Construcciones y Auxiliar de Ferrocarriles (CAF) AI Stock Analysis

• Market Cap: €2.11B
• Dividend Yield: 2.28%
• Average Volume (3M): 33.90K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.67
• Revenue Growth: 6.84%
• EPS Growth: 16.03%
• Country: ES
• Employees: 16,333
• Sector: General
• Sector Strength: N/A
• Industry: Railroads
• EPS (TTM): 2.14
• Shares Outstanding: 34,280,750
• 10 Day Avg. Volume: 26,573
• 30 Day Avg. Volume: 33,901
• PEG Ratio: 0.33
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 0.45
• P/FCF Ratio: 41.48
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €59.20
• Price Target Upside: -3.90% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 5.33
• Revenue Forecast (FY): €4.85B

• Rating: 76 Outperform
• Price Target: €66.00 ▲(7.14% Upside)
• Action: Upgraded Date: 12/20/25
• Date: Action: Upgraded 12/20/25

Construcciones y Auxiliar de Ferrocarriles is performing well financially, with strong revenue growth and improving profit margins. The technical indicators show positive momentum, although the RSI suggests caution as it approaches overbought levels. Valuation metrics indicate the stock is fairly valued with a reasonable P/E ratio and a decent dividend yield. These factors collectively contribute to a solid overall stock score.

Positive Factors

Diversified business model & recurring services

CAF's combination of rolling-stock sales, signalling/telecom systems and long-term maintenance contracts creates recurring revenue and deeper client relationships. This integrated model smooths revenues across cycles and supports higher lifetime margins from after-sales and service agreements.

Improving leverage and balance-sheet resilience

A material decline in debt-to-equity over the cycle and equity accretion strengthen financial resilience. Lower leverage improves capacity to fund new contracts, absorb project timing shifts and invest in product development without immediate refinancing stress.

Rising profitability and earnings quality

Improving margins and higher net income versus earlier years indicate better operational execution and pricing discipline. Sustained margin expansion supports durability of cash generation over the medium term if maintained across project cycles and service segments.

Negative Factors

Material 2025 revenue contraction

A sharp revenue drop of this magnitude reflects weaker order flows or project timing and signals revenue volatility in a capital-intensive business. Persistent or recurring top-line contractions would pressure margins, backlog utilization and long-term investment plans.

Weak and volatile free cash flow conversion

A big decline in free cash flow and low conversion of net income to FCF point to working-capital or capex pressure. For an equipment and services exporter, fragile cash conversion raises financing needs, constrains dividend or buyback optionality and increases funding risk.

Residual meaningful leverage

Although leverage improved, debt near parity with equity still limits financial flexibility. In downturns or when bid financing is required for large contracts, meaningful leverage increases refinancing and covenant risk and can constrain strategic capital allocation.

Construcciones y Auxiliar de Ferrocarriles Business Overview & Revenue Model

Company Description

Construcciones y Auxiliar de Ferrocarriles, S.A. designs, manufactures, and sells rolling stock and rail components worldwide. It offers high speed trains, regional trains, commuter trains, metros, LRV's and tram-trains, trams and light metros, and locomotives, as well as electric and hydrogen buses. The company also provides equipment and components, such as wheel sets, wheels, axles, and gear units, as well as after-sales services, including technological advice and inspection guidelines; and traction systems and converters, energy storage systems, and control and communication systems, as well as financing solutions. In addition, it designs, manufactures, supplies, and maintains railway signaling systems. Further, the company is involved in the provision of maintenance, and refurbishment and upgrading services; data compilation, storage, and processing and analysis services; management of spare parts and workshop equipment; and technical support and consultancy. Additionally, it develops turnkey solutions that cover a range of activities, such as viability studies, civil works, electrification and signaling, maintenance, and the operation of the system. The company was formerly known as Compañía Auxiliar de Ferrocarriles S.A. and changed its name to Construcciones y Auxiliar de Ferrocarriles, S.A. in 1971. Construcciones y Auxiliar de Ferrocarriles, S.A. was incorporated in 1917 and is headquartered in Beasain, Spain.

How the Company Makes Money

CAF generates revenue primarily through the sale of trains and rail vehicles, including passenger trains, metros, and trams, which are customized to meet the specific needs of clients around the world. The company also earns income from long-term maintenance contracts and after-sales services, ensuring the operational efficiency and safety of their products throughout their lifecycle. Key revenue streams include government contracts and public-private partnerships for railway infrastructure projects, where CAF collaborates with various national and local governments. Additionally, strategic alliances and partnerships with other technology firms enhance their service offerings, contributing to revenue through innovative solutions in rail transport.

Construcciones y Auxiliar de Ferrocarriles Financial Statement Overview

Summary

Construcciones y Auxiliar de Ferrocarriles demonstrates solid financial health with strong revenue growth and improving profit margins. The balance sheet remains robust with a balanced debt-to-equity ratio and improving ROE. Cash flow performance is commendable, with significant free cash flow growth, underscoring efficient financial management. Overall, the company is on a positive trajectory, with strengths in profitability and cash flow generation, while maintaining stable leverage.

Income Statement

The company shows strong revenue growth with a 10.1% increase from 2023 to 2024, indicating a positive trajectory. Gross profit margin is stable at 17.5%, and the net profit margin improved to 2.5% in 2024, showing enhanced profitability. EBIT and EBITDA margins are also healthy, at 5.1% and 8.0% respectively, reflecting efficient cost management.

Balance Sheet

The debt-to-equity ratio is moderate at 0.93, indicating a balanced approach to leveraging. Return on equity (ROE) improved to 11.7%, reflecting better utilization of equity to generate profits. The equity ratio is 16.9%, which suggests a modest reliance on equity financing. Overall, the balance sheet shows stability with manageable debt levels.

Cash Flow

Operating cash flow to net income ratio is strong, indicating effective cash conversion. Free cash flow saw significant growth of 263% from 2023 to 2024, highlighting improved cash generation capabilities. The company's cash flow management supports its operational and financial health.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.49B	4.21B	3.83B	3.17B	2.94B
Gross Profit	851.60M	738.48M	631.67M	540.82M	553.59M
EBITDA	330.20M	338.73M	313.90M	249.05M	256.94M
Net Income	146.26M	103.25M	89.16M	52.19M	85.92M
Balance Sheet
Total Assets	5.53B	5.22B	5.05B	4.91B	4.27B
Cash, Cash Equivalents and Short-Term Investments	626.31M	598.73M	568.24M	611.33M	682.74M
Total Debt	945.85M	910.20M	900.68M	957.77M	1.01B
Total Liabilities	4.55B	4.32B	4.18B	4.13B	3.53B
Stockholders Equity	980.54M	882.19M	855.24M	775.92M	726.66M
Cash Flow
Free Cash Flow	48.63M	98.77M	27.19M	33.42M	108.96M
Operating Cash Flow	162.25M	184.83M	106.13M	110.97M	153.55M
Investing Cash Flow	-23.30M	97.71M	40.64M	27.60M	-61.23M
Financing Cash Flow	-107.90M	-130.32M	-177.69M	-220.75M	-127.10M

Construcciones y Auxiliar de Ferrocarriles Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 61.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:CAF, the sentiment is Positive. The current price of 61.6 is above the 20-day moving average (MA) of 59.34, above the 50-day MA of 58.82, and above the 200-day MA of 53.20, indicating a bullish trend. The MACD of 0.76 indicates Negative momentum. The RSI at 62.43 is Neutral, neither overbought nor oversold. The STOCH value of 46.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:CAF.

Construcciones y Auxiliar de Ferrocarriles Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAF	76 Outperform	€2.11B	13.84	14.10%	2.28%	6.84%	16.03%
FCC	70 Outperform	€5.32B	23.56	5.28%	4.49%	5.00%	-64.19%
FER	69 Neutral	€44.70B	51.12	69.30%	1.42%	5.75%	346.20%
ACS	65 Neutral	€28.56B	29.69	19.75%	2.38%	25.47%	7.63%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
OHLA	48 Neutral	€591.68M	-285.33	-6.41%	―	1.39%	72.34%
TLGO	48 Neutral	€366.33M	-3.46	-92.71%	―	-16.41%	-952.46%