What Does GFL Environmental Inc.'s (TSE:GFL) Share Price Indicate?

GFL Environmental Inc. (TSE:GFL) received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$49.85 at one point, and dropping to the lows of CA$42.69. 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$42.94 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.

Check out our latest analysis for GFL Environmental

Is GFL Environmental Still Cheap?

Great news for investors – GFL Environmental is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is CA$60.64, but it is currently trading at CA$42.94 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because GFL Environmental’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of GFL Environmental look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 more than double over the next couple of years, the 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? Since GFL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on GFL for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GFL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 3 warning signs for GFL Environmental you should be mindful of and 1 of them is concerning.

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.

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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.