Revenue and appeal up for Vaughan-based firm

GREEN FOR LIFE ENVIRONMENTAL

It’s a good year to be in the garbage business. Vaughan-based GFL, North America’s fourth-largest environmental services company, saw its revenue go up 27.4 per cent year-over-year in the first quarter of 2022.

According to Scotiabank, the relaxation of COVID-19 restrictions in Canada will likely have an outsized impact on the environmental services sector, which took a hit during COVID-19 with offices and other buildings shut down for months on end. The firm’s stock price has gone down in the past year, from more than $32 (Canadian) to more than $28, after a high of more than $41 in October 2021.

A Scotiabank analyst report from May 5 noted that the company has exceeded expectations almost every quarter since it went public in March 2020. The bank is targeting a $46 share price.

“We continue to view GFL’s valuation as a relative outlier, with the company, in our opinion, likely to compound industry leading growth,” the Scotiabank report states, adding that GFL has an opportunity “to capture incremental pricing surcharges.”

GFL’s rise over the past decade has been impressive. In 2011, when it secured a waste collection contract in one Toronto district, it was a fraction of the waste management giant it is today. In the first quarter of 2022 alone, GFL completed nine acquisitions. BMO analyst Devin Dodge saw “encouraging signs” in GFL’s latest earnings, according to a May report.

“These trends should be supportive for attractive earnings growth through the balance of the year and into 2023,” he wrote, rating the stock to outperform.