Is GFL a good stock to buy?We came across a bullish thesis on GFL Environmental Inc. on TradersPro's Substack. Since the thesis was published on August 29th, GFL shares have made modest gains, supported by the SECURE acquisition and higher guidance, while investors wait to see those growth prospects translate into stronger cash flow. In this article, we will summarize the bulls' thesis on GFL. GFL Environmental Inc.'s share was trading at $43.59 as of October 28th 2026. GFL's forward P/E was 32.64 according to Yahoo Finance.
This isn't the first time we see a waste management company pitched as a great investment. GFL shares gained just 1.49% year to date. Comparable stocks like Waste Connections and Waste Management gained 2.51% and 2.48%, respectively, during the same period. Why are waste management stocks making such limited progress and does GFL's stronger performance since June give investors a reason to take another look?
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In June, we published an article about the 7 Best Canadian Infrastructure Stocks to Buy Now and GFL ranked #5 in that article. GFL returned 9.66% since then, delivering a better result than its modest year-to-date gain might suggest. So, hedge funds were right about GFL. This article highlights GFL among Billionaire Lee Ainslie's 10 Stocks with Huge Upside Potential. Before getting into our analysis, let's take a look at the business and why some investors like the stock so much.
GFL Environmental Inc. (NYSE:GFL) provides waste management and environmental services, including residential garbage collection, recycling, food waste collection, commercial waste hauling, contaminated soil remediation, and liquid waste treatment across Canada and eighteen U.S. states. Its fastest-growing opportunity comes from consolidating fragmented waste markets, and that's central to understanding the stock.
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Waste collection is a defensive business because households and businesses keep producing waste regardless of the economy, while GFL raises prices on existing routes and expands its reach through acquisitions. Its network of landfills supports pricing power and margin growth, creating a model built around steady demand and operational improvement.
The bullish case rests on GFL's consolidation strategy: waste services become more profitable as routes get denser and operations scale up. Each acquisition brings GFL more customers and infrastructure, helping it use its trucks more efficiently, spread fixed costs over a larger base, and strengthen its disposal network. The company continues buying smaller local haulers and expanding its footprint, with a large Western Canadian acquisition currently awaiting regulatory approval.
GFL's growth is also supported by broader industry trends, including rising environmental requirements and demand for specialized waste services. New producer responsibility rules in Canada are directing more volumes toward established operators like GFL, while its contaminated soil remediation and liquid waste capabilities give it exposure beyond traditional garbage collection. If the company keeps integrating acquisitions successfully, it should be able to keep improving density and profitability in an industry that remains fragmented.
The thesis also depends on GFL's ability to use pricing power and operational efficiency to offset rising costs. Diesel prices, labor expenses, equipment costs, and swings in recycling commodity prices remain key risks, though fuel surcharges can absorb some of that impact. The main thing to watch is whether GFL can protect its margins while continuing to make acquisitions, since weak integration or overpaying for assets could erode the benefits of consolidation ( see whether SECURE's scale can offset the acquisition's dilution and added leverage ).
That said, GFL's revenue growth depends on more than simply collecting more waste. Its landfill network and environmental services offer higher-value opportunities than hauling alone, while its contracted routes provide recurring demand. The real test for investors is whether acquisitions and price increases translate into stronger earnings, not just higher revenue.
Execution across acquisitions and operations remains central to the investment case. A confirmation bar has appeared alongside rising trading volume as the stock moved into a momentum zone, pointing to stronger buying interest. Even so, this improving sentiment needs to be backed by sustained operational progress, and GFL still has to prove it can deliver the efficiency gains its consolidation strategy promises.
GFL's biggest opportunity remains the long-term expansion of waste services through scale, but demand concentration and execution risk are still important considerations. Waste collection is a defensive business, yet GFL still needs to show that acquisitions, pricing actions, and specialized environmental services can consistently create shareholder value while it manages inflation and integration challenges.
Another risk for the stock is that landfill liabilities absorb more cash than investors expect. Owning disposal sites supports GFL's pricing power, but it also creates obligations that continue after those sites stop accepting waste. GFL warns that landfill closure, maintenance, and contamination costs could exceed the amounts it has set aside. Unexpected environmental problems could require substantial cleanup spending, while some closure payments could arrive sooner than anticipated. These expenses could consume cash even if collection demand and operating margins remain strong. That would leave less funding for acquisitions, debt reduction, or shareholder returns. In our opinion, the stock's discount could persist if long-term landfill obligations absorb more of the cash generated by its expanding network.
Hedge fund positioning shows a mixed but more cautious signal. As per our database, 33 hedge fund portfolios held GFL Environmental at the end of the second quarter, down from 44 in the previous quarter. This decline suggests institutional support for GFL's business model and acquisition strategy weakened during the quarter. By comparison, Waste Connections (NYSE:WCN) was held by 62 hedge funds, unchanged from 62, Waste Management (NYSE:WM) was held by 64 hedge funds, up from 61, and Republic Services (NYSE:RSG) was held by 58 hedge funds, up from 54. Republic Services stood out with the strongest increase in hedge fund interest, followed by Waste Management, while Waste Connections held steady, suggesting institutional enthusiasm shifted toward GFL's peers as interest in the company cooled.
Short interest data also paints a fairly cautious picture for GFL Environmental Inc. relative to its peers. About 9.80% of GFL Environmental Inc.'s float is sold short, well above Republic Services, Inc. at 2.54%, Waste Connections, Inc. at 2.40%, and Waste Management, Inc. at 1.95%. This suggests GFL Environmental Inc. is drawing considerably more skepticism than all three peers, as investors weigh its acquisition strategy, valuation, and debt levels.
Valuation Analysis
GFL's EV/EBITDA is 23.16x. Republic Services, Inc., Waste Connections, Inc., and Waste Management, Inc. trade at EV/EBITDA multiples of 16.81x, 17.59x, and 14.88x, respectively. GFL's own EV/EBITDA was 17.00x on December 31, 2025, making its current multiple approximately 36% higher. We believe the current valuation leaves investors relying on successful acquisition integration, stronger route density, and sustained margin expansion. However, the premium appears demanding given that GFL trades above all three peers while carrying debt and substantial ongoing infrastructure requirements. GFL's acquisitions can improve truck utilization and spread fixed costs across more customers, while pricing increases support profitability, but these benefits must generate cash after equipment replacement and landfill spending. We believe GFL can justify its current valuation only if operating improvements deliver sustained earnings growth without acquisitions continually increasing financial risk. If GFL integrates acquisitions successfully and strengthens cash generation while controlling debt, its premium could be justified, but the current valuation offers limited room for disappointment and we would wait for a lower price before buying.
Previously, we covered a bullish thesis on Waste Management (WM) by Francesco Ferrari in April 2025, which highlighted the company's stable growth, strong profitability, and ability to deliver market-beating returns with low volatility. WM's stock price has depreciated by approximately 2.49% since our coverage. We believe GFL could offer an attractive entry point at a lower valuation if acquisitions strengthen cash generation and debt remains controlled, despite its landfill and integration risks.
GFL Environmental Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds . While GFL could benefit from continued route consolidation and stronger cash generation if it controls debt, we believe some AI stocks offer stronger long-term potential at more attractive valuations, with a high probability of delivering superior returns on a much shorter timeline. If you are looking for an AI stock that is more promising than GFL and that has 10,000% upside potential, check out our report about this cheapest AI stock .
Disclosure: None.
