GFL Environmental (GFL) AI Stock Analysis

• Market Cap: $24.74B
• Dividend Yield: 0.12%
• Average Volume (3M): 338.92K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.48
• Revenue Growth: 1.37%
• EPS Growth: -9742.41%
• Country: CA
• Employees: 15,000
• Sector: Industrials
• Sector Strength: 92
• Industry: Waste Management
• EPS (TTM): -0.09
• Shares Outstanding: 354,894,230
• 10 Day Avg. Volume: 505,809
• 30 Day Avg. Volume: 338,916
• PEG Ratio: 0.43
• Price to Book (P/B): 3.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 115.66
• 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: $76.82
• Price Target Upside: 13.88% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 67 Neutral
• Price Target: ―

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

Financial Performance

GFL reaffirmed 2025 guidance and suggested that there are multiple avenues to exceed it before considering the accelerating M&A.

Mergers & Acquisitions

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

Operational Improvement

Labor turnover improved 200 bps yoy and almost 800 bps from 1Q23 and should continue to provide numerous cost and safety benefits.

Negative Factors

Earnings Risk

The risk to earnings estimates appears weighted to the upside.

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 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

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

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

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.62B	7.86B	7.52B	6.76B	5.53B	4.20B
	Gross Profit
1.48B	1.49B	1.27B	797.60M	527.60M	190.10M
	EBIT
-20.50M	415.00M	389.20M	87.90M	-64.30M	-320.30M
	EBITDA
1.14B	1.22B	2.33B	1.63B	1.09B	303.80M
	Net Income Common Stockholders
2.86B	-722.70M	45.40M	-183.20M	-606.80M	-994.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
537.20M	133.80M	135.70M	82.10M	190.40M	27.20M
	Total Assets
19.47B	21.21B	20.67B	19.77B	18.37B	15.73B
	Total Debt
7.48B	10.55B	9.29B	9.65B	8.29B	7.74B
	Net Debt
6.95B	10.42B	9.15B	9.56B	8.10B	7.72B
	Total Liabilities
11.18B	13.99B	13.29B	13.72B	12.60B	10.05B
	Stockholders Equity
8.05B	6.98B	7.18B	6.04B	5.78B	5.68B
Cash Flow		Free Cash Flow
234.90M	347.20M	-74.70M	316.20M	250.70M	73.90M
	Operating Cash Flow
1.45B	1.54B	980.40M	1.10B	897.90M	502.20M
	Investing Cash Flow
4.09B	-1.68B	-310.40M	-1.73B	-2.69B	-4.35B
	Financing Cash Flow
-5.06B	163.20M	-602.80M	569.00M	1.96B	3.34B

GFL Environmental Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 67.46
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 Negative. The current price of 67.46 is below the 20-day moving average (MA) of 68.80, below the 50-day MA of 67.83, and above the 200-day MA of 62.36, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 46.65 is Neutral, neither overbought nor oversold. The STOCH value of 52.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GFL.

GFL Environmental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFL	67 Neutral	$24.74B	9.57	-10.02%	0.12%	1.37%	-9742.41%
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.39%	3.96%	-12.36%
WCN		$50.77B	81.03	7.96%	0.61%	―	―
BLM	68 Neutral	C$52.80M	230.65	1.32%	―	21.58%	-37.37%
BQE		C$60.12M	12.40	27.22%	―	―	―
SES	76 Outperform	C$3.35B	17.64	16.22%	2.76%	13.51%	-58.43%
VTX		C$28.90M	―	-11.65%	―	―	―

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.

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.