GFL Environmental (GFL) AI Stock Analysis

• Market Cap: $26.60B
• Dividend Yield: 0.12%
• Average Volume (3M): 350.43K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.48
• Revenue Growth: 4.61%
• EPS Growth: -2848.30%
• Country: CA
• Employees: 20,000
• Sector: Industrials
• Sector Strength: 64
• Industry: Waste Management
• EPS (TTM): -1.90
• Shares Outstanding: 381,570,470
• 10 Day Avg. Volume: 298,901
• 30 Day Avg. Volume: 350,432
• 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: $77.20
• Price Target Upside: 14.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

GFL Environmental's overall score is driven by strong revenue growth and strategic initiatives like share buybacks and debt reduction. However, challenges with profitability and high leverage, along with mixed technical indicators and valuation concerns, weigh on the score.

Positive Factors

EBITDA Growth

The outlook for double-digit Adjusted EBITDA growth over the intermediate term will resonate with some investors.

Growth Momentum

The presentations and discussions with management reinforced the growth momentum in the business, and its focus on operational improvement was encouraging.

M&A Activity

GFL expects to re-accelerate M&A activity, which provides an upside bias to estimates.

Negative Factors

Shareholder Concerns

GFL will address shareholder concerns by moving to ~3x net leverage and buying back ~40mm shares from a large investor.

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 primarily through its extensive service offerings in waste management and environmental solutions. The company's revenue model is built on collecting fees for waste collection, processing, recycling, and disposal services. Key revenue streams include subscription-based services for residential waste collection, contracts with commercial businesses for waste management solutions, and specialized services for hazardous and liquid waste handling. Additionally, the company benefits from partnerships with municipalities and industrial clients, which often involve long-term contracts that provide stable and recurring revenue. GFL's focus on sustainability and recycling initiatives also allows it to capitalize on the growing demand for environmentally responsible waste management solutions, further contributing to its earnings.

GFL Environmental Financial Statement Overview

Summary

GFL Environmental has shown strong revenue growth and improving cash flow from operations. However, persistent profitability challenges and high leverage pose risks to financial stability. The company's consistent revenue growth is noteworthy, but 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: 67.63
• 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 67.63 is above the 20-day moving average (MA) of 66.80, above the 50-day MA of 66.59, and above the 200-day MA of 60.81, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 53.03 is Neutral, neither overbought nor oversold. The STOCH value of 57.51 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
Sector *	63 Neutral	$4.26B	11.28	5.43%	215.24%	4.12%	-8.73%
GFL	59 Neutral	$26.60B	―	-10.23%	0.12%	4.61%	-2848.30%
NFI	56 Neutral	C$1.41B	―	-0.38%	―	18.07%	98.61%

GFL Environmental Corporate Events

GFL Environmental Resumes Share Repurchase Program

GFL Environmental Inc. has announced the resumption of its normal course issuer bid (NCIB) following approval from the Toronto Stock Exchange. The company plans to repurchase up to 28,046,256 subordinate voting shares over the next year, excluding shares previously repurchased from BC Partners and those acquired in a secondary offering. This move is part of GFL’s strategy to manage its capital structure and potentially enhance shareholder value, with purchases subject to market conditions and executed through various trading platforms.

Spark’s Take on TSE:GFL Stock

According to Spark, TipRanks’ AI Analyst, TSE:GFL is a Neutral.

GFL Environmental’s overall score is driven by strong revenue growth and strategic initiatives, such as share buybacks and debt reduction, which are positive for long-term stability. However, challenges with profitability and high leverage, along with technical indicators suggesting short-term pressure, weigh on the score.

To see Spark’s full report on TSE:GFL stock, click here.

GFL Environmental Boosts Quarterly Dividend by 10%

GFL Environmental Inc. announced a 10% increase in its quarterly cash dividend, raising it from US$0.014 to US$0.0154 per share. This decision reflects the company’s commitment to enhancing shareholder value and may positively impact its market positioning by demonstrating financial stability and growth potential.

GFL Environmental to Announce Q1 2025 Financial Results

GFL Environmental Inc. announced the release of its first quarter 2025 financial results scheduled for April 30, 2025, with an investor conference call to follow on May 1, 2025. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic positioning in the environmental services industry.

GFL Environmental Completes Strategic Share Transactions

GFL Environmental Inc. has completed a secondary offering of 18,887,723 subordinate voting shares by several selling shareholders. The company acquired 7,056,027 shares under this offering, alongside purchasing 17,050,298 shares from BC Partners and 7,618,758 shares under its normal course issuer bid, totaling 31,725,083 shares for cancellation. This strategic move allows GFL to optimize its share structure and retain the ability to purchase additional shares, potentially strengthening its market position.

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.