas operations and the production of methane gas from landfills, which is converted into electricity and sold to utilities. The company’s revenues are primarily driven by Commercial, Residential, and Industrial/Roll-off segments, while geographic reporting limits visibility into segment-level profitability.

Nonetheless, adjusted EBITDA trends indicate strong operational leverage, with the Canada segment leading margin expansion at 4.5 percentage points and revenue growth of 26.6%, highlighting the benefits of local management and decentralized operations. WCN operates 77 MSW landfills, 20 E&P waste landfills, and 16 non-MSW landfills, creating significant barriers to entry through regulation, geographic footprint, and network effects, which reinforce its Nabzdyk Ratings Moat Score of 7.2/10. While net margins remain modest at 11%, cost growth lags revenue growth, indicating improving efficiency, and seasonality impacts are minimal outside winter months.

The company’s financial position shows $20.78 billion in total assets against $8.96 billion in debt, though a negative net cash position poses some short-term challenges. Customer sentiment is mixed, reflecting high expectations in a concentrated industry. WCN’s median five-year revenue growth of 11.23% underpins a DCF-based fair value of $213.25 per share, implying 23.1% upside. With resilient contracts, operational leverage, and strategic rural positioning, WCN presents a compelling growth-oriented investment, balancing modest margins with durable competitive advantages and upside potential.

Previously, we covered a bullish thesis on Waste Management, Inc. (WM) by Francesco Ferrari in April 2025, which highlighted the company’s long-term growth, low volatility, strong ROIC, and solid margins. The stock has depreciated by approximately 3.36% since our coverage due to market pressures. The thesis still stands as WM benefits from scale and efficiency. Antoni Nabzdyk shares a similar view but emphasizes Waste Connections’ rural focus, operational leverage, and moat from landfill ownership.

Waste Connections, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held WCN at the end of the third quarter, which was 43 in the previous quarter. While we acknowledge the potential of WCN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.