NasdaqGS:TILE

Stock Analysis Report

Executive Summary

Interface, Inc., a modular flooring company, designs, produces, and sells modular carpet products primarily in the Americas, Europe, and the Asia-Pacific.

Rewards

Trading at 42.7% below its fair value

Earnings are forecast to grow 11.53% per year

Earnings grew by 43.2% over the past year

Pays a high and reliable dividend of 1.61%

Risk Analysis

Debt is not well covered by operating cash flow

Large one-off items impacting financial results



Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Interface's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TILE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

TILE

0.9%

US Commercial Services

0.06%

US Market


1 Year Return

-12.2%

TILE

22.8%

US Commercial Services

19.4%

US Market

Return vs Industry: TILE underperformed the US Commercial Services industry which returned 22.8% over the past year.

Return vs Market: TILE underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

TILEIndustryMarket
7 Day-2.4%0.9%0.06%
30 Day-7.4%3.7%1.1%
90 Day-2.0%9.5%8.9%
1 Year-10.7%-12.2%27.1%22.8%21.9%19.4%
3 Year-5.7%-9.6%65.4%54.5%48.9%39.3%
5 Year-12.7%-18.0%104.7%82.8%71.9%53.1%

Price Volatility Vs. Market

How volatile is Interface's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Interface undervalued compared to its fair value and its price relative to the market?

42.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TILE ($16.1) is trading below our estimate of fair value ($28.1)

Significantly Below Fair Value: TILE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TILE is good value based on its PE Ratio (13.8x) compared to the Commercial Services industry average (26.4x).

PE vs Market: TILE is good value based on its PE Ratio (13.8x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: TILE is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: TILE is overvalued based on its PB Ratio (2.6x) compared to the US Commercial Services industry average (1.8x).


Next Steps

Future Growth

How is Interface forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

11.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TILE's forecast earnings growth (11.5% per year) is above the savings rate (1.7%).

Earnings vs Market: TILE's earnings (11.5% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: TILE's earnings are forecast to grow, but not significantly.

Revenue vs Market: TILE's revenue (2.8% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: TILE's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TILE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Interface performed over the past 5 years?

4.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TILE has a large one-off loss of $39.5M impacting its September 29 2019 financial results.

Growing Profit Margin: TILE's current net profit margins (5.2%) are higher than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: TILE's earnings have grown by 4.4% per year over the past 5 years.

Accelerating Growth: TILE's earnings growth over the past year (43.2%) exceeds its 5-year average (4.4% per year).

Earnings vs Industry: TILE earnings growth over the past year (43.2%) exceeded the Commercial Services industry 0.2%.


Return on Equity

High ROE: TILE's Return on Equity (19.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Interface's financial position?


Financial Position Analysis

Short Term Liabilities: TILE's short term assets ($564.8M) exceed its short term liabilities ($255.0M).

Long Term Liabilities: TILE's short term assets ($564.8M) do not cover its long term liabilities ($812.2M).


Debt to Equity History and Analysis

Debt Level: TILE's debt to equity ratio (177.4%) is considered high.

Reducing Debt: TILE's debt to equity ratio has increased from 81% to 177.4% over the past 5 years.

Debt Coverage: TILE's debt is not well covered by operating cash flow (19.4%).

Interest Coverage: TILE's interest payments on its debt are well covered by EBIT (5.4x coverage).


Balance Sheet

Inventory Level: TILE has a high level of physical assets or inventory.

Debt Coverage by Assets: TILE's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Interface's current dividend yield, its reliability and sustainability?

1.61%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: TILE's dividend (1.61%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: TILE's dividend (1.61%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: TILE's dividends per share have been stable in the past 10 years.

Growing Dividend: TILE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.3%), TILE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TILE's dividends in 3 years are forecast to be thoroughly covered by earnings (13.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Daniel Hendrix (64yo)

0.08yrs

Tenure

US$746,468

Compensation

Mr. Daniel T. Hendrix, also known as Dan, serves as President and Chief Executive Officer at Interface, Inc. since January 20, 2020. He serves as the Chief Executive Officer and President of InterfaceFLOR  ...


CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD746.47K) is below average for companies of similar size in the US market ($USD2.50M).

Compensation vs Earnings: Daniel's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Daniel Hendrix
President0.08yrsUS$746.47k0.34% $3.3m
Bruce Hausmann
VP & CFO2.8yrsUS$1.56m0.14% $1.3m
Nigel Stansfield
President of Interface Europe7.9yrsUS$1.18m0.091% $867.1k
Gregory Bauer
VP & Chief Accounting Officer (Leave of Absence)2.3yrsno data0.029% $277.6k
David Foshee
VP, General Counsel & Secretary3.1yrsno data0.13% $1.2m
Christine Needles
Global Head of Corporate Communications0yrsno datano data
Kathleen Owen
VP & Chief Human Resources Officer4.7yrsno data0.081% $780.1k
Erin Meezan
Chief Sustainability Officer and Vice President3.1yrsno datano data
Chip DeGrace
Chief Design Officer3.4yrsno datano data

3.1yrs

Average Tenure

50yo

Average Age

Experienced Management: TILE's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Daniel Hendrix
President0.08yrsUS$746.47k0.34% $3.3m
James Miller
Independent Director19.8yrsUS$166.39k0.11% $1.1m
Christopher Kennedy
Lead Independent Director0yrsUS$182.64k0.23% $2.2m
Andrew Cogan
Independent Director7.1yrsUS$171.39k0.050% $475.6k
K. Kohler
Independent Director13.3yrsUS$166.39k0.091% $869.2k
John Burke
Independent Director6.6yrsUS$166.39k0.046% $442.7k
Catherine Kilbane
Independent Director1.6yrsUS$61.49k0.013% $123.2k
Jay Gould
Director0.08yrsUS$5.10m0.54% $5.2m
Sheryl Palmer
Independent Director4.3yrsUS$173.89k0.031% $294.3k
Dwight Audley Gibson
Director0.5yrsno data0.0068% $65.1k

6.6yrs

Average Tenure

56.5yo

Average Age

Experienced Board: TILE's board of directors are considered experienced (6.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Interface, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Interface, Inc.
  • Ticker: TILE
  • Exchange: NasdaqGS
  • Founded: 1973
  • Industry: Office Services and Supplies
  • Sector: Commercial Services
  • Market Cap: US$958.069m
  • Shares outstanding: 58.42m
  • Website: https://www.interface.com

Number of Employees


Location

  • Interface, Inc.
  • 1280 West Peachtree Street NW
  • Midtown
  • Atlanta
  • Georgia
  • 30309
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TILENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDApr 1983
IF6NDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1983
TILE *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 1983

Biography

Interface, Inc., a modular flooring company, designs, produces, and sells modular carpet products primarily in the Americas, Europe, and the Asia-Pacific. The company offers modular carpets under the Interface and FLOR names; carpet tiles under the GlasBacRE name for use in commercial interiors, including offices, healthcare facilities, airports, educational and other institutions, hospitality spaces, and retail facilities, as well as residential interiors; modular resilient flooring products; rubber flooring under the norament and noraplan brands; and luxury vinyl tile products. It also produces and sells an adapted version of its carpet tile for the healthcare facilities market; and two-meter roll goods that are structure-backed for use in education, healthcare, and government markets, as well as carpet replacement, installation, and maintenance services. In addition, the company sells and licenses a proprietary antimicrobial chemical compound under the Intersept name for use in air filters; sells TacTiles, a carpet tile installation system, as well as various adhesives and products; and provides turnkey project management services for national accounts and other customers through its InterfaceSERVICES business. It sells its products directly to end-users, as well as indirectly through independent contractors or distributors; and FLOR line of products through Internet sales and commercial sales force. The company has product showrooms or design studios in the United States, Canada, Mexico, Brazil, Denmark, England, France, Germany, Spain, the Netherlands, India, Australia, Norway, the United Arab Emirates, Russia, Singapore, Hong Kong, Thailand, China, and others. Interface, Inc. was founded in 1973 and is headquartered in Atlanta, Georgia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:17
End of Day Share Price2020/02/18 00:00
Earnings2019/09/29
Annual Earnings2018/12/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.