TX Rail Products (TXRP) AI Stock Analysis

• Market Cap: $18.07M
• Dividend Yield: N/A
• Average Volume (3M): 66.89K
• Price to Earnings (P/E): 12.4
• Beta (1Y): -0.68
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 3
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.01
• Shares Outstanding: 48,053,085
• 10 Day Avg. Volume: 62,798
• 30 Day Avg. Volume: 66,887
• PEG Ratio: -0.34
• Price to Book (P/B): 5.05
• Price to Sales (P/S): 0.88
• P/FCF Ratio: -5.02
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 2.05
• Enterprise Value/Gross Profit: 8.19
• Enterprise Value/Ebitda: 13.77
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: $0.30 ▼(-12.35% Downside)
• Action: N/A Date: 01/28/26
• Date: Action: N/A 01/28/26

The score is held back primarily by financial risk: high leverage and sharply negative 2025 operating/free cash flow despite positive earnings. Offsetting this, technicals are strong with price above major moving averages and a positive MACD, and valuation appears reasonable at ~12x earnings.

Positive Factors

High Profitability Margins

Sustained mid-20s gross margin and double-digit operating/net margins indicate a structurally profitable distribution model. These margins provide lasting buffer versus cyclicality, supporting reinvestment and the ability to absorb cost shocks while preserving core earnings power over the next several months.

Multi-year Revenue Expansion (2021–2024)

A multi-year revenue expansion prior to 2025 suggests durable market penetration and customer adoption in its distribution niche. That historical growth underpins relationships, scale benefits, and distribution capabilities that can support recovery or stabilization after a short-term slowdown.

Recovering Equity and Asset Base

A tangible asset base and returned positive equity reflect meaningful balance-sheet repair, improving lender and supplier confidence. The recovery from prior negative equity increases financing optionality and provides a more durable foundation for operations and working-capital management.

Negative Factors

Elevated Leverage

Debt at roughly 2.8x equity creates persistent refinancing and interest-rate sensitivity that constrains strategic flexibility. High leverage increases default and covenant risk, making the company vulnerable to cash-flow volatility and limiting ability to invest without external funding over the medium term.

Negative Cash Conversion

Earnings that fail to convert to cash point to weak working-capital management or non-cash accounting items, undermining ability to service debt and fund operations. Persistently negative cash conversion will require external financing or asset sales and threatens liquidity over coming quarters.

Stalled Top-line Momentum

A reversal from prior growth to a 1% revenue decline signals demand softness or competitive pressure in distribution. With margins reliant on volume and limited headcount, sustained top-line weakness would erode operating leverage and make margin maintenance and debt servicing harder over time.

TX Rail Products Business Overview & Revenue Model

Company Description

TX Rail Products, Inc supplies, distributes, and sells drill bits, related tools, and other mining supplies and rail products to coal mining companies in the United States. It distributes and sells drill steel mining products, such as drill bit products and accessories used for hard and soft rock mining operations; tungsten carbide drill bits and augurs; and related accessories and tools. The company also offers tee rails for use in railroad tracks for the transportation of coal by coal mine operators; steel ties for use in securing rail; switches; and related accessories and tools. It sells its products through independent sales agents to resellers; and directly to coal mine operators. The company was formerly known as TX Holdings, Inc. and changed its name to TX Rail Products, Inc in January 2024. TX Rail Products, Inc was incorporated in 2000 and is headquartered in Ashland, Kentucky.

How the Company Makes Money

TX Rail Products Financial Statement Overview

Summary

Profitability is solid (2025 gross margin ~26%, operating margin ~13%, net margin ~12%) and earnings exceeded $1.0M, but this is outweighed by elevated leverage (~2.8x debt-to-equity) and a major 2025 cash conversion breakdown (operating cash flow and free cash flow both about -$1.45M despite positive net income). Revenue also slipped ~1% in 2025, signaling slowed momentum.

Income Statement

Revenue expanded strongly from 2021–2024, but growth turned slightly negative in 2025 (annual revenue down ~1%). Profitability improved meaningfully versus earlier years, with solid 2025 gross margin (~26%) and healthy operating and net margins (~13% and ~12%), supporting over $1.0M in earnings. The main weakness is the recent stall in top-line momentum, which raises questions about durability if demand softens.

Balance Sheet

Leverage increased materially in 2025, with debt rising to ~$4.0M and debt running at ~2.8x equity, which is elevated for a distributor. While equity has recovered from negative levels in prior years to ~$1.4M, the capital structure remains debt-heavy and adds refinancing/interest-rate sensitivity. Total assets (~$6.5M) support the business, but balance-sheet risk is the key constraint.

Cash Flow

Cash generation weakened sharply in 2025, with operating cash flow and free cash flow both at about -$1.45M despite positive net income (~$1.03M), indicating earnings are not currently converting to cash. While 2023 showed solid positive operating cash flow (~$0.46M) and free cash flow (~$0.37M), the recent reversal is a notable red flag and could pressure liquidity given the higher debt load.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	9.78M	8.26M	8.15M	7.01M	3.91M	3.44M
Gross Profit	2.44M	2.12M	2.19M	1.39M	978.76K	644.49K
EBITDA	1.45M	1.13M	1.36M	691.83K	428.65K	153.32K
Net Income	1.36M	1.03M	1.30M	648.35K	380.87K	133.80K
Balance Sheet
Total Assets	7.12M	6.54M	4.11M	3.65M	2.97M	2.38M
Cash, Cash Equivalents and Short-Term Investments	68.49K	111.21K	113.98K	159.09K	108.97K	59.27K
Total Debt	3.17M	4.00M	2.45M	2.22M	2.30M	2.37M
Total Liabilities	5.18M	5.11M	3.70M	4.52M	4.40M	4.20M
Stockholders Equity	1.94M	1.44M	409.42K	-871.90K	-1.43M	-1.82M
Cash Flow
Free Cash Flow	-652.09K	-1.45M	-82.65K	369.61K	146.46K	15.84K
Operating Cash Flow	-652.10K	-1.45M	228.03K	455.50K	146.46K	23.14K
Investing Cash Flow	0.00	0.00	-301.68K	-85.89K	0.00	-7.29K
Financing Cash Flow	461.09K	1.44M	28.54K	-319.48K	-96.76K	19.34K

TX Rail Products Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CVR	59 Neutral	$13.04M	-3.68	-16.20%	0.84%	-12.32%	0.17%
TXRP	55 Neutral	$18.07M	12.45	―	―	―	―
HIHO	52 Neutral	$4.19M	-7.71	-8.38%	9.60%	-19.68%	-2.61%
CDTG	42 Neutral	$2.96M	-16.22	-3.36%	―	-45.28%	-100.22%
POLA	40 Underperform	$4.15M	-0.45	-119.92%	―	-44.32%	-49.47%