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GFL Environmental (TSE:GFL)
TSX:GFL

GFL Environmental (GFL) AI Stock Analysis

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GFL Environmental

(TSX:GFL)

74Outperform
GFL Environmental scores well due to its strong financial growth, strategic debt reduction, and positive earnings call outlook. While technical indicators show positive momentum, caution is advised due to potential overbought conditions. The company's valuation is attractive, supported by a low P/E ratio and increased dividends.
Positive Factors
Guidance and Forecasts
GFL reaffirmed 2025 guidance and suggested that there are multiple avenues to exceed it before considering the accelerating M&A.
Mergers and Acquisitions
Accelerating M&A growth and peer-leading margin improvement will force a re-rating of the company's valuation.
Operational Improvement
The presentations and discussions with management reinforced the growth momentum in the business, and its focus on operational improvement was encouraging.
Negative Factors
Ambitious Targets
GFL's 2028 targets are ambitious but achievable and make 2025 guidance look very conservative, likely enabling a head-start on '28 execution.
Valuation Concerns
Valuation keeps analysts on the sidelines, suggesting that optimism is largely captured by the current valuation.

GFL Environmental (GFL) vs. S&P 500 (SPY)

GFL Environmental Business Overview & Revenue Model

Company DescriptionGFL 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 MoneyGFL 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 shows strong revenue growth and robust EBITDA margins, despite challenges in EBIT margins. The balance sheet is healthy with a reasonable debt-to-equity ratio, although the high ROE is due to one-time gains. Cash flows are solid but volatile, highlighting a need for stability in cash flow management.
Income Statement
70
Positive
GFL Environmental has shown a consistent increase in revenue over the years, indicative of solid growth in the waste management industry. The TTM (Trailing-Twelve-Months) gross profit margin stands at approximately 19.37%, with a net profit margin significantly impacted by a large net income figure due to unusual or non-operational gains. However, the EBIT margin is negative in the TTM, indicating operational challenges. EBITDA margin remains robust at 14.99%, reflecting strong operational cash generation capabilities.
Balance Sheet
65
Positive
The company's balance sheet shows a moderate debt-to-equity ratio of 0.93x in the TTM, which implies a balanced approach to leveraging. The equity ratio is approximately 41.34%, showcasing a healthy proportion of equity financing. However, the return on equity is substantially high at 35.53% due to the large net income figure, suggesting potential one-time gains rather than sustainable operational performance.
Cash Flow
60
Neutral
Cash flow analysis reveals a positive operating cash flow to net income ratio in the TTM, indicating strong cash conversion from earnings. The free cash flow to net income ratio is also positive, suggesting efficient capital expenditure management. However, the free cash flow growth rate has been volatile, which could pose risks to long-term cash flow stability.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.86B7.52B6.76B5.53B4.20B
Gross Profit
1.49B1.27B797.60M527.60M190.10M
EBIT
415.00M389.20M87.90M-64.30M-320.30M
EBITDA
1.22B2.33B1.63B1.09B303.80M
Net Income Common Stockholders
-722.70M45.40M-183.20M-606.80M-994.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
133.80M135.70M82.10M190.40M27.20M
Total Assets
21.21B20.67B19.77B18.37B15.73B
Total Debt
10.55B9.29B9.65B8.29B7.74B
Net Debt
10.42B9.15B9.56B8.10B7.72B
Total Liabilities
13.99B13.29B13.72B12.60B10.05B
Stockholders Equity
6.98B7.18B6.04B5.78B5.68B
Cash FlowFree Cash Flow
347.20M-74.70M316.20M250.70M73.90M
Operating Cash Flow
1.54B980.40M1.10B897.90M502.20M
Investing Cash Flow
-1.68B-310.40M-1.73B-2.69B-4.35B
Financing Cash Flow
163.20M-602.80M569.00M1.96B3.34B

GFL Environmental Technical Analysis

Technical Analysis Sentiment
Positive
Last Price69.61
Price Trends
50DMA
66.87
Positive
100DMA
65.28
Positive
200DMA
61.22
Positive
Market Momentum
MACD
0.45
Negative
RSI
56.73
Neutral
STOCH
92.77
Negative
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 69.61 is above the 20-day moving average (MA) of 66.63, above the 50-day MA of 66.87, and above the 200-day MA of 61.22, indicating a bullish trend. The MACD of 0.45 indicates Negative momentum. The RSI at 56.73 is Neutral, neither overbought nor oversold. The STOCH value of 92.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:GFL.

GFL Environmental Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSGFL
74
Outperform
$27.38B9.57-10.02%0.11%1.37%10833.53%
64
Neutral
$4.28B11.805.30%250.74%4.12%-9.02%
TSNFI
56
Neutral
C$1.49B-0.38%18.07%98.61%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:GFL
GFL Environmental
69.61
24.78
55.28%
BLDP
Ballard Power Systems
1.25
-1.58
-55.83%
CNI
Canadian National Railway
101.34
-22.11
-17.91%
RBA
RB Global
102.51
32.62
46.67%
WCN
Waste Connections
197.80
32.31
19.52%
TSE:NFI
NFI Group Inc
12.50
-0.81
-6.09%

GFL Environmental Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 1.19%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong positive performance with record revenue growth and margin expansion, successful debt reduction, and a robust M&A pipeline. Despite some challenges from weather impacts and commodity price volatility, the company remains confident in its strategic initiatives and future performance.
Q1-2025 Updates
Positive Updates
Record Growth in Revenue and EBITDA Margin
GFL reported a revenue growth of approximately 12.5% and adjusted EBITDA margin expansion of 120 basis points, marking the highest first quarter adjusted EBITDA margin in the company's history.
Positive Impact from Pricing Strategies
First quarter pricing of 5.7% exceeded expectations, contributing to margin improvements. The company is confident in achieving the pricing levels included in its 2025 guidance.
Successful Debt Reduction and Share Buybacks
GFL used $6 billion from the sale of its ES business to repay $3.5 billion in debt and repurchased $2.5 billion of outstanding shares, resulting in a record low net leverage ratio of 3.1x.
Strong M&A Pipeline
Year-to-date, GFL completed $240 million in M&A, acquiring annualized revenue of over $85 million. The company expects to meet or exceed its high-end estimates for M&A activity in 2025.
Improved Labor Turnover and Asset Utilization
Labor turnover rates improved by over 200 basis points compared to Q1 2024 and nearly 800 basis points compared to Q1 2023. The company also reported strong asset utilization contributing to margin performance.
Credit Rating Upgrades
Post-ES transaction, GFL's credit ratings were upgraded by both S&P and Moody's, reflecting the company's improved financial position.
Negative Updates
Weather-Related Volume Impacts
Significant weather impacts affected roll-off and special waste volumes in the first quarter, although positive volume trends were noted towards the end of the quarter.
Commodity Price Volatility
Decreases in energy prices reduced first quarter revenues from fuel surcharges, and the reduction in OCC and fiber pricing was only partially offset by an increase in non-fiber commodities.
Impact of Macroeconomic Uncertainty
There is potential concern about tariffs and macroeconomic uncertainty impacting CapEx and cost structure, although no direct material impacts have been observed yet.
Company Guidance
In the GFL First Quarter 2025 Earnings Call, the company reported a strong start to the fiscal year, exceeding its guidance with a 12.5% revenue growth and an adjusted EBITDA margin expansion of 120 basis points, marking the highest first-quarter adjusted EBITDA margin in its history. The company noted that its pricing strategies led to a 5.7% price increase, surpassing initial plans and contributing to a positive price-cost spread. Net leverage was reduced to 3.1x, the lowest in the company's history, following the sale of the ES business, which generated $6 billion in proceeds used to repay $3.5 billion of debt and repurchase $2.5 billion of shares. GFL's M&A pipeline remains robust, with $240 million spent on three deals year-to-date, and it anticipates exceeding the high end of its $700 million to $900 million M&A deployment estimates for the year. The company expects continued margin improvement driven by disciplined volume management and asset utilization optimization.

GFL Environmental Corporate Events

Stock BuybackBusiness Operations and Strategy
GFL Environmental Resumes Share Repurchase Program
Positive
Apr 24, 2025

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.

Dividends
GFL Environmental Boosts Quarterly Dividend by 10%
Positive
Apr 3, 2025

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.

Financial Disclosures
GFL Environmental to Announce Q1 2025 Financial Results
Neutral
Apr 1, 2025

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.

Stock BuybackBusiness Operations and Strategy
GFL Environmental Completes Strategic Share Transactions
Positive
Mar 31, 2025

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.

Stock BuybackBusiness Operations and Strategy
GFL Environmental Upsizes Secondary Offering and Announces Share Buyback
Neutral
Mar 26, 2025

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.

Stock BuybackBusiness Operations and Strategy
GFL Environmental Inc. Announces Major Share Buyback Strategy
Positive
Mar 26, 2025

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.

Private Placements and FinancingRegulatory Filings and Compliance
GFL Environmental Announces Secondary Share Offering by Major Shareholders
Neutral
Mar 26, 2025

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.

M&A TransactionsStock BuybackBusiness Operations and Strategy
GFL Environmental Sells Environmental Services Business for $8 Billion
Positive
Mar 3, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.