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Greenbrier Companies (GBX)
NYSE:GBX

Greenbrier (GBX) AI Stock Analysis

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Greenbrier

(NYSE:GBX)

72Outperform
Greenbrier's strengths lie in its strong financial performance, robust balance sheet with zero debt, and attractive valuation metrics. However, challenges include negative free cash flow, a bearish technical outlook, and some uncertainty in demand. The recent earnings call and dividend increase support a positive outlook, but technical concerns limit the overall score.

Greenbrier (GBX) vs. S&P 500 (SPY)

Greenbrier Business Overview & Revenue Model

Company DescriptionThe Greenbrier Companies, Inc. designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America. It operates through three segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services. The Manufacturing segment offers conventional railcars, such as covered hopper cars, boxcars, center partition cars, and bulkhead flat cars; tank cars; double-stack intermodal railcars; auto-max and multi-max products for the transportation of light vehicles; pressurized tank cars, non-pressurized tank cars, flat cars, coil cars, gondolas, sliding wall cars, and automobile transporter cars; and marine vessels. The Wheels, Repair & Parts segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and downsizing; operates a railcar repair, refurbishment, and maintenance network; and reconditions and manufactures railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts, as well as produces roofs, doors, and associated parts for boxcars. The Leasing & Services segment offers operating leases and 'per diem' leases for a fleet of approximately 8,800 railcars; and management services comprising railcar maintenance management, railcar accounting services, fleet management and logistics, administration, and railcar remarketing. This segment owns or provides management services to a fleet of approximately 444,000 railcars for railroads, shippers, carriers, institutional investors, and other leasing and transportation companies. The company serves railroads, leasing companies, financial institutions, shippers, carriers, and transportation companies. The Greenbrier Companies, Inc. was founded in 1974 and is headquartered in Lake Oswego, Oregon.
How the Company Makes MoneyGreenbrier generates revenue primarily through the manufacturing and sale of freight railcars, which include a wide range of types such as double-stack intermodal cars, tank cars, and boxcars. A significant portion of its income also comes from providing repair and refurbishment services for railcars, which help maintain the operational efficiency of equipment for its customers. Additionally, Greenbrier earns money through its leasing and management services, whereby it leases railcars to customers and manages railcar fleets on their behalf. The company benefits from strategic partnerships and long-term contracts with major railroads, leasing companies, and industrial shippers, which ensure a steady demand for its products and services.

Greenbrier Financial Statement Overview

Summary
Greenbrier shows strong profitability and a solid balance sheet with zero debt, enhancing its stability. However, negative free cash flow due to high capital expenditures and inconsistent revenue growth pose challenges.
Income Statement
75
Positive
The income statement shows a solid gross profit margin of 15.84% and a strong net profit margin of 9.18% for TTM, indicating healthy profitability. The EBIT margin stands at 12.95% with an EBITDA margin of 16.25%, reflecting efficient operations. However, the revenue growth has been inconsistent, with a notable decline from the previous annual report, signaling potential challenges in sustaining revenue growth.
Balance Sheet
82
Very Positive
The balance sheet is robust with a debt-to-equity ratio of 0, as total debt was eliminated in the TTM period, significantly reducing financial risk. The return on equity is impressive at 17.75%, showcasing strong returns for shareholders. The equity ratio of 48.44% suggests a stable financial structure with adequate equity backing the assets.
Cash Flow
68
Positive
Cash flow analysis reveals a negative free cash flow in the TTM, primarily due to high capital expenditures. The operating cash flow to net income ratio is 1.50, indicating good cash generation from operations relative to net income. However, the negative free cash flow growth rate reflects challenges in cash flow management.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
3.61B3.54B3.94B2.98B1.75B2.79B
Gross Profit
606.30M553.50M441.10M306.00M231.61M353.13M
EBIT
353.70M306.00M176.40M43.60M40.97M168.43M
EBITDA
469.80M450.30M312.10M182.80M131.46M273.82M
Net Income Common Stockholders
184.20M160.10M62.50M46.90M32.40M84.63M
Balance SheetCash, Cash Equivalents and Short-Term Investments
67.91M368.60M281.70M543.00M646.77M833.75M
Total Assets
1.04B4.25B3.98B3.85B3.39B3.17B
Total Debt
544.46M1.82B1.61B1.57B1.20B1.16B
Net Debt
476.55M1.47B1.33B1.02B551.91M321.87M
Total Liabilities
813.95M2.68B2.51B2.39B1.88B1.67B
Stockholders Equity
219.48M1.38B1.25B1.28B1.31B1.29B
Cash FlowFree Cash Flow
-78.00M-68.70M-290.90M-531.10M-179.54M205.38M
Operating Cash Flow
376.60M329.60M71.20M-150.40M-40.52M272.26M
Investing Cash Flow
-309.10M-320.40M-280.00M-224.00M-117.76M27.48M
Financing Cash Flow
18.80M86.20M-76.20M244.90M-22.74M216.46M

Greenbrier Technical Analysis

Technical Analysis Sentiment
Negative
Last Price45.61
Price Trends
50DMA
57.50
Negative
100DMA
61.26
Negative
200DMA
55.33
Negative
Market Momentum
MACD
-1.67
Positive
RSI
30.06
Neutral
STOCH
20.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GBX, the sentiment is Negative. The current price of 45.61 is below the 20-day moving average (MA) of 52.96, below the 50-day MA of 57.50, and below the 200-day MA of 55.33, indicating a bearish trend. The MACD of -1.67 indicates Positive momentum. The RSI at 30.06 is Neutral, neither overbought nor oversold. The STOCH value of 20.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GBX.

Greenbrier Risk Analysis

Greenbrier disclosed 47 risk factors in its most recent earnings report. Greenbrier 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

Greenbrier Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
UNUNP
78
Outperform
$127.81B19.2442.60%2.49%0.54%6.06%
RBRBC
73
Outperform
$9.71B42.378.35%4.62%21.58%
GBGBX
72
Outperform
$1.43B7.8913.71%2.63%-9.47%69.11%
TRTRN
70
Neutral
$2.05B15.2614.57%4.54%3.21%29.59%
WAWAB
69
Neutral
$27.50B26.6410.26%0.53%7.34%32.91%
62
Neutral
$7.25B12.393.08%3.39%3.63%-14.32%
47
Neutral
$88.43M156.43%55.84%-159.47%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GBX
Greenbrier
45.61
-7.29
-13.78%
RAIL
Freightcar America
4.64
0.77
19.90%
RBC
RBC Bearings
308.82
39.28
14.57%
TRN
Trinity Industries
25.09
-1.79
-6.66%
UNP
Union Pacific
213.26
-21.75
-9.25%
WAB
Westinghouse Air Brake Technologies
160.95
12.20
8.20%

Greenbrier Earnings Call Summary

Earnings Call Date: Jan 8, 2025 | % Change Since: -24.20% | Next Earnings Date: Apr 7, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong first-quarter performance with record revenue and significant margin improvements. Despite a decrease in backlog and some uncertainty in future demand, the company remains optimistic due to a strong sales pipeline and robust lease renewal rates. The overall sentiment is positive, with management emphasizing strategic initiatives and efficiency improvements.
Highlights
Record-Breaking Revenue
Revenue in Q1 was $876 million, marking a new first-quarter record for Greenbrier.
Strong Margin Performance
Q1 EBITDA was $145 million with an aggregate gross margin of 19.8%, showing a 480 basis points year-over-year improvement.
Increased Leasing Performance
Greenbrier's lease fleet grew by 1,200 units with stable fleet utilization of 99%. Lease renewal rates continued to grow at double digits.
Strong Backlog and Order Activity
Global orders of 3,800 units worth $520 million were secured in Q1, with a backlog of 23,400 units valued at $3 billion.
Improvement in Return on Invested Capital
ROIC was 11.2%, marking a 140 basis point sequential increase.
Lowlights
Backlog Decline
Backlog decreased from $3.8 billion to $3 billion, although it is still considered strong.
Uncertain Demand Outlook
There is some uncertainty and potential softening in demand for certain railcar types and markets.
Higher Tax Rate
The quarterly tax rate increased to 37.8% due to geographic mix and unfavorable foreign currency exchange rates.
Company Guidance
During the Greenbrier Companies' Q1 2025 earnings call, the guidance for fiscal 2025 was reaffirmed, with the company projecting steady production rates and emphasizing its resilience across market conditions. In the first quarter, Greenbrier reported an EBITDA of $145 million and a gross margin of 19.8%, marking a 480 basis points improvement year-over-year, attributed to enhanced manufacturing efficiencies and favorable product mix. The company delivered 6,000 new railcars, maintained a strong lease fleet utilization of approximately 99%, and secured global orders for 3,800 units valued at $520 million. Despite a backlog of 23,400 units valued at $3 billion, Greenbrier remains optimistic about meeting its guidance, supported by a constructive demand outlook and strategic initiatives aimed at enhancing manufacturing productivity and operational efficiency. The company's liquidity position is robust at $549 million, with plans for disciplined capital allocation to drive long-term shareholder value.

Greenbrier Corporate Events

DividendsBusiness Operations and Strategy
Greenbrier Increases Quarterly Dividend by 7%
Positive
Apr 3, 2025

On April 3, 2025, Greenbrier announced a 7% increase in its quarterly cash dividend, raising it to $0.32 per share, payable on May 13, 2025, to stockholders of record as of April 22, 2025. This marks the company’s 44th consecutive quarterly dividend and reflects the strength of its long-term business strategy and commitment to returning capital to shareholders.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.