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Freightcar America (RAIL)
NASDAQ:RAIL
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Freightcar America (RAIL) AI Stock Analysis

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RAIL

Freightcar America

(NASDAQ:RAIL)

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Neutral 44 (OpenAI - 4o)
Rating:44Neutral
Price Target:
$8.50
▼(-10.43% Downside)
Freightcar America's overall stock score reflects significant financial challenges and a bearish technical outlook. While the earnings call provided some positive insights, the company's negative profitability and valuation concerns weigh heavily on its score. Strategic investments and order growth offer potential upside, but financial stability remains a critical issue.

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

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 generates revenue primarily through the manufacturing and sale of freight cars, which are crucial for transporting goods across the rail network. The company earns money by receiving orders from railroads and leasing companies, as well as through the sale of railcar parts and services for maintenance. Key revenue streams include direct sales of new railcars, lease agreements with clients, and aftermarket services, which encompass repairs and upgrades. Strategic partnerships with major rail operators and leasing companies also bolster its revenue, as these relationships can lead to long-term contracts and consistent demand for its products.

Freightcar America Earnings Call Summary

Earnings Call Date:Aug 04, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Neutral
FreightCar America demonstrated strong performance with expanded gross margins, increased orders, and positive cash flow. However, challenges such as declining revenue, increased SG&A expenses, and a softer demand environment due to industry uncertainties were notable. Despite these challenges, the company remains optimistic about its strategic investments and future growth opportunities.
Q2-2025 Updates
Positive Updates
Expansion of Gross Margins
Gross margins for the quarter expanded to 15% on 939 deliveries, up from 12.5% on 1,159 deliveries a year ago.
Increase in Orders and Backlog
FreightCar America secured 1,226 new orders in the quarter, increasing the backlog to 3,624 units, up approximately 300 units from the prior quarter.
Positive Operating Cash Flow
The company marked its fifth consecutive quarter of positive operating cash flow, finishing Q2 with over $61 million of cash on hand.
Investment in Tank Car Retrofit Program
FreightCar America announced a capital investment in the tank car retrofit program, positioning for future growth and margin enhancement.
Strong Aftermarket Sales Growth
Aftermarket sales increased almost 61% year-over-year, showing growth in the company's aftermarket presence.
Negative Updates
Revenue and Deliveries Decline
Consolidated revenues for the second quarter of 2025 totaled $118.6 million with deliveries of 939 railcars, compared to $147.4 million on deliveries of 1,159 railcars in the second quarter of 2024.
Increased SG&A Expenses
SG&A for the second quarter of 2025 totaled $10.1 million, up from $8.5 million in the second quarter of 2024, with SG&A as a percentage of revenue increasing approximately 260 basis points.
Industry Challenges Affecting Demand
Industry forecast for new railcar deliveries have been revised downward for 2025, with uncertainties around tariff policies affecting customer order timing.
Company Guidance
During the FreightCar America Second Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance highlights. FreightCar America reported a gross margin expansion to 15%, up from 12.5% the previous year, on deliveries of 939 railcars. The company achieved adjusted EBITDA margins with a 20 basis point increase compared to the prior year, generating adjusted free cash flow of $7.9 million. Although revenues and deliveries were lower year-over-year, the company maintained strong commercial momentum, securing 1,226 new orders valued at $107 million, and increasing its backlog by approximately 300 units to 3,624 units. The firm also emphasized its strategic investment in a tank car retrofit program, expected to contribute an additional $6 million in EBITDA over the next two years. FreightCar America reaffirmed its outlook for the remainder of the year, citing strong order momentum and operational flexibility.

Freightcar America Financial Statement Overview

Summary
Freightcar America is facing significant financial challenges, with declining revenues, negative profitability, and high leverage. Improvements in gross margins are noted, but the company needs to address its financial instability and cash flow issues to ensure long-term sustainability.
Income Statement
45
Neutral
Freightcar America shows a mixed performance in its income statement. The TTM data indicates a decline in revenue growth rate by 5.82%, and the net profit margin is negative at -2.21%, reflecting ongoing profitability challenges. However, the gross profit margin has improved to 14.90% from previous periods, indicating better cost management. The EBIT margin is also negative, suggesting operational inefficiencies. Overall, the company is struggling with profitability, but there are signs of improvement in gross margins.
Balance Sheet
30
Negative
The balance sheet reveals significant financial instability, with a negative stockholders' equity and a debt-to-equity ratio of -0.57 in the TTM period, indicating high leverage and financial risk. The return on equity is positive at 10.21%, which is unusual given the negative equity, suggesting volatility in financial performance. The company needs to address its leverage to improve financial health.
Cash Flow
40
Negative
Cash flow analysis shows a decline in free cash flow growth by 59.28% in the TTM period, indicating cash generation challenges. The operating cash flow to net income ratio is 0.28, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is 0.90, indicating that the company is generating cash relative to its net losses. Overall, cash flow management needs improvement to support operations and reduce financial strain.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue465.86M559.42M358.09M364.75M203.05M108.45M
Gross Profit69.42M67.04M41.76M25.82M11.46M-13.50M
EBITDA-92.15M-57.37M-2.45M-4.65M-20.93M-67.41M
Net Income-10.30M-75.82M-23.59M-38.85M-41.45M-86.10M
Balance Sheet
Total Assets328.09M224.22M259.46M199.74M200.66M182.74M
Cash, Cash Equivalents and Short-Term Investments61.35M44.45M39.60M37.91M26.24M54.05M
Total Debt152.30M158.99M73.85M127.26M98.06M85.46M
Total Liabilities411.56M374.49M222.21M228.32M202.32M152.25M
Stockholders Equity-83.46M-150.27M-46.21M-28.58M-1.66M30.50M
Cash Flow
Free Cash Flow32.03M39.91M-7.95M3.69M-57.69M-68.75M
Operating Cash Flow35.72M44.93M4.77M11.50M-55.40M-58.91M
Investing Cash Flow-3.10M-5.02M-4.37M-7.82M-1.68M-6.09M
Financing Cash Flow-10.63M-36.02M2.25M7.99M29.27M52.79M

Freightcar America Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.49
Price Trends
50DMA
9.29
Positive
100DMA
8.90
Positive
200DMA
8.71
Positive
Market Momentum
MACD
0.16
Negative
RSI
59.25
Neutral
STOCH
54.16
Neutral
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 9.49 is above the 20-day moving average (MA) of 8.81, above the 50-day MA of 9.29, and above the 200-day MA of 8.71, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 59.25 is Neutral, neither overbought nor oversold. The STOCH value of 54.16 is Neutral, 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
291.86M8.3220.89%-7.03%397.79%
74
Outperform
33.62B29.0310.67%0.48%3.38%17.21%
69
Neutral
1.43B6.3715.22%2.68%0.71%84.57%
66
Neutral
404.30M64.715.23%10.26%29.40%
64
Neutral
2.27B24.199.56%4.21%-22.95%-40.67%
44
Neutral
$181.52M156.43%-6.00%-12.45%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RAIL
Freightcar America
9.49
-0.26
-2.67%
EVI
EVI Industries
31.68
12.26
63.13%
GBX
Greenbrier
46.22
-2.66
-5.44%
FSTR
L. B. Foster Company
27.54
7.40
36.74%
TRN
Trinity Industries
28.04
-5.03
-15.21%
WAB
Westinghouse Air Brake Technologies
196.67
15.28
8.42%

Freightcar America Corporate Events

Business Operations and Strategy
FreightCar America Declares Stockholder Rights Plan
Neutral
Sep 8, 2025

On September 2, 2025, FreightCar America’s Board of Directors declared a dividend of one preferred share purchase right for each outstanding share of common stock, effective September 8, 2025. This move is part of a stockholder rights plan designed to protect the company from hostile takeovers by imposing penalties on any entity acquiring 15% or more of the company without board approval. The plan aims to ensure fair treatment of all stockholders and safeguard the company’s long-term value, while allowing the board to consider offers that align with stockholders’ best interests.

The most recent analyst rating on (RAIL) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on Freightcar America stock, see the RAIL Stock Forecast page.

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: Sep 16, 2025