Waste Management Skyrockets 3.07%—Can This Momentum Sustain?

Summary
• Waste Management (WM) surges 3.07% to $234.9, hitting a 52-week high of $240.39
• Q2 revenue jumps 19% to $6.43B, driven by Stericycle acquisition and margin expansion
• Full-year free cash flow guidance raised by $125M to $2.8–$2.9B
• Sector peers like Waste Connections (WCN) also rise 2.72%, signaling industry strength

Waste Management’s intraday rally reflects a confluence of strong earnings, strategic acquisitions, and operational efficiency. The stock’s 3.07% gain—its largest single-day move in a year—has pushed it closer to its 52-week high. With a 19% revenue surge and margin expansion outpacing expectations, investors are weighing whether this momentum can carry through the rest of 2025.

Earnings Surge and Stericycle Synergy Fuel Rally
Waste Management’s 3.07% surge stems from a Q2 revenue beat of $6.43 billion (19% YOY) and adjusted EPS of $1.92, exceeding analyst estimates. The Stericycle acquisition, which contributed $646 million in revenue and $110 million in EBITDA, was the catalyst. Operational efficiency—evidenced by a record 37.9% operating margin in the core business—and automation investments in recycling drove the outperformance. Management’s raised free cash flow guidance ($2.8–$2.9 billion) and 100% bonus depreciation tax benefits further justified the rally, signaling confidence in mid-cycle resilience.

Waste Management Sector Gains Momentum as WCN Leads
Waste Management’s rally aligns with broader sector strength. Peer Waste Connections (WCN) rose 2.72%, while the VanEck Environmental Services ETF (EVX) gained 0.85%. The sector is buoyed by regulatory tailwinds, including circular economy mandates and ESG-driven infrastructure spending. Waste Management’s integration of Stericycle into its Healthcare Solutions segment has positioned it as a leader in high-growth niches, contrasting with peers still grappling with volume declines in residential and industrial waste.

Options and ETFs to Capitalize on WM’s Bullish Momentum
• 200-day MA: 223.45 (below current price); RSI: 57.6 (neutral); MACD: -0.688 (bullish histogram)
• Bollinger Bands: Upper (230.65), Middle (227.00), Lower (223.35); 30D support/resistance: 225.75–226.01

WM’s short-term bullish trend and proximity to its 52-week high ($242.58) suggest a continuation play. Key levels to watch include the upper Bollinger Band at $230.65 and the 52-week high. The VanEck Environmental Services ETF (EVX) offers sector exposure with a 0.85% gain, while leveraged ETFs like CCSO (-2.24%) are less favorable. For options, two contracts stand out:

• WM20250815C230: Call option with strike $230, expiring 2025-08-15. IV: 20.16% (moderate), leverage ratio: 33.18%, delta: 0.690 (high sensitivity), theta: -0.3597 (strong time decay), gamma: 0.0335 (high price responsiveness), turnover: 552,357. This contract benefits from WM’s current rally and has a projected 5% upside payoff of $7.60 (max(ST - K) = $246.15 - $230 = $16.15).
• WM20250919C230: Call option with strike $230, expiring 2025-09-19. IV: 19.75% (moderate), leverage ratio: 23.23%, delta: 0.639 (high sensitivity), theta: -0.1400 (moderate time decay), gamma: 0.0211 (moderate responsiveness), turnover: 109,744. This longer-dated option offers a buffer for volatility while maintaining leverage. Projected 5% upside payoff: $7.10 (max(ST - K) = $246.15 - $230 = $16.15).

Aggressive bulls should consider WM20250815C230 into a breakout above $240.39. Conservative traders may use WM20250919C230 for a slower, more durable position.

Backtest Waste Management Stock Performance
The 3% intraday surge in the Western & Northern Light ETF (WM) has historically led to positive short-to-medium-term gains. The backtest data shows that 56.15% of days yield a return within the first three days after the surge, with an average return of 0.26% over that period. Over ten days, the win rate increases to 58.88%, with an average return of 0.68%. Furthermore, a 30-day analysis reveals a 62.37% win rate, indicating that WM tends to maintain upward momentum in the four weeks following an intraday surge of at least 3%. The maximum return observed was 3.61% over 59 days, suggesting that while returns are generally modest, there is potential for significant gains if the momentum continues.

Act Now: WM’s Rally Points to Sustained Momentum
Waste Management’s earnings surge and strategic integration of Stericycle suggest a durable bull case. The stock’s 3.07% gain and 52-week high proximity indicate strong demand, supported by a 20.16% IV and positive MACD. Sector peers like WCN (up 2.72%) reinforce thematic strength. Investors should target a $240.39 breakout for a potential $246.15 target, with the WM20250815C230 call option as the top leveraged play. Watch for follow-through volume and a 52-week high test to confirm the trend’s sustainability.