Is Now An Opportune Moment To Examine GFL Environmental Inc. (TSE:GFL)?

Today we're going to take a look at the well-established GFL Environmental Inc. (TSE:GFL). The company's stock received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$51.75 at one point, and dropping to the lows of CA$45.62. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether GFL Environmental's current trading price of CA$47.83 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at GFL Environmental’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for GFL Environmental

What's The Opportunity In GFL Environmental?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.6% below my intrinsic value, which means if you buy GFL Environmental today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CA$48.61, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since GFL Environmental’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from GFL Environmental?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 68% over the next year, the near-term future seems bright for GFL Environmental. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in GFL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on GFL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 2 warning signs with GFL Environmental, and understanding these should be part of your investment process.

If you are no longer interested in GFL Environmental, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.