TX Rail Products (TXRP) AI Stock Analysis

• Market Cap: $12.98M
• Dividend Yield: N/A
• Average Volume (3M): 66.89K
• Price to Earnings (P/E): 4.4
• Beta (1Y): -0.49
• 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: 1.18
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 6.24
• Enterprise Value/Ebitda: 10.50
• 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: $0.28 ▼(-18.53% 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

Strong profitability margins

Sustained mid‑20s gross margin with double‑digit operating and net margins indicates durable pricing power or cost control in distribution. Over a 2–6 month horizon this supports earnings stability, cushions against moderate volume declines and underpins cash generation if conversion improves.

Multi‑year revenue expansion

A multi‑year track record of top‑line growth shows the company has previously captured market share or benefited from secular demand. This historical momentum implies structural strengths in sales channels or product mix that can be re‑levered if operational issues are addressed.

Asset base and equity recovery

A tangible asset base and restored positive equity provide balance‑sheet cushioning and optionality for refinancing or asset‑backed funding. That recovery from prior negative equity reduces bankruptcy risk and gives management time to repair cash flows.

Negative Factors

Elevated leverage

Debt roughly 2.8x equity makes the capital structure highly sensitive to interest rates and refinancing windows. Persistent high leverage limits financial flexibility, raises default risk if cash flow underperforms, and forces priority on debt service over growth investments.

Weak cash conversion

Earnings failing to convert to cash is a structural red flag: negative OCF and FCF while earnings are positive indicate working capital stress or non‑cash earnings items. This undermines liquidity, complicates debt servicing and curtails reinvestment without external funding.

Recent top‑line stall

A reversal from multi‑year growth to a revenue decline signals possible demand weakening or competitive pressure. If the top line remains flat or negative, fixed costs and high leverage will amplify margin volatility and make earnings less durable over the medium term.

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	$13.90M	37.35	-16.20%	0.84%	-12.32%	0.17%
TXRP	55 Neutral	$12.98M	4.45	―	―	―	―
HIHO	52 Neutral	$4.22M	-15.91	-8.38%	9.60%	-19.68%	-2.61%
CDTG	42 Neutral	$5.05M	-11.98	-3.36%	―	-45.28%	-100.22%
POLA	40 Underperform	$3.83M	-0.51	-119.92%	―	-44.32%	-49.47%