TFI INTERNATIONAL INC. (TFII): what the price assumes

In the published model solve dated 2026-Q2, anchored at $139.37, TFI INTERNATIONAL INC. (TFII) is priced for today's economics sustained for ~5.2 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/TFII

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.4% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.

How unusual the bet is: elevated

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.8%); the inversion above states its own rate.

Per-Model Detail (n=14)

Solvency

Bullet Takeaways

• TFI International has grown free cash flow four years running, from $620.8M to $704.6M, while operating margin fell from 13.0% to 7.2%; the cash engine kept compounding straight through the freight recession.
• The price leans on recovery: at 39.4x trailing GAAP earnings versus a 20x sector median, the asset-value and earnings-power methods read $147.41 (July 11, 2026) at roughly three times what current profits support, so a stalled freight cycle is the direct risk to the multiple.
• Second-quarter results land July 27, 2026, with management guiding Q2 2026 adjusted EPS of $1.50 to $1.60 and a 400 to 500 basis point sequential improvement in operating ratio; that print is the first hard test of the recovery the price already assumes.

Bull Case

Follow the earnings trajectory line by line and an odd thing shows up. Revenue slid from $8.81B in 2022 to $7.88B in 2025, operating margin nearly halved from 13.0% to 7.2%, and EPS fell from $9.21 to $3.74, which is what three years of freight recession looks like. Free cash flow did the opposite. It rose every single year, $620.8M to $652.3M to $669.8M to $704.6M, helped by capex discipline that cut spending to $273.2M in the latest year. Trailing free cash flow now runs at more than twice reported net income. The downturn did not break the cash machine; it revealed it, because a trucking company that throttles fleet spending in a weak market converts depreciation into cash while earnings take the optical hit.

The cycle itself is the second leg. First-quarter 2026 adjusted diluted EPS was $0.69, and management guided the second quarter to $1.50 to $1.60 with a 400 to 500 basis point sequential improvement in operating ratio, including 600 to 700 basis points in the less-than-truckload business. That is management telling you the worst quarter of the year is behind it, in numbers rather than adjectives. Chairman and CEO Alain Bedard has also been explicit that the acquisition pipeline remains active, with less-than-truckload scale the stated priority. TFI built itself through decades of bolt-on deals, and a prolonged freight downturn is precisely when sellers get realistic; a buyer with $704.6M of trailing free cash flow gets to be choosy.

Capital allocation keeps paying shareholders while they wait. The quarterly dividend was raised 4% to $0.47 in April 2026, the annual payout of $1.82 per share has been growing, and the share count is shrinking rather than diluting. The company is profitable, generates operating cash well above net income, has been reducing debt, and sits in the safe zone on bankruptcy-risk measures with leverage that is moderate and well covered by earnings. If less-than-truckload margins recover even partway toward the company average, the earnings snap-back arrives on a smaller share count, and today's depressed $3.74 of trailing EPS becomes the wrong denominator entirely.

Bear Case

The price is a stack of assumptions about the future, and the most load-bearing one is the freight recovery arriving on schedule. At $147.41 the market is paying about 27 times company-wide operating income, which implies operating growth held near the fastest pace the company could fund from its own cash flow for roughly six years. Of comparable fast growers, only about 27% have sustained that kind of run for even five to six years. The single most fragile input is the assumption that fiscal 2025's 7.2% operating margin is the cycle bottom rather than the new normal, because every dollar of the premium over what current earnings support depends on margins climbing back toward the 13.0% the company posted in 2022.

The recent evidence points the other way. Revenue fell 6.1% year over year, operating income fell 21.4%, and net income fell 26.5% in the latest annual figures. The slide continued into 2026: first-quarter operating income was $96.6M against $114.6M a year earlier, and free cash flow for the quarter dropped to $123.7M from $191.7M. Management declined to give full-year guidance, citing trade and fuel uncertainty, which is a candid admission that the company cannot yet see the recovery the stock price requires. Margins have now compressed four consecutive years. A bet on mean reversion is reasonable; a bet on mean reversion with a specific arrival date embedded in a 39.4x trailing earnings multiple is a different proposition.

The second dependency is the acquisition engine. The growth story leans on management's stated intent to buy less-than-truckload scale, yet the company currently earns a 7.1% return on invested capital against an 8.3% cost of capital, meaning each incremental dollar deployed today earns less than it costs. Integrating large freight acquisitions into a soft market has a way of extending that gap rather than closing it. The balance sheet is not stressed, but the current ratio of 1.03 means short-term obligations roughly match the assets that can quickly cover them, leaving little slack if the cycle stays down longer than the guidance window assumes.

Valuation

The methods split into two camps, and the split is the story. Peer-multiple comparisons read $147.41 (July 11, 2026) as roughly fair, and the cash-flow methods that credit forward growth land close to it. The asset-value and earnings-power families land near a third of the price; the price sits at about 3.5x what asset-based approaches support and 3.2x what steady-state earnings power supports. That pattern is what a cyclical trough looks like in a valuation scan: methods anchored to today's depressed profits scream expensive, while methods that let earnings normalize get comfortable. The market has, in effect, already decided 2025 earnings were the bottom.

What has to be true is specific. Today's price is paying about 27 times company-wide operating income, and working backward, it embeds operating growth near the self-funding ceiling for roughly six years, a pace that only about 27% of comparable fast growers have historically sustained that long. Alternatively, and more plausibly, it embeds margin recovery: operating margin was 13.0% in 2022 and 7.2% in 2025, so a return even most of the way back closes much of the gap without heroic growth. The multiples tell the same story from another angle. At 39.4x trailing earnings TFI is nearly double the 20x sector median, yet at 13.4x EV/EBITDA it sits essentially on the 13x sector norm, which is what happens to an asset-heavy trucker when depreciation is steady but earnings are cyclically crushed; the cash-flow methods reach today's price only by holding that EBITDA multiple flat through the forecast.

The balance sheet can carry the wait. Leverage is moderate and well covered by earnings, the company sits in the safe zone on solvency measures, free cash flow of $704.6M gives a 5.75% yield on the market value, the $1.82 annual dividend is growing, and the share count is falling. Downside protection here is cash generation, not asset backing. The decisive number is the operating margin: at 7.2% the price is far ahead of the evidence, and each point of recovery converts the premium into earnings.

Catalysts

The near-term calendar centers on July 27, 2026, when TFI reports second-quarter results after the close, with Chairman and CEO Alain Bedard and CFO David Saperstein hosting the webcast that afternoon. Management set the bar itself: Q2 2026 adjusted diluted EPS guidance of $1.50 to $1.60, a 400 to 500 basis point sequential operating-ratio improvement company-wide, with 600 to 700 basis points expected in less-than-truckload, 200 to 300 in truckload, and 75 to 125 in logistics. Against first-quarter adjusted EPS of $0.69, hitting that range would be the first quantified proof of the recovery; missing it would leave a 39x trailing multiple with no visible support.

Management is not offering full-year guidance, citing trade and fuel-related uncertainty, while holding net capital expenditures excluding real estate at $225M to $250M. The sell side has been warming ahead of the print: on July 7, 2026, UBS maintained a Neutral rating while raising its price target from $110 to $154. The other live thread is M&A. Bedard has signaled an active acquisition pipeline with less-than-truckload scale as the priority, so any announced deal, particularly in US LTL, would reshape the growth math ahead of the cycle turn. The 4% dividend raise to $0.47 quarterly, approved in April, continues the payout-growth cadence income holders are watching.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• KNX (Knight-Swift Transportation Holdings Inc.)
• FY2025 10-K: …Logistics gross margin (revenue, excluding intersegment transactions, less purchased transportation expense, excluding intersegment transactions) as a percentage of logistics revenue, excluding intersegment transactions Average Containers Intermodal Average containers in operation during the period GAAP Operating…
• FY2025 10-K: …and numerous competitive factors could limit growth opportunities and could have a materially adverse effect on our results of operations. We operate in a highly competitive industry. The following factors could limit our growth opportunities and have a materially adverse effect on our results of operations: • many…
• TRI (THOMSON REUTERS CORPORATION)
• FY2025 40-F: Common Shares TRI The Nasdaq Stock Market LLC 3.350% Notes due 2026 (1) TRI26 The Nasdaq Stock Market LLC 5.850% Notes due 2040 (1) TRI40 The Nasdaq Stock Market LLC 4.500% Notes due 2043 (1) TRI143A The Nasdaq Stock Market LLC 5.650% Notes due 2043 (1) TRI143B The Nasdaq Stock Market LLC 5.500% Debentures due 2035…
• FY2025 40-F: …the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark…
• WYNN (WYNN RESORTS LTD)
• FY2025 10-K: …competition, which may increase in the future. General. The casino resort and hotel industry is highly competitive. Increased competition could result in a loss of customers which may negatively affect our cash flows and results of operations. Macau Operations. We hold one of six gaming concessions authorized by the…
• FY2025 10-K: …completed or under development in the vicinity of our Las Vegas Operations, which may present increased competition in the future. Wynn Las Vegas also competes with other casino resort and hotel facilities in other cities. The proliferation of gaming activities in other areas could significantly harm our business as…
• PII (POLARIS INC.)
• FY2025 10-K: …potential effects. Market and Competitive Risks We face intense competition in all product lines. Failure to compete effectively against competitors could negatively impact our business and operating results. The markets in which we operate are highly competitive. Competition in such markets is based upon several…
• FY2025 10-K: Adjusted EBITDA, in absolute dollars and as a percentage of sales, decreased in 2025 primarily due to increased incentive compensation costs, incremental tariff charges and lower net pricing driven by higher promotional costs, partially offset by favorable operating costs. Weighted average diluted shares outstanding:…
• NWL (NEWELL BRANDS INC.)
• FY2025 10-K: …loss per share $ (0.68) $ (0.52) Net sales decreased 5% compared to the prior year. Net sales were unfavorably impacted by soft demand across all segments, primarily by our H&CS and O&R segments, net distribution losses and product line exits. These unfavorable factors were partially mitigated by launches of product…
• FY2025 10-K: …operating income, defined as net sales minus cost of products sold, segment SG&A (including share-based compensation at target for operating segment employees) and other segment costs. Segment SG&A includes an allocation of center-led corporate functions including the bonus for such corporate functions based on…
• H (H)
• (no filing in the citation store)
• PENN (PENN Entertainment, Inc.)
• FY2025 10-K: Loan A Facility") and a seven-year $ 1.0 billion term loan B facility (the "Amended Term Loan B Facility") (together, the "Amended Credit Facilities"). The proceeds from the Amended Credit Facilities were used to repay the balances of the previous credit facilities. The interest rates per annum applicable to loans…
• FY2025 10-K: …high degree of competition among a large number of participants. We compete with a variety of gaming operations, including casinos and hotel casinos of varying quality and size, and other gaming options, such as state and province-sponsored internet lotteries, sweepstakes (including sweepstakes-based OSB and online…
• NWS (NEWS CORPORATION)
• FY2025 10-K: …business continues to face increasing competition for both circulation and advertising revenue, including from a variety of alternative news and information sources, programmatic advertising buying channels and AI aggregators and other emerging technology platforms. Operating expenses for the consumer business…
• FY2025 10-K: …comparing projected revenue growth rates and EBITDA margins to historical trends, current industry and economic trends, while also considering changes in the Company's business model. We also involved our internal valuation specialists to assist in evaluating the Company's models, valuation methodology, and…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.