GFL Environmental Inc. (TSE:GFL) saw a decent share price growth of 10% on the TSX over the last few months. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, what if the stock is still a bargain? Let's examine GFL Environmental's valuation and outlook in more detail to determine if there's still a bargain opportunity.
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Good news, investors! GFL Environmental is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is CA$88.24, but it is currently trading at CA$67.46 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.
Check out our latest analysis for GFL Environmental
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. However, with an expected decline of -0.8% in revenues over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for GFL Environmental. This certainty tips the risk-return scale towards higher risk.
Are you a shareholder? Although GFL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to GFL, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you've been keeping an eye on GFL for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.