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The Interface (NASDAQ:TILE) Share Price Has Gained 58% And Shareholders Are Hoping For More - Simply Wall St

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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Interface, Inc. (NASDAQ:TILE) share price is up 58% in the last year, clearly besting the market return of around 37% (not including dividends). That's a solid performance by our standards! In contrast, the longer term returns are negative, since the share price is 29% lower than it was three years ago.

Check out our latest analysis for Interface

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Interface grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We doubt the modest 0.2% dividend yield is doing much to support the share price. Interface's revenue actually dropped 20% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
NasdaqGS:TILE Earnings and Revenue Growth June 7th 2021

We know that Interface has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Interface in this interactive graph of future profit estimates.

A Different Perspective

It's good to see that Interface has rewarded shareholders with a total shareholder return of 59% in the last twelve months. That's including the dividend. That's better than the annualised return of 0.6% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Interface better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Interface you should be aware of, and 1 of them is a bit concerning.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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When trading Interface or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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The Interface (NASDAQ:TILE) Share Price Has Gained 58% And Shareholders Are Hoping For More - Simply Wall St
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