Analysts Expect GFL Environmental Inc. (TSE:GFL) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at GFL Environmental Inc.'s (TSE:GFL) future prospects. GFL Environmental Inc. provides non-hazardous solid waste management and environmental services in Canada and the United States. The company’s loss has recently broadened since it announced a CA$803m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$814m, moving it further away from breakeven. Many investors are wondering about the rate at which GFL Environmental will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Consensus from 15 of the Canadian Commercial Services analysts is that GFL Environmental is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CA$3.5b in 2025. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 22% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving GFL Environmental's growth isn’t the focus of this broad overview, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

See our latest analysis for GFL Environmental

One thing we would like to bring into light with GFL Environmental is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in GFL Environmental's case is 85%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of GFL Environmental to cover in one brief article, but the key fundamentals for the company can all be found in one place – GFL Environmental's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is GFL Environmental worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether GFL Environmental is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GFL Environmental’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.