- By GF Value
The stock of Interface (NAS:TILE, 30-year Financials) gives every indication of being modestly undervalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $12.66 per share and the market cap of $742.4 million, Interface stock shows every sign of being modestly undervalued. GF Value for Interface is shown in the chart below.
Because Interface is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth, which averaged 5.5% over the past five years.
Link: These companies may deliever higher future returns at reduced risk.
Companies with poor financial strength offer investors a high risk of permanent capital loss. To avoid permanent capital loss, an investor must do their research and review a company's financial strength before deciding to purchase shares. Both the cash-to-debt ratio and interest coverage of a company are a great way to to understand its financial strength. Interface has a cash-to-debt ratio of 0.15, which which ranks worse than 83% of the companies in the industry of Furnishings, Fixtures & Appliances. The overall financial strength of Interface is 4 out of 10, which indicates that the financial strength of Interface is poor. This is the debt and cash of Interface over the past years:
Investing in profitable companies carries less risk, especially in companies that have demonstrated consistent profitability over the long term. Typically, a company with high profit margins offers better performance potential than a company with low profit margins. Interface has been profitable 9 years over the past 10 years. During the past 12 months, the company had revenues of $1.1 billion and loss of $1.24 a share. Its operating margin of 7.01% in the middle range of the companies in the industry of Furnishings, Fixtures & Appliances. Overall, GuruFocus ranks Interface's profitability as fair. This is the revenue and net income of Interface over the past years:
Growth is probably the most important factor in the valuation of a company. GuruFocus research has found that growth is closely correlated with the long term stock performance of a company. A faster growing company creates more value for shareholders, especially if the growth is profitable. The 3-year average annual revenue growth of Interface is 5.5%, which ranks in the middle range of the companies in the industry of Furnishings, Fixtures & Appliances. The 3-year average EBITDA growth rate is -78.9%, which ranks in the bottom 10% of the companies in the industry of Furnishings, Fixtures & Appliances.
One can also evaluate a company's profitability by comparing its return on invested capital (ROIC) to its weighted average cost of capital (WACC). Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. If the return on invested capital exceeds the weighted average cost of capital, the company is likely creating value for its shareholders. During the past 12 months, Interface's ROIC is 6.50 while its WACC came in at 9.52. The historical ROIC vs WACC comparison of Interface is shown below:
In conclusion, Interface (NAS:TILE, 30-year Financials) stock shows every sign of being modestly undervalued. The company's financial condition is poor and its profitability is fair. Its growth ranks in the bottom 10% of the companies in the industry of Furnishings, Fixtures & Appliances. To learn more about Interface stock, you can check out its 30-year Financials here.
To find out the high quality companies that may deliever above average returns, please check out GuruFocus High Quality Low Capex Screener.
This article first appeared on GuruFocus.
"interface" - Google News
April 12, 2021 at 05:12PM
https://ift.tt/3uHEoLB
Interface Stock Shows Every Sign Of Being Modestly Undervalued - Yahoo Finance
"interface" - Google News
https://ift.tt/2z6joXy
https://ift.tt/2KUD1V2
Bagikan Berita Ini
0 Response to "Interface Stock Shows Every Sign Of Being Modestly Undervalued - Yahoo Finance"
Post a Comment