TFI International Inc. (TFII) Fair Value Analysis (2026)

Executive Summary

TFI International Inc. appears undervalued, trading in the lower third of its 52-week range with a closing price of $83.22. The company's valuation is supported by a strong free cash flow yield of 10.17% and a relatively low EV/EBITDA multiple of 9.6x compared to its recent history. Key weaknesses include recent negative earnings growth and a balance sheet with negative tangible book value due to high goodwill. Overall, the combination of strong cash generation and a depressed share price presents a positive takeaway for value-oriented investors.

Comprehensive Analysis

Based on the closing price of $83.22 on November 19, 2025, a detailed valuation analysis suggests that TFI International's stock is currently trading below its intrinsic worth. Various valuation methods point towards a potential upside, with analyst price targets implying a significant 66.9% increase to the consensus midpoint. However, investors should be mindful of recent negative earnings growth and a balance sheet with significant intangible assets which could pose risks.

The multiples approach shows TFII's EV/EBITDA ratio of 9.6x is a notable discount from its recent fiscal 2024 multiple of 12.83x, suggesting it's inexpensive relative to its own history. While its trailing P/E of 21.19x is slightly above the industry average, its forward P/E of 17.33x points to expected earnings recovery. A conservative fair value derived from these multiples might fall in the $90 - $110 range. The strongest case for undervaluation comes from its cash flow; an exceptional free cash flow yield of 10.17% supports a growing dividend and implies a share value around $97, assuming a 9% required return.

Conversely, an asset-based approach is less reliable. The company's price-to-book ratio is 2.59x, but its tangible book value per share is negative (-$0.06) due to substantial goodwill from its acquisition strategy. This means the company's value is dependent on its ability to generate earnings from these acquired assets rather than their liquidation value. In conclusion, a triangulated valuation, weighted heavily on cash flow and multiples, places TFII's fair value in the range of $95 - $115, suggesting the stock is undervalued with a meaningful margin of safety at its current price.

Factor Analysis

Leverage and Interest Risk

Fail

While the company's leverage is within industry norms, a high debt-to-equity ratio and negative tangible book value present a notable risk to valuation.

TFI International's leverage, measured by Debt-to-EBITDA, is 2.51x. This is within the typical range for industrial companies, which can be between 2.5x and 4x. The Industrial Distribution sector average is around 2.01x, placing TFII slightly above its direct peers. However, the Debt-to-Equity ratio of 1.14x is relatively high, indicating that the company uses more debt than equity to finance its assets. The most significant concern is the negative tangible book value per share of -$0.06, which means that common stockholders would theoretically receive nothing if the company were liquidated after paying off all debts and selling only its tangible assets. This reliance on the value of intangible assets like goodwill from acquisitions warrants a "Fail" rating, as it reduces downside protection for investors.

EV/EBITDA vs History and Peers

Pass

The stock's current EV/EBITDA multiple is trading at a discount to its recent historical average, suggesting it is relatively inexpensive based on past valuation levels.

The Enterprise Value to EBITDA (EV/EBITDA) ratio is a crucial metric for evaluating asset-heavy industrial companies because it is independent of capital structure. TFII's current TTM EV/EBITDA is 9.6x. This represents a significant contraction from the 12.83x multiple seen at the end of fiscal year 2024. The company's median EV/EBITDA over the past 13 years is 8.64x, indicating the current multiple is closer to its long-term average. While industry valuation multiples for vehicle rental can range from 4x to 8x, TFII's more complex logistics and trucking operations justify a somewhat higher multiple. Because the current multiple is well below its recent peak and near its historical median, this factor receives a "Pass".

FCF Yield and Dividends

Pass

An exceptionally high free cash flow yield and a well-covered, growing dividend provide strong valuation support and cash returns to shareholders.

TFI International demonstrates robust cash generation. Its free cash flow (FCF) yield is an impressive 10.17%, which is very attractive in the current market. This high yield suggests the company has ample cash to reinvest in the business, pay down debt, and return capital to shareholders. The dividend provides further support. The current dividend yield is 2.21%, and the payout ratio is a healthy 46.77% of TTM earnings, indicating the dividend is safe and has room to grow. The company has also demonstrated a commitment to dividend growth, with recent quarterly increases of 12.5%. This combination of high FCF yield and a secure, growing dividend provides a strong downside cushion for the stock's valuation, earning a clear "Pass".

P/E and EPS Growth

Fail

Recent earnings have been declining, and despite analyst expectations for a rebound, the misalignment between a high P/E ratio and negative trailing growth presents a risk.

The company's trailing P/E ratio is 21.19x, which is not excessively high but requires growth to be justified. However, recent performance has been weak, with EPS growth for the last two quarters at -13.97% and -31.08% respectively. This negative growth trend is a significant concern. While the forward P/E of 17.33x implies that analysts expect a strong recovery in earnings of over 20% in the next fiscal year, this turnaround is not yet visible in the reported financials. A PEG ratio, which compares the P/E ratio to growth, cannot be meaningfully calculated with negative trailing growth. The sharp divergence between poor recent results and optimistic forecasts makes this a risky proposition, warranting a "Fail" until a recovery is confirmed.

Price-to-Book and Asset Backing

Fail

A negative tangible book value per share indicates a lack of downside protection from physical assets, making the investment heavily reliant on future earnings generation.

For a company in an asset-heavy industry like transportation and logistics, a strong asset base can provide a margin of safety for investors. TFII's Price-to-Book (P/B) ratio is 2.59x, which on its own is not alarming. However, the critical issue is the tangible book value per share, which stands at -$0.06. This figure is calculated by taking shareholders' equity and subtracting intangible assets and goodwill. A negative value signifies that if the company were to be liquidated, the proceeds from its physical assets would not be enough to cover its liabilities, leaving nothing for common shareholders. This is largely due to the $1.985 billion in goodwill on its balance sheet from past acquisitions. While the company's Return on Equity (ROE) of 12.74% is healthy, the lack of tangible asset backing is a major risk, leading to a "Fail" for this factor.