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Interface, Inc. (TILE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Interface, Inc. (TILE)

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Intrinsic Value (DCF)

Current$30.81
→
Intrinsic$35.65
+16%
$22.83$35.65$60.02
Market implies 8% growth for 5 years
TILE shows 16% potential upside using 11% growth — reasonable if fundamentals hold.
At $31, the market prices in 8% annual cash flow growth — a moderate expectation aligned with historical trends (11%).
Range: Bear $23 → Bull $60. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →7%9%11%13%
8%$44$48$52$57
10%$30$32$36$39
12%$22$24$26$29
14%$17$19$20$22

Bull Case

  • Bull case ($60) offers 95% upside at 14% growth, 9% discount
  • 14% margin of safety vs. base case estimate
  • Market-implied growth (8%) ≤ historical CAGR (11%)

Bear Case

  • Bear case ($23) implies 26% downside at 9% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$127.60M
Year 2$142.02M
Year 3$158.06M
Year 4$175.93M
Year 5$195.81M
Terminal$2.88B

📐 Model Inputs

Growth Rate11.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$114.64MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is TILE stock undervalued or overvalued?
🟢 UNDERVALUED

TILE trades at $30.81 vs. our DCF-derived intrinsic value of $35.65, implying +21% upside. At a 10.0% WACC and 11.3% projected FCF growth, the market appears to be underpricing the present value of TILE's future cash flows. The bear case ($23.66) still suggests upside, providing margin of safety.

What is TILE's intrinsic value?

Using a 5-year DCF model: Base FCF of $115M, projected at 11.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $284M net debt and dividing by 0.06B shares: Bear $23.66 | Base $35.65 | Bull $52.17. Current price $30.81 implies +21% to base case.

How is TILE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 11.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($2.38B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.8x.