GFL Environmental Inc. (GFL): A Bull Case Theory

We came across a bullish thesis on GFL Environmental Inc. (GFL) on Substack by 310 Value. In this article, we will summarize the bulls’ thesis on GFL. GFL Environmental Inc. (GFL)’s share was trading at $48.07 as of April 23^rd. GFL’s trailing and forward P/E were 1.91 and 64.52 respectively according to Yahoo Finance.

A fleet of waste management vehicles, signifying the company’s efficient services.

GFL Environmental is strategically positioned to create shareholder value by leveraging a combination of durable earnings, volatile stock price dynamics, and opportunistic share repurchases. Operating in the resilient municipal waste industry, GFL benefits from steady, predictable earnings. However, the company has historically traded at a valuation discount compared to peers, due in part to two primary concerns: elevated leverage and a lingering sponsor overhang. Following the lucrative sale of its Environmental Services (ES) business, GFL is addressing both of these issues. A portion of the proceeds will be used to reduce leverage, aligning the company’s debt profile with that of its industry counterparts. This not only strengthens the balance sheet but also removes a key investor concern. Simultaneously, the company has taken proactive steps to resolve the sponsor overhang, having obtained approval from the Ontario Securities Commission to allow a larger share of repurchases under the NCIB to come from sponsor-held shares. This regulatory relief enables GFL to shrink the public float of sponsor shares more efficiently, clearing a path to a cleaner capital structure. Management’s conviction in the undervaluation of GFL’s shares is evident, and their commitment to disciplined capital allocation—especially through buybacks—underscores their focus on driving per-share value. The company’s recent analyst day reinforced this thesis, with clear messaging on its strategic priorities and the mechanics by which it intends to close the valuation gap. With catalysts in place, GFL represents a compelling opportunity where operational resilience meets capital deployment precision, unlocking significant upside for equity investors.

GFL Environmental Inc. (GFL) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held GFL at the end of the fourth quarter which was 32 in the previous quarter. While we acknowledge the risk and potential of GFL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GFL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.