FirstGroup (FGROY) AI Stock Analysis

• Market Cap: $1.39B
• Dividend Yield: 3.02%
• Average Volume (3M): 0.00
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.42
• Revenue Growth: 6.42%
• EPS Growth: 46.73%
• Country: US
• Employees: 30,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 0.13
• Shares Outstanding: 562,530,800
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 1.78
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.37
• Enterprise Value/Gross Profit: 13.54
• Enterprise Value/Ebitda: 2.19
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $3.00 ▲(18.11% Upside)
• Action: Upgraded Date: 11/19/25
• Date: Action: Upgraded 11/19/25

FirstGroup's overall stock score reflects a strong financial recovery and attractive valuation, bolstered by positive earnings call insights. However, technical analysis indicates bearish momentum, which tempers the overall score. The company's strategic initiatives in sustainability and service expansion are promising, but market sentiment remains cautious.

Positive Factors

Revenue Growth & Acquisition Scale

A 30% revenue increase driven by the First Bus London acquisition signals durable scale expansion and stronger contract/fare revenues. Greater scale helps spread fixed costs, improves route density and bargaining with suppliers, supporting sustained margin and cash generation over months.

Improved Cash Generation

Consistent operational cash flow and rising free cash flow indicate the business can fund capital needs, service debt and support shareholder returns. Cash resilience reduces refinancing risk and enables reinvestment in fleet and electrification, strengthening long-term competitiveness.

Sustainability & Fleet Electrification

Advancing electrification and energy investments positions the firm for regulatory tailwinds and lower operating emissions costs. Early fleet conversion creates competitive advantage in contract bids and reduces future retrofit costs, supporting durable demand and margin stability.

Negative Factors

Elevated Leverage

Persistently high leverage, despite improvement, constrains financial flexibility and increases interest sensitivity. In a capital-intensive transport business, sustained debt levels can limit ability to invest in fleet or absorb demand shocks, raising refinancing and covenant risks.

Declining Bus Volumes

A multi-percent fall in ridership, notably commercial volumes, undermines fare revenues and route economics. If reduced commuting endures, contract renegotiations or route cuts may be needed, pressuring revenue visibility and the utilization of capital-intensive assets over months.

Cost Inflation & Labor Pressure

Sustained inflation and higher payroll taxes structurally increase operating costs in a labor-heavy business. Without offsetting fare or subsidy adjustments, margin compression can persist and force difficult trade-offs between service levels, wages and capital investment priorities.

FirstGroup Business Overview & Revenue Model

Company Description

FirstGroup plc provides public transport services in the United Kingdom and the United States. The company operates through First Bus and First Rail segments. The First Bus segment offers local bus services with a fleet of approximately 4,900 buses in the United Kingdom. The First Rail segment operates a passenger rail network that provides long-distance, commuter, regional, and sleeper services through a portfolio of Great Western Railway, South Western Railway, TransPennine Express, and Avanti West Coast franchises; passenger rail services; and hull trains and Lumos. FirstGroup plc was founded in 1986 and is based in London, the United Kingdom.

How the Company Makes Money

FirstGroup generates revenue primarily through the provision of public transport services. Its revenue streams include ticket sales from bus and rail operations, contracts with local and regional governments for transport services, and charter services for educational institutions and other organizations through First Student. In North America, Greyhound contributes to revenue through intercity bus services. The company also benefits from partnerships with governmental bodies, which often subsidize certain routes to maintain service levels in less profitable areas. Additionally, FirstGroup engages in operational efficiencies and cost management strategies to enhance profitability.

FirstGroup Financial Statement Overview

Summary

FirstGroup exhibits a commendable financial recovery with strong revenue and profit growth, improved cash flow management, and a better leverage position. While high debt levels and past profitability issues remain areas to watch, the company is on a positive trajectory with significant operational improvements over recent years.

Income Statement

FirstGroup's income statement reflects a solid performance with a strong recovery trajectory. Gross profit margin improved significantly due to increased operational efficiency, and the net profit margin turned positive, indicating a return to profitability. Revenue growth has been consistent over the years, showcasing a robust upward trend. EBIT and EBITDA margins have shown improvement, reflecting increased profitability. However, the past negative net income and EBIT in earlier years highlight the challenges faced during the pandemic.

Balance Sheet

The balance sheet demonstrates a moderate financial position. The debt-to-equity ratio has decreased, indicating improved leverage, yet it remains relatively high, which could pose a risk. Return on equity has improved, reflecting better utilization of equity capital. The equity ratio suggests a moderate level of financial stability, though there's room for improvement in reducing liabilities.

Cash Flow

FirstGroup's cash flow statement shows strong operational cash flow and impressive free cash flow growth. The operating cash flow to net income ratio is healthy, indicating effective cash generation relative to earnings. The free cash flow to net income ratio also supports solid cash flow performance. Past challenges are evident from lower free cash flow in earlier years, but recent improvements highlight a solid cash position moving forward.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	5.01B	4.65B	4.26B	3.86B	2.93B	1.74B
Gross Profit	138.17M	1.81B	1.57B	829.30M	0.00	-1.16B
EBITDA	853.97M	849.80M	656.30M	896.70M	863.60M	1.15B
Net Income	127.07M	127.50M	-15.90M	87.10M	636.40M	78.40M
Balance Sheet
Total Assets	3.36B	3.66B	3.81B	4.41B	3.83B	8.29B
Cash, Cash Equivalents and Short-Term Investments	421.00M	171.40M	496.50M	791.40M	787.70M	1.44B
Total Debt	1.27B	1.35B	1.63B	2.07B	1.41B	3.82B
Total Liabilities	2.72B	2.95B	3.17B	3.66B	2.95B	7.14B
Stockholders Equity	622.70M	696.70M	633.30M	740.20M	876.60M	1.18B
Cash Flow
Free Cash Flow	431.84M	597.80M	324.00M	395.90M	-186.20M	814.80M
Operating Cash Flow	643.33M	754.20M	543.30M	573.80M	65.40M	1.20B
Investing Cash Flow	-214.50M	-150.90M	-10.20M	79.40M	2.08B	-270.00M
Financing Cash Flow	-470.70M	-641.50M	-776.30M	-640.90M	-2.89B	-357.90M

FirstGroup Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.54
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FGROY, the sentiment is Negative. The current price of 2.54 is below the 20-day moving average (MA) of 2.58, below the 50-day MA of 2.55, and below the 200-day MA of 2.72, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 49.31 is Neutral, neither overbought nor oversold. The STOCH value of 37.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FGROY.

FirstGroup Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAB	77 Outperform	$44.22B	38.02	11.01%	0.46%	4.40%	14.60%
FGROY	72 Outperform	$1.39B	8.94	18.96%	3.02%	6.42%	46.73%
GBX	68 Neutral	$1.78B	10.01	12.54%	2.71%	-8.66%	27.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RAIL	62 Neutral	$254.90M	5.33	―	―	-6.18%	―
FSTR	57 Neutral	$322.18M	70.26	2.74%	―	-5.51%	-88.11%
TRN	56 Neutral	$2.75B	11.23	24.37%	4.34%	-33.03%	-44.18%