What Makes Interface (TILE) a Compelling Investment Opportunity?

Riverwater Partners, an investment management company, released its “Micro Opportunities Strategy” Q2 2025 investor letter. A copy of the letter can be downloaded here. The strategy underperformed the benchmark in the second quarter due to the portfolio’s defensive positioning and the market’s preference for low-quality companies. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Riverwater Micro Opportunities Strategy highlighted stocks such as Interface, Inc. (NASDAQ:TILE). Interface, Inc. (NASDAQ:TILE) engages in the design, production, and distribution of modular carpet products. The one-month return of Interface, Inc. (NASDAQ:TILE) was 13.13%, and its shares gained 59.93% of their value over the last 52 weeks. On September 05, 2025, Interface, Inc. (NASDAQ:TILE) stock closed at $28.18 per share, with a market capitalization of $1.645 billion.

Riverwater Micro Opportunities Strategy stated the following regarding Interface, Inc. (NASDAQ:TILE) in its second quarter 2025 investor letter:

“Interface, Inc. (NASDAQ:TILE) is a global flooring manufacturer specializing in modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring, primarily for commercial and institutional markets under brands like Interface® and FLOR®. The company presents a compelling investment opportunity driven by a disciplined, product-focused management team under CEO Laurel Hurd, strong replacement cycle dynamics in commercial flooring, and leadership in sustainable product offerings.

Financially, TILE offers upside potential from current levels with improving margins, recurring revenue characteristics, and exposure to a $9 billion addressable market within the broader $39 billion global commercial flooring industry. On the ESG front, Interface stands out for its significant reductions in product carbon intensity, elimination of harmful chemicals (including PFAS), and ambitious goals to become carbon negative by 2040, supported by executive-level sustainability oversight and dedicated board governance. These combined strategic, financial, and environmental credentials support a positive long-term outlook for TILE.”

Interface, Inc. (NASDAQ:TILE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Interface, Inc. (NASDAQ:TILE) at the end of the second quarter, which was 23 in the previous quarter. Interface, Inc. (NASDAQ:TILE) reported second-quarter net sales of $375.5 million, marking an 8.3% increase compared to Q2 2024, which exceeded expectations. While we acknowledge the risk and potential Interface, Inc. (NASDAQ:TILE) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Interface, Inc. (NASDAQ:TILE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.