Freightcar America (RAIL) AI Stock Analysis

• Market Cap: $219.79M
• Dividend Yield: N/A
• Average Volume (3M): 168.43K
• Price to Earnings (P/E): 4.6
• Beta (1Y): 2.43
• Revenue Growth: -6.18%
• EPS Growth: N/A
• Country: US
• Employees: 2,030
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 0.24
• Shares Outstanding: 19,079,105
• 10 Day Avg. Volume: 262,095
• 30 Day Avg. Volume: 168,427
• PEG Ratio: -0.02
• Price to Book (P/B): -1.83
• Price to Sales (P/S): 0.49
• P/FCF Ratio: 6.90
• Enterprise Value/Market Cap: 1.83
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 15.41
• 1Y Price Target: $18.00
• Price Target Upside: 87.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.55
• Revenue Forecast (FY): $535.97M

• Rating: 60 Neutral
• Price Target: $8.50 ▼(-11.27% Downside)

FreightCar America's strong earnings call performance and undervalued P/E ratio are significant positives. However, financial instability and bearish technical indicators weigh down the overall score. The company needs to address balance sheet weaknesses and improve cash flow management to enhance its financial position.

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 Business Overview & Revenue Model

Company Description

FreightCar 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 Money

FreightCar 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 Financial Statement Overview

Summary

Freightcar America shows positive revenue growth and improved profit margins, but faces significant financial instability with negative equity and high leverage. Cash flow management needs improvement, with declining free cash flow and low conversion of net income to cash.

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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 9.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 above the 20-day moving average (MA) of 9.36, above the 50-day MA of 8.95, and above the 200-day MA of 8.40, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 76.86 is Negative, neither overbought nor oversold. The STOCH value of 93.64 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAB	79 Outperform	$37.57B	31.94	11.07%	0.46%	4.40%	14.60%
GBX	69 Neutral	$1.44B	7.32	14.03%	2.71%	-8.66%	27.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TRN	62 Neutral	$2.23B	24.28	10.04%	4.34%	-33.03%	-44.18%
RAIL	60 Neutral	$219.79M	4.65	―	―	-6.18%	―
FSTR	57 Neutral	$292.88M	64.26	2.74%	―	-5.51%	-88.11%
RVSN	42 Neutral	$19.54M	-0.82	-74.03%	―	―	―

Freightcar America Corporate Events

FreightCar America Amends Executive Severance Benefits

On September 11, 2025, FreightCar America, Inc.’s board of directors approved amendments to the employment arrangements of its top executives, Nicholas J. Randall and Michael A. Riordan, effective September 3, 2025. These amendments modify the severance benefits for these executives in the event of a qualifying termination following a Change in Control. The changes include extended salary continuation, bonus payments, and health plan participation, replacing previous severance benefits under the company’s Executive Severance Plan.

FreightCar America Declares Stockholder Rights Plan

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.