Freightcar America (RAIL) AI Stock Analysis

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Freightcar America

(NASDAQ:RAIL)

52Neutral

Freightcar America shows potential with strong market share gains and positive cash flow trends, reflected in the earnings call. However, significant financial risks due to high leverage and negative equity, coupled with weak valuation metrics, limit the overall attractiveness of the stock.

Freightcar America (RAIL) vs. S&P 500 (SPY)

Market Cap

$147.18M

Dividend YieldN/A

Average Volume (3M)275.70K

Price to Earnings (P/E)―

Beta (1Y)1.98

Revenue Growth12.58%

EPS Growth34.10%

CountryUS

Employees2,030

SectorIndustrials

Sector Strength91

IndustryRailroads

Share Statistics

EPS (TTM)0.05

Shares Outstanding19,040,310

10 Day Avg. Volume311,154

30 Day Avg. Volume275,700

Financial Highlights & Ratios

PEG Ratio-0.22

Price to Book (P/B)-2.04

Price to Sales (P/S)0.00

P/FCF Ratio2.50

Enterprise Value/Market Cap1.33

Enterprise Value/Revenue0.09

Enterprise Value/Gross Profit2.79

Enterprise Value/Ebitda-1.00

Forecast

1Y Price Target

$11.25

Price Target Upside45.54% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Freightcar America Business Overview & Revenue Model

Company DescriptionFreightCar America, Inc., through its subsidiaries, designs, manufactures, and sells railcars and railcar components for the transportation of bulk commodities and containerized freight products primarily in North America. It operates in two segments, Manufacturing and Parts. The company offers a range of freight cars, including open top hoppers; covered hopper cars; gondolas; triple hoppers and hybrid aluminum/stainless steel railcars; ore hopper and gondola railcars; ballast hopper cars; aggregate hopper cars; intermodal flats; and non-intermodal flat cars. It also provides railcars, including coal cars, bulk commodity cars, coil steel cars, and boxcars; and woodchip hoppers, aluminum vehicle carriers, and articulated bulk container railcars. In addition, the company sells used railcars; leases, rebuilds, and converts railcars; and sells forged, cast, and fabricated parts for various railcars. It also exports its manufactured railcars to Latin America and the Middle East. The company's customers primarily include financial institutions, railroads, and shippers. FreightCar America, Inc. was founded in 1901 and is headquartered in Chicago, Illinois.

How the Company Makes MoneyFreightcar America makes money primarily through the sale of its manufactured railcars. The company's revenue model is centered around designing and manufacturing customized railcars for its clients, which include railroads, leasing companies, and industrial shippers. A significant portion of its earnings comes from long-term contracts and orders placed by these clients. Additionally, the company may engage in leasing and refurbishing railcars, providing additional revenue streams. Freightcar America's strategic partnerships with key suppliers and adherence to industry standards also play a crucial role in maintaining its competitive edge and profitability.

Freightcar America Financial Statement Overview

Summary

Freightcar America exhibits a mixed financial performance. There is improvement in revenue and cash flow, but profitability and balance sheet stability are concerning. High leverage and negative equity pose significant risks.

Income Statement

Neutral

Freightcar America has shown some improvement in its revenue trajectory, with a significant increase from 2021 to 2024. However, the company is still struggling with profitability, as indicated by negative net profit margins and EBITDA margins over the years. The gross profit margin is improving, but the overall profitability remains weak due to high expenses. These factors contribute to a moderate income statement score.

Balance Sheet

Negative

The company has a concerning balance sheet with negative stockholders' equity, indicating potential financial instability. High debt levels relative to equity, as seen in a negative debt-to-equity ratio, pose significant leverage risks. The equity ratio is also negative, further highlighting the weak balance sheet position. These factors result in a low balance sheet score.

Cash Flow

Neutral

Freightcar America's cash flow has improved, with positive operating cash flow and free cash flow in the most recent period. The free cash flow growth is notable and a positive sign. However, the operating cash flow to net income ratio is skewed by consistently negative net income, which limits the cash flow score to a moderate level despite recent improvements.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
494.66M	559.42M	358.09M	364.75M	203.05M	108.45M
	Gross Profit
70.03M	67.04M	41.76M	25.82M	11.46M	-13.50M
	EBIT
37.30M	37.34M	10.49M	22.00K	-16.07M	-80.59M
	EBITDA
-45.77M	-57.37M	-2.45M	-4.65M	-20.93M	-67.41M
	Net Income Common Stockholders
-13.80M	-75.82M	-23.59M	-38.85M	-41.45M	-86.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
44.45M	44.45M	39.60M	37.91M	26.24M	54.05M
	Total Assets
224.22M	224.22M	259.46M	199.74M	200.66M	182.74M
	Total Debt
158.99M	158.99M	73.85M	127.26M	98.06M	85.46M
	Net Debt
114.54M	114.54M	34.25M	89.35M	71.82M	31.41M
	Total Liabilities
374.49M	374.49M	222.21M	228.32M	202.32M	152.25M
	Stockholders Equity
-150.27M	-150.27M	-46.21M	-28.58M	-1.66M	30.50M
Cash Flow		Free Cash Flow
78.67M	39.91M	-7.95M	3.69M	-57.69M	-68.75M
	Operating Cash Flow
83.05M	44.93M	4.77M	11.50M	-55.40M	-58.91M
	Investing Cash Flow
-4.38M	-5.02M	-4.37M	-7.82M	-1.68M	-6.09M
	Financing Cash Flow
-39.90M	-36.02M	2.25M	7.99M	29.27M	52.79M

Freightcar America Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.73

Price Trends

50DMA

6.08

Positive

100DMA

8.29

Negative

200DMA

8.95

Negative

Market Momentum

MACD

0.36

Negative

RSI

65.94

Neutral

STOCH

96.00

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RAIL, the sentiment is Positive. The current price of 7.73 is above the 20-day moving average (MA) of 6.47, above the 50-day MA of 6.08, and below the 200-day MA of 8.95, indicating a neutral trend. The MACD of 0.36 indicates Negative momentum. The RSI at 65.94 is Neutral, neither overbought nor oversold. The STOCH value of 96.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RAIL.

Freightcar America Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAB	79 Outperform	$35.20B	32.24	10.62%	0.41%	5.21%	24.15%
TRN	71 Outperform	$2.19B	16.53	14.14%	4.32%	-9.40%	8.41%
FSTR	70 Neutral	$204.85M	5.88	23.08%	―	-8.75%	354.10%
GBX	67 Neutral	$1.49B	7.51	14.69%	2.57%	-5.79%	82.71%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%
EVI	63 Neutral	$226.98M	36.20	4.71%	―	3.51%	33.35%
RAIL	52 Neutral	$147.18M	―	156.43%	―	12.58%	34.10%

* Industrials Sector Average

Performance Comparison

RAIL

Freightcar America

7.73

4.10

112.95%

EVI

EVI Industries

17.79

-3.39

-16.01%

GBX

Greenbrier

47.45

-2.40

-4.81%

FSTR

L. B. Foster Company

19.40

-9.52

-32.92%

TRN

Trinity Industries

26.87

-2.76

-9.31%

WAB

Westinghouse Air Brake Technologies

205.69

35.85

21.11%

Freightcar America Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: 23.68%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment with strong market share gains, financial performance, and a robust order pipeline. While there were some challenges with lower railcar production and increased SG&A expenses, the positive aspects significantly outweigh the negatives.

Q1-2025 Updates

Positive Updates

Significant Market Share Gain

FreightCar America expanded its addressable market share from 8% to 27% over the last 12 months, becoming the fastest-growing railcar manufacturer in North America.

Strong Financial Performance

Gross margin expanded to 14.9%, up 780 basis points year-over-year, nearly doubling from the same period last year. Adjusted EBITDA was $7.3 million, exceeding last year despite lower revenue and deliveries.

Robust Order Pipeline and Backlog

1,250 new railcar orders valued at approximately $141 million were booked in Q1, increasing the backlog to 3,337 railcars totaling $318 million. This provides excellent visibility well into 2025.

Consistent Cash Flow Generation

Generated $12.8 million in operating cash flow, marking the fourth consecutive quarter of positive cash flow from operations. Adjusted free cash flow improved by $43 million compared to Q1 2024.

Positive Future Outlook

Reaffirmed full-year 2025 guidance with expected deliveries of 4,500 to 4,900 railcars and revenue of $530 million to $595 million. Adjusted EBITDA is expected between $43 million and $49 million.

Negative Updates

Lower Railcar Production

Planned lower railcar production in Q1 as a portion of manufacturing capacity was dedicated to delivering large custom fabrications, resulting in fewer deliveries during the quarter.

Increased SG&A Expenses

SG&A expenses for Q1 2025 totaled $10.5 million, up from $7.5 million in Q1 2024. Excluding stock-based compensation, SG&A as a percentage of revenue increased by approximately 47 basis points.

Company Guidance

During FreightCar America's first quarter 2025 earnings call, the company reaffirmed its full-year guidance, projecting deliveries of 4,500 to 4,900 railcars and revenue between $530 million and $595 million. The adjusted EBITDA target remains between $43 million and $49 million. The first quarter saw a gross margin expansion to 14.9%, an increase of 780 basis points year-over-year, with adjusted EBITDA reaching $7.3 million. Despite lower deliveries, the company booked 1,250 new railcar orders worth approximately $141 million, driving its backlog to 3,337 railcars valued at $318 million. With a market share increase from 8% to 27% over the past 12 months, FreightCar America maintains a positive outlook, expecting industry-wide deliveries to gain momentum throughout the year.

Freightcar America Corporate Events

Business Operations and StrategyFinancial Disclosures

FreightCar America Projects Growth and Enters Tank Car Market

Positive

Mar 12, 2025

FreightCar America reported a strong financial performance for the fourth quarter and full year 2024, with a 56% increase in revenue and a 60% rise in gross profit. The company generated $45 million in operating cash flow and $22 million in adjusted free cash flow for the year. Looking ahead to 2025, FreightCar America projects sequential growth in deliveries, revenue, and adjusted EBITDA, with an expected revenue range of $530 million to $595 million and railcar deliveries between 4,500 and 4,900 units. The company has also entered the tank car space with a significant multi-year conversion order, enhancing its market position.

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.