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Freightcar America (RAIL)
NASDAQ:RAIL
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Freightcar America
(NASDAQ:RAIL)
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Rating:62Neutral
Price Target:
$12.00
▲(25.26% Upside)
Action:ReiteratedDate:12/26/25
Overall score reflects significant balance-sheet risk (negative equity) despite improving operating performance and positive operating cash flow. Technicals are strong but overbought, valuation looks inexpensive on a low P/E, and the latest earnings call was constructive with record EBITDA and reaffirmed profitability guidance tempered by softer industry demand and lower revenue range due to mix.
Positive Factors
Revenue Growth
Significant revenue growth indicates strong market demand and effective sales strategies, positioning the company well for future expansion.
Operational Efficiency
Enhanced operational efficiency supports sustainable margin improvement and competitive advantage, driving long-term profitability.
Strategic Acquisition
The acquisition expands product offerings and improves supply chain efficiency, enhancing customer satisfaction and market position.
Negative Factors
Balance Sheet Risk
Negative equity poses financial instability, limiting growth opportunities and increasing vulnerability to economic downturns.
Industry Demand Challenges
Persistent low industry demand may constrain revenue growth and limit the company's ability to capitalize on market opportunities.
Revenue Guidance Adjustment
Lower revenue guidance reflects challenges in product mix and pricing, potentially impacting future profitability and growth prospects.
Freightcar America (RAIL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$273.40M
Dividend YieldN/A
Average Volume (3M)126.33K
Price to Earnings (P/E)5.9
Beta (1Y)2.44
Revenue Growth-6.18%
EPS GrowthN/A
CountryUS
Employees2,030
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)0.24
Shares Outstanding19,079,105
10 Day Avg. Volume120,166
30 Day Avg. Volume126,333
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)-1.83
Price to Sales (P/S)0.49
P/FCF Ratio6.90
Enterprise Value/Market Cap0.55
Enterprise Value/Revenue0.30
Enterprise Value/Gross Profit1.96
Enterprise Value/Ebitda5.82
Forecast
1Y Price Target
$18.00Price Target Upside87.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.77
Revenue Forecast (FY)$619.35M
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 sale of railcars and leasing services. The manufacturing segment earns income by producing new railcars tailored to customer specifications, with contracts typically tied to volume and pricing agreements that can fluctuate based on market demand. The railcar leasing segment provides a steady revenue stream by leasing railcars to customers for specified periods, which includes maintenance and management services. Key revenue drivers include strong relationships with major rail operators and freight companies, and the company's ability to adapt to market trends, such as increasing demand for environmentally friendly railcar designs. Additionally, strategic partnerships with suppliers and industry stakeholders enhance its competitive advantage and revenue potential.
Freightcar America Earnings Call Summary
Earnings Call Date:Nov 10, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 09, 2026
Earnings Call Sentiment Positive
FreightCar America demonstrated strong operational performance with significant revenue growth and record adjusted EBITDA. The company effectively managed challenges in the broader railcar industry, maintaining a healthy backlog and achieving market share growth. However, there are still industry demand challenges and a revenue guidance adjustment that reflect current market conditions.Q3-2025 Updates
Positive Updates
Significant Revenue Growth
FreightCar America achieved a revenue growth of over 42% in the third quarter of 2025 compared to the previous year.
Record Adjusted EBITDA
The company reported a record adjusted EBITDA of $17 million, a 56% increase from the prior year, marking the most profitable quarter since relocating production to Mexico.
Improvement in Margins
Gross margin increased to 15.1%, and adjusted EBITDA margin rose to 10.6%, representing an improvement of 80 basis points and 100 basis points, respectively, from the previous year.
Healthy Backlog and Market Position
The company maintained a healthy backlog of 2,750 units valued at approximately $222 million, achieving over 20% of the addressable market order share for new car orders.
Operational Efficiency and Initiatives
Operational improvements in safety, quality, throughput, and cost structure at the Castanos facility contributed to record EBITDA performance. Initiatives like TrueTrack digital integration and enhancements to plant layout aim to improve flow, productivity, and margins.
Negative Updates
Industry Demand Challenges
The broader railcar industry continues to operate below long-term replacement levels, with total deliveries expected to remain under 30,000 railcars for the year, well below the normalized rate of approximately 40,000 units.
Revenue Guidance Adjustment
While maintaining adjusted EBITDA and unit count guidance, the company adjusted its revenue range down to $500 to $530 million due to a higher proportion of conversions, which have a lower average selling price.
Non-Cash Charge Impact
A reported net loss of $7.4 million included a $17.6 million non-cash charge related to the change in warrant liability, impacting reported net income despite operational performance improvements.
Company Guidance
During the call, FreightCar America provided guidance that highlights their strong performance in the third quarter of 2025. The company reported a 42% increase in revenue, with gross margins expanding to 15.1%. They achieved a record adjusted EBITDA of $17 million, marking their most profitable quarter since relocating production to Mexico. The company's backlog stands at 2,750 units valued at approximately $222 million. Despite industry-wide order activity being below long-term replacement levels, FreightCar America maintained a 20% market share of addressable market orders for new railcars. The company reaffirmed its full-year adjusted EBITDA guidance and railcar delivery targets, while adjusting its revenue range to $500 to $530 million, reflecting a change in product mix. Looking ahead, FreightCar America aims to generate positive free cash flow and maintain strong margins, while strategically positioning itself for growth through initiatives like their TrueTrack process and tank car conversion readiness.Freightcar America Financial Statement Overview
Summary
Income statement shows a recovery (10.14% TTM revenue growth and improved gross margin to 15.09%), but the balance sheet is a major risk with negative stockholders' equity and negative ROE. Cash flow is mixed: operating cash flow is positive ($30.62M TTM) while free cash flow declined 15% TTM and cash conversion versus net income is weak (0.23).Income Statement
Freightcar America shows a positive revenue growth rate of 10.14% TTM, indicating a recovery trend. The gross profit margin improved to 15.09% TTM from 11.98% in the previous year, reflecting better cost management. However, the net profit margin is volatile, with a significant improvement to 17.40% TTM from negative margins in previous years. The EBIT and EBITDA margins are still relatively low, suggesting room for operational efficiency improvements.65
Positive
Balance Sheet
The company has a negative stockholders' equity, leading to a negative debt-to-equity ratio, which is a significant risk factor. The return on equity is negative TTM, indicating inefficiencies in generating returns from equity. The equity ratio is not directly calculable due to negative equity, highlighting financial instability.40
Negative
Cash Flow
Operating cash flow is positive at $30.62 million TTM, but free cash flow has decreased by 15% TTM, indicating potential cash management issues. The operating cash flow to net income ratio is low at 0.23, suggesting that net income is not fully translating into cash flow. However, the free cash flow to net income ratio is relatively strong at 0.89, indicating some efficiency in converting earnings into cash.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 513.12M | 559.42M | 358.09M | 364.75M | 203.05M | 108.45M |
| Gross Profit | 77.43M | 67.04M | 41.76M | 25.82M | 11.46M | -13.50M |
| EBITDA | 26.05M | 39.51M | 18.14M | -5.82M | -11.00M | -33.67M |
| Net Income | 89.31M | -75.82M | -23.59M | -38.85M | -41.45M | -84.44M |
Balance Sheet | ||||||
| Total Assets | 340.76M | 224.22M | 259.46M | 199.74M | 200.66M | 182.74M |
| Cash, Cash Equivalents and Short-Term Investments | 62.74M | 44.45M | 40.56M | 33.83M | 21.28M | 43.59M |
| Total Debt | 47.63M | 158.99M | 75.23M | 127.26M | 98.06M | 85.46M |
| Total Liabilities | 431.63M | 374.49M | 305.67M | 228.32M | 202.32M | 152.25M |
| Stockholders Equity | -90.87M | -150.27M | -46.21M | -28.58M | -1.66M | 30.50M |
Cash Flow | ||||||
| Free Cash Flow | 27.23M | 39.91M | -7.95M | 3.69M | -57.69M | -68.75M |
| Operating Cash Flow | 30.62M | 44.93M | 4.77M | 11.50M | -55.40M | -58.91M |
| Investing Cash Flow | -2.81M | -5.02M | -4.37M | -7.82M | -1.68M | -6.09M |
| Financing Cash Flow | -9.90M | -36.02M | 2.25M | 7.99M | 29.27M | 52.79M |
Freightcar America Technical Analysis
Positive
9.58
Price Trends
11.67
Positive
10.28
Positive
9.64
Positive
Market Momentum
0.78
Negative
68.96
Neutral
91.79
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 9.58 is below the 20-day moving average (MA) of 12.92, below the 50-day MA of 11.67, and below the 200-day MA of 9.64, indicating a bullish trend. The MACD of 0.78 indicates Negative momentum. The RSI at 68.96 is Neutral, neither overbought nor oversold. The STOCH value of 91.79 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $45.10B | 38.55 | 11.01% | 0.46% | 4.40% | 14.60% | |
68 Neutral | $1.82B | 10.21 | 12.54% | 2.71% | -8.66% | 27.14% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $273.40M | 5.86 | ― | ― | -6.18% | ― | |
57 Neutral | $324.37M | 71.02 | 2.74% | ― | -5.51% | -88.11% | |
56 Neutral | $2.81B | 11.52 | 24.37% | 4.34% | -33.03% | -44.18% | |
40 Underperform | $16.27M | -0.67 | -74.03% | ― | ― | ― |
* Industrials Sector Average
RAIL
Freightcar America
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6.72
86.38%
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58.02
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FSTR
L. B. Foster Company
31.46
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TRN
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34.49
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WAB
Westinghouse Air Brake Technologies
262.81
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RVSN
Rail Vision Ltd.
8.38
-5.42
-39.28%
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.