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L. B. Foster Company (FSTR)
NASDAQ:FSTR
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L. B. Foster Company (FSTR) AI Stock Analysis

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FSTR

L. B. Foster Company

(NASDAQ:FSTR)

Rating:76Outperform
Price Target:
$28.00
▲(3.02% Upside)
L. B. Foster Company demonstrates strong financial recovery and positive technical indicators, supported by strategic corporate actions. The stock's undervaluation and optimistic earnings outlook further enhance its attractiveness, despite some challenges in specific segments.

L. B. Foster Company (FSTR) vs. SPDR S&P 500 ETF (SPY)

L. B. Foster Company Business Overview & Revenue Model

Company DescriptionL. B. Foster Company (FSTR) is a leading provider of products and services for the rail and construction sectors. The company specializes in the manufacture and supply of engineered products, including rail and transit products, precast concrete, and construction materials. With a focus on enhancing infrastructure and transportation systems, L. B. Foster also offers services such as project management and technical support, catering to both domestic and international markets.
How the Company Makes MoneyL. B. Foster Company generates revenue through multiple streams, primarily by selling its engineered products to the rail and construction industries. Key revenue sources include the sale of rail products such as rail ties, trackwork, and signaling systems, as well as precast concrete solutions for various construction applications. Additionally, the company earns income from service contracts related to project management and technical support. Strategic partnerships with major construction and rail industry players further bolster its revenue, allowing for larger project completions and consistent demand for its specialized products. Overall, L. B. Foster's diversified product offerings and strong industry relationships are critical to its financial success.

L. B. Foster Company Earnings Call Summary

Earnings Call Date:Aug 11, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced view, with strong performance in the Infrastructure segment and improvements in profitability, offset by challenges in the Rail segment and the U.K. market. The company is optimistic about the second half of the year due to strong backlog and order growth.
Q2-2025 Updates
Positive Updates
Return to Sales Growth
L.B. Foster returned to sales growth with revenues up 2% year-over-year, primarily due to a 22.4% increase in the Infrastructure segment, led by a 36% rise in Precast Concrete sales.
Significant Increase in Adjusted EBITDA
Adjusted EBITDA increased by 51.4% compared to last year, driven by favorable margins in the Infrastructure segment and reduced SG&A costs.
Decrease in Net Debt
Net debt decreased to $77.4 million, with gross leverage improving to 2.2x from 2.7x last year.
Strong Backlog and Order Growth
The order rates drove a solid increase in the backlog for both segments with a 42.5% increase in Rail backlog and a 13.7% increase in Infrastructure orders.
Successful Amendment of Credit Facility
L.B. Foster successfully negotiated an amendment to its revolving credit facility, increasing borrowing capacity, extending tenure to 2030, and reducing borrowing costs.
Negative Updates
Decline in Rail Revenues
Rail revenues were down 11.2% due to delayed order development and reduced activities in the U.K., with Rail Products sales declining 15.5%.
Challenges in U.K. Market
The U.K. market demand remains challenged, with efforts underway to rightsize the business to improve demand economic return profiles.
Lower Year-to-Date Sales
Year-to-date net sales were down 9% due to weaker demand in the Rail segment, particularly in Rail Distribution and the U.K.
Impact of U.K. Exit on Gross Profit
Reported Q2 gross profit included a $1.1 million charge related to exiting an Automation and Material Handling product line in the U.K.
Company Guidance
During the L.B. Foster Second Quarter 2025 Earnings Call, the company reported a 2% increase in revenues compared to the previous year, with notable growth in the Infrastructure segment, which saw a 22.4% increase, driven by a 36% rise in the Precast Concrete business. Although Rail revenues decreased by 11.2%, Friction Management sales within Rail grew by 17.2%, and Rail's backlog increased by 42.5%, indicating strong future demand. The company also achieved a 51.4% increase in adjusted EBITDA and reduced net debt to $77.4 million, improving gross leverage to 2.2x. For the second half of 2025, L.B. Foster anticipates a 14.3% sales growth and a 42.8% increase in adjusted EBITDA, supported by a solid order book and lower operating costs, with an expected free cash flow yield of approximately 8% for the full year.

L. B. Foster Company Financial Statement Overview

Summary
L. B. Foster Company shows a strong financial recovery with significant revenue growth and improved cash flow generation. The reduction in leverage and improved profitability metrics indicate a positive trajectory, though operational efficiency and past leverage levels need monitoring.
Income Statement
72
Positive
The income statement shows a strong recovery with a significant revenue growth rate of 54.8% in the TTM period. Gross profit margin and net profit margin have improved, indicating better cost management and profitability. However, EBIT and EBITDA margins are relatively low, suggesting room for operational efficiency improvements.
Balance Sheet
68
Positive
The balance sheet reflects a healthy debt-to-equity ratio of 0.11 in the TTM period, showing a significant reduction in leverage. Return on equity is strong at 20.66%, indicating effective use of equity to generate profits. The equity ratio is stable, suggesting a balanced capital structure. However, past periods showed higher leverage, which could pose risks if not managed well.
Cash Flow
75
Positive
Cash flow analysis reveals a robust free cash flow growth of 241.19% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio is also strong, highlighting effective cash management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue507.00M530.76M543.74M497.50M513.62M497.41M
Gross Profit112.67M118.06M112.81M89.61M86.30M95.01M
EBITDA29.35M34.82M22.94M9.21M20.48M31.03M
Net Income36.44M42.95M1.46M-45.56M3.63M7.58M
Balance Sheet
Total Assets349.93M334.55M312.40M365.31M342.60M370.39M
Cash, Cash Equivalents and Short-Term Investments4.19M2.45M2.56M2.88M10.37M7.56M
Total Debt101.41M61.65M67.14M106.04M43.53M58.54M
Total Liabilities174.68M155.54M169.57M227.71M158.99M193.56M
Stockholders Equity174.44M178.32M142.11M137.18M183.09M176.83M
Cash Flow
Free Cash Flow23.02M12.84M32.44M-18.21M-5.68M7.74M
Operating Cash Flow33.30M22.63M37.38M-10.58M-1.06M16.92M
Investing Cash Flow-10.63M-6.31M2.49M-56.42M17.82M-8.04M
Financing Cash Flow-22.58M-16.23M-39.30M60.24M-13.90M-15.30M

L. B. Foster Company Technical Analysis

Technical Analysis Sentiment
Positive
Last Price27.18
Price Trends
50DMA
23.64
Positive
100DMA
21.54
Positive
200DMA
23.50
Positive
Market Momentum
MACD
0.96
Negative
RSI
66.54
Neutral
STOCH
86.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSTR, the sentiment is Positive. The current price of 27.18 is above the 20-day moving average (MA) of 24.15, above the 50-day MA of 23.64, and above the 200-day MA of 23.50, indicating a bullish trend. The MACD of 0.96 indicates Negative momentum. The RSI at 66.54 is Neutral, neither overbought nor oversold. The STOCH value of 86.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSTR.

L. B. Foster Company Risk Analysis

L. B. Foster Company disclosed 27 risk factors in its most recent earnings report. L. B. Foster Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

L. B. Foster Company Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$271.09M7.9522.67%-7.03%397.79%
71
Outperform
$32.93B28.7510.84%0.50%3.38%17.21%
70
Neutral
$1.43B6.5216.16%2.71%0.71%84.57%
67
Neutral
$349.46M55.694.71%3.51%33.35%
64
Neutral
$10.73B15.657.61%2.01%2.80%-14.92%
64
Neutral
$2.30B24.7510.47%4.23%-22.95%-40.67%
44
Neutral
$160.48M156.43%-6.00%-12.45%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FSTR
L. B. Foster Company
27.18
8.68
46.92%
EVI
EVI Industries
27.93
12.45
80.43%
RAIL
Freightcar America
8.37
0.13
1.58%
GBX
Greenbrier
47.02
2.18
4.86%
TRN
Trinity Industries
28.59
-1.29
-4.32%
WAB
Westinghouse Air Brake Technologies
193.78
33.69
21.04%

L. B. Foster Company Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
L.B. Foster Expands Credit Agreement to $150 Million
Positive
Jun 30, 2025

On June 27, 2025, L.B. Foster Company entered into a Fifth Amended and Restated Credit Agreement with several banks, expanding its borrowing capacity from $130 million to $150 million and extending the maturity date to June 27, 2030. This agreement, which includes improved pricing and more flexible covenants, is designed to support the company’s strategic growth in its core platforms of Rail Technologies and Precast Concrete, enhancing its ability to invest in growth programs and corporate finance initiatives.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 23, 2025