GFL Environmental (GFL) AI Stock Analysis

• Market Cap: $26.89B
• Dividend Yield: 0.12%
• Average Volume (3M): 343.51K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.39
• Revenue Growth: 4.61%
• EPS Growth: -2848.30%
• Country: CA
• Employees: 20,000
• Sector: Industrials
• Sector Strength: 66
• Industry: Waste Management
• EPS (TTM): -1.90
• Shares Outstanding: 381,570,470
• 10 Day Avg. Volume: 363,329
• 30 Day Avg. Volume: 343,510
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.43
• Price to Cash Flow (P/CF): 10.90
• P/FCF Ratio: 11.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$77.38
• Price Target Upside: 13.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

GFL Environmental's overall score reflects strong revenue growth and strategic initiatives to improve financial stability by reducing debt and repurchasing shares. However, challenges with profitability, high leverage, and valuation concerns weigh on the score. Positive technical indicators and earnings call guidance support a moderately favorable outlook, but addressing financial risks is crucial for sustained performance.

Positive Factors

Debt Reduction and Share Buybacks

Management reiterated its intention to reduce debt by $3.75B and buy back up to $2.25B of shares following the Environmental Services transaction.

M&A Growth

Accelerating M&A growth and peer-leading margin improvement will force a re-rating of the company's valuation.

Operational Improvement

The focus on operational improvement reinforces growth momentum in the business.

Negative Factors

Ambitious Targets

GFL's 2028 targets are ambitious but achievable, making 2025 guidance look very conservative.

Financial Leverage

Proceeds from the partial sale of ES should reset financial leverage lower, provide substantial funds for share repurchases and support a re-acceleration of M&A activity.

Valuation Concerns

Valuation keeps analysts on the sidelines, suggesting that optimism is largely captured by the current valuation.

GFL Environmental Business Overview & Revenue Model

Company Description

GFL Environmental Inc. operates as a diversified environmental services company in Canada and the United States. The company offers non-hazardous solid waste management, infrastructure and soil remediation, and liquid waste management services. Its solid waste management business line includes the collection, transportation, transfer, recycling, and disposal of non-hazardous solid waste for municipal, residential, and commercial and industrial customers. The company's infrastructure and soil remediation business line provides remediation of contaminated soils, as well as complementary services, including civil, demolition, and excavation and shoring services. Its liquid waste management business collects, manages, transports, processes, and disposes of a range of industrial and commercial liquid wastes, as well as resells liquid waste products. The company was incorporated in 2007 and is headquartered in Vaughan, Canada.

How the Company Makes Money

GFL Environmental makes money through multiple revenue streams primarily derived from its comprehensive waste management services. The company generates revenue by collecting fees for waste collection and disposal services from residential, commercial, and industrial clients. A significant portion of its income comes from long-term contracts with municipalities and businesses for regular waste collection and management services. GFL also earns revenue from recycling operations by processing recyclable materials and selling them to manufacturers. Additionally, the company offers specialized services like soil remediation and infrastructure development, which contribute to its earnings. Strategic acquisitions and partnerships have helped GFL expand its market presence and enhance its service offerings, further driving revenue growth.

GFL Environmental Financial Statement Overview

Summary

GFL Environmental shows strong revenue growth and improving cash flow from operations. However, the company faces challenges with consistent profitability and high leverage, posing risks to financial stability. While there are positive trends in revenue and cash flow, addressing debt levels and achieving profitability are crucial for long-term success.

Income Statement

GFL Environmental has demonstrated consistent revenue growth, increasing from $3.35 billion in 2019 to $7.86 billion in 2024, reflecting a strong upward trajectory in top-line performance. However, despite revenue growth, the company has struggled with profitability, consistently reporting negative net income, with a notable loss of $722.7 million in 2024. Gross profit margins improved over time, but the inability to generate positive EBIT and net income margins remains a concern, impacting overall profitability.

Balance Sheet

The balance sheet reflects substantial leverage, with a debt-to-equity ratio of 1.51 in 2024, indicating significant reliance on debt financing. Stockholders' equity has improved over the years, reaching $6.98 billion in 2024, but high total debt levels at $10.55 billion present financial risk. The equity ratio of 32.9% suggests a moderate level of equity financing, but the high debt burden poses challenges to financial stability.

Cash Flow

Cash flow from operations has been strong, with significant growth to $1.54 billion in 2024. The free cash flow has turned positive in 2024 at $347.2 million, compared to a negative figure in 2023, indicating an improvement in cash management. The operating cash flow to net income ratio is high due to negative net income, highlighting efficient cash conversion despite profitability issues. However, the historical volatility in free cash flow underscores potential cash flow management risks.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.86B	7.52B	6.76B	5.53B	4.20B
	Gross Profit
1.49B	1.27B	797.60M	527.60M	190.10M
	EBIT
0.00	389.20M	87.90M	-64.30M	-320.30M
	EBITDA
1.20B	2.33B	1.63B	1.09B	303.80M
	Net Income Common Stockholders
-722.70M	45.40M	-183.20M	-606.80M	-994.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
133.80M	135.70M	82.10M	190.40M	27.20M
	Total Assets
21.21B	20.67B	19.77B	18.37B	15.73B
	Total Debt
10.55B	9.29B	9.65B	8.29B	7.74B
	Net Debt
10.42B	9.15B	9.56B	8.10B	7.72B
	Total Liabilities
13.99B	13.29B	13.72B	12.60B	10.05B
	Stockholders Equity
6.98B	7.18B	6.04B	5.78B	5.68B
Cash Flow		Free Cash Flow
347.20M	-74.70M	316.20M	250.70M	73.90M
	Operating Cash Flow
1.54B	980.40M	1.10B	897.90M	502.20M
	Investing Cash Flow
-1.68B	-310.40M	-1.73B	-2.69B	-4.35B
	Financing Cash Flow
163.20M	-602.80M	569.00M	1.96B	3.34B

GFL Environmental Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GFL, the sentiment is Positive. The current price of 68.36 is above the 20-day moving average (MA) of 67.66, above the 50-day MA of 65.25, and above the 200-day MA of 59.58, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 55.66 is Neutral, neither overbought nor oversold. The STOCH value of 70.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:GFL.

GFL Environmental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFL	68 Neutral	$26.89B	―	-10.23%	0.12%	4.61%	-2848.30%
Sector *	62 Neutral	$8.05B	13.61	3.91%	3.11%	3.81%	-13.91%
NFI	57 Neutral	C$1.40B	―	-0.38%	―	18.07%	98.61%

GFL Environmental Corporate Events

GFL Environmental Upsizes Secondary Offering and Announces Share Buyback

GFL Environmental Inc. announced an increase in the size of its secondary offering by selling shareholders, now totaling 18,887,723 subordinate voting shares priced at US$47.65 per share. The company has also agreed to purchase for cancellation 7,056,027 shares under this offering, which is being managed by RBC Capital Markets, LLC and RBC Dominion Securities Inc. This move is part of GFL’s strategic financial operations and may impact its market positioning by potentially reducing the number of shares available in the market.

GFL Environmental Inc. Announces Major Share Buyback Strategy

GFL Environmental Inc. announced the direct buyback of 17,050,298 subordinate voting shares from BC Partners and plans to repurchase up to 7,056,027 shares in a secondary offering. These transactions align with GFL’s strategy to utilize proceeds from the sale of its Environmental Services business to repurchase shares, aiming to strengthen its market position without negatively impacting share value. The company’s board approved these transactions, supported by a special committee, and received regulatory approval to proceed with share repurchases.

GFL Environmental Announces Secondary Share Offering by Major Shareholders

GFL Environmental Inc. announced a secondary offering of 15,739,769 subordinate voting shares by selling shareholders, including Ontario Teachers’ Pension Plan Board and other entities. The company will not receive proceeds from this sale, which will be managed by RBC Capital Markets and RBC Dominion Securities in the U.S. and Canada, respectively. This offering, detailed in the prospectus supplement, is part of a multi-jurisdictional disclosure system between Canada and the U.S., potentially impacting the company’s market presence and shareholder dynamics.

GFL Environmental Sells Environmental Services Business for $8 Billion

GFL Environmental Inc. has completed the sale of its Environmental Services business for $8 billion, retaining a $1.7 billion equity interest. The company plans to use up to $3.75 billion of the proceeds to repay debt, with $2.25 billion potentially allocated for share repurchases, subject to market conditions, and the remainder for transaction fees and general corporate purposes. This transaction is expected to significantly impact GFL’s financial strategy, potentially improving its debt position and shareholder value.

GFL Environmental Announces 2024 Earnings Release and 2025 Investor Day

GFL Environmental Inc. has scheduled its full year 2024 earnings release for February 24, 2025, with an investor conference call to follow the next day. Additionally, the company will host its 2025 Investor Day on February 27 at the New York Stock Exchange, where senior management will discuss key strategies and financial objectives, potentially impacting stakeholder perspectives on growth and sustainability efforts.