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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on GFL

GFL Environmental's recent performance has been impacted by concerns over earnings quality, with its Q2 2025 earnings beat expectations but flagged as "of questionable quality" by market observers. Despite a historic EBITDA margin and raised full-year guidance, fueled by strategic acquisitions and pricing strength, investors have been cautious. A recapitalization deal with Energy Capital Partners valued at $4.25 billion for its Green Infrastructure Partners subsidiary brought in a cash infusion, but may not have alleviated all concerns. Truist Financial analyst Tobey Sommer maintained a Buy rating.

1.c. Company Highlights

2. GFL Environmental's Strong Q3 Earnings Exceed Expectations

GFL Environmental reported robust third-quarter earnings, with consolidated revenue growing 9% year-over-year, driven by a 6.3% increase in pricing and a 100 basis point improvement in volume. The company's adjusted EBITDA margin reached 31.6%, the highest in its history. Earnings per share (EPS) came in at $0.23, beating estimates of $0.2064. The strong financial performance was underpinned by disciplined cost management and the contribution from MSW volumes and EPR investments.

Publication Date: Nov -08

📋 Highlights
  • Adjusted EBITDA Margin Record:: Achieved 31.6% for Q3, the highest in company history, driven by pricing, volume, and cost discipline.
  • Revenue Growth Acceleration:: Consolidated revenue rose 9% YoY, with pricing up 6.3% (50 bps sequential) and volume contributing 100 bps growth.
  • GIP Recapitalization & Share Repurchases:: Valued GIP at $4.25B, returned $585M to shareholders, and repurchased $350M in Q3 ($2.8B YTD).
  • Guidance Raised for 2025:: Full-year revenue now $6.575B–$6.6B, and adjusted EBITDA $1.975B (+$50M, +3% over prior guidance).

Revenue Growth and Margin Expansion

The company's revenue growth was driven by a combination of pricing strategies, volume performance, and disciplined cost management. The adjusted EBITDA margin expansion was a notable highlight, with the company achieving a margin of 31.6%, a significant improvement from the previous year. As Luke Pelosi mentioned, "Commodity prices continue to be a drag on margins," but the company's focus on cost management and operational efficiency helped mitigate this impact.

Outlook and Guidance

GFL Environmental raised its guidance for the full year, expecting revenue to be between $6.575 billion and $6.6 billion, and adjusted EBITDA to be around $1.975 billion. The company's guidance uptake was driven by pricing actions, with a 75 basis point increase in pricing, partially offset by fuel surcharge and commodity-related headwinds. Analysts estimate revenue growth of 6.9% for next year, indicating a continued upward trajectory for the company.

Valuation and Return Metrics

Using the current valuation metrics, GFL Environmental's P/E Ratio stands at -12.72, P/B Ratio at 2.88, and EV/EBITDA at 14.41. The company's Net Debt / EBITDA ratio is 3.61, indicating a manageable debt burden. The return metrics, including ROIC and ROE, are -0.51% and -23.52%, respectively, suggesting room for improvement in returns. However, the company's commitment to maintaining a leverage ratio between low 3s and mid-3s and its focus on free cash flow generation provide a stable foundation for future growth.

Share Repurchases and M&A Activity

GFL Environmental repurchased $350 million of shares in the third quarter, bringing the total share repurchases to nearly $2.8 billion year-to-date. The company is also expecting a bigger year on M&A activity next year, potentially 50% higher than this year, with a focus on opportunities within its existing footprint and leveraging existing infrastructure. This strategic focus on capital allocation is expected to drive future growth and returns for the company.

3. NewsRoom

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GFL Environmental (TSX:GFL): Is the Stock Trading Below Fair Value?

Dec -02

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TSX Down 140 Points at Midday With Info Tech The Worst Performer

Dec -01

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GFL Environmental Inc. Announces Pricing of Secondary Offering by Selling Shareholders and Agreement to Repurchase 1,275,000 Subordinate Voting Shares in Secondary Offering

Nov -21

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GFL Environmental Inc. Announces Secondary Offering of 16,611,295 Subordinate Voting Shares by Selling Shareholders

Nov -20

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Major waste companies spent more than $545M on M&A in Q3

Nov -10

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Results: GFL Environmental Inc. Exceeded Expectations And The Consensus Lifted Next Year's Outlook

Nov -08

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GFL Environmental Inc (GFL) Q3 2025 Earnings Call Highlights: Record EBITDA Margin and ...

Nov -07

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GFL Environmental Inc. (GFL) Misses Q3 Earnings Estimates

Nov -05

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.64%)

6. Segments

Solid Waste - United States

Expected Growth: 6.5%

GFL Environmental Inc.'s solid waste segment in the United States is driven by a growing population, urbanization, and increasing waste generation per capita. Additionally, stringent environmental regulations, rising landfill costs, and a shift towards sustainable waste management practices contribute to the 6.5% growth rate.

Solid Waste - Canada

Expected Growth: 7.5%

GFL Environmental Inc.'s solid waste segment in Canada is driven by a 7.5% growth rate, attributed to increasing municipal waste volumes, rising recycling rates, and growing demand for sustainable waste management practices. Additionally, government initiatives promoting waste reduction and diversion, as well as strategic acquisitions and organic growth, contribute to the segment's expansion.

Environmental Services

Expected Growth: 6.0%

GFL Environmental Inc.'s Environmental Services segment growth of 6.0% is driven by increasing demand for sustainable waste management practices, government regulations and policies promoting environmental protection, and strategic acquisitions expanding service offerings and geographic reach.

7. Detailed Products

Solid Waste Management

GFL Environmental Inc. provides solid waste management services, including collection, transfer, and disposal of non-hazardous waste.

Liquid Waste Management

GFL Environmental Inc. offers liquid waste management services, including collection, transportation, and disposal of non-hazardous liquid waste.

Soil Remediation

GFL Environmental Inc. provides soil remediation services, including excavation, treatment, and disposal of contaminated soil.

Gypsum Recycling

GFL Environmental Inc. offers gypsum recycling services, including collection, processing, and resale of recycled gypsum products.

Organic Waste Management

GFL Environmental Inc. provides organic waste management services, including composting, anaerobic digestion, and energy production.

Energy-from-Waste

GFL Environmental Inc. offers energy-from-waste services, including waste-to-energy facilities and landfill gas capture.

8. GFL Environmental Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for GFL Environmental Inc. is moderate due to the presence of alternative waste management services and recycling facilities.

Bargaining Power Of Customers

The bargaining power of customers is low for GFL Environmental Inc. as the company provides essential waste management services to municipalities and industries, giving it a strong negotiating position.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for GFL Environmental Inc. as the company relies on a network of suppliers for fuel, equipment, and other inputs, but has some flexibility to negotiate prices and terms.

Threat Of New Entrants

The threat of new entrants is low for GFL Environmental Inc. due to the high barriers to entry in the waste management industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high in the waste management industry, with several large players competing for market share and contracts, which can lead to pricing pressure and competitive bidding.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.35%
Debt Cost 9.96%
Equity Weight 44.65%
Equity Cost 9.96%
WACC 9.96%
Leverage 123.96%

11. Quality Control: GFL Environmental Inc. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Secure Energy Services

A-Score: 5.8/10

Value: 4.9

Growth: 8.4

Quality: 4.2

Yield: 2.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

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Clean Harbors

A-Score: 4.9/10

Value: 3.8

Growth: 7.6

Quality: 6.6

Yield: 0.0

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
GFL Environmental

A-Score: 4.7/10

Value: 4.0

Growth: 6.1

Quality: 1.9

Yield: 0.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

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Verra Mobility

A-Score: 4.2/10

Value: 2.2

Growth: 4.6

Quality: 7.4

Yield: 0.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Casella Waste Systems

A-Score: 4.0/10

Value: 1.8

Growth: 5.7

Quality: 5.2

Yield: 0.0

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Stericycle

A-Score: 3.0/10

Value: 3.9

Growth: 3.4

Quality: 2.8

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

61.79$

Current Price

61.79$

Potential

-0.00%

Expected Cash-Flows