TX Rail Products (TXRP) AI Stock Analysis

• Market Cap: $12.44M
• Dividend Yield: N/A
• Average Volume (3M): 66.89K
• Price to Earnings (P/E): 4.4
• Beta (1Y): -0.44
• 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: 1.19
• Enterprise Value/Revenue: 1.51
• Enterprise Value/Gross Profit: 6.04
• Enterprise Value/Ebitda: 10.15
• 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: $0.22 ▼(-36.76% Downside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is held back primarily by financial risk—weak 2025 cash flow despite positive earnings and a debt-heavy balance sheet—along with a weak price trend versus moving averages. These are partially offset by attractive valuation (low P/E) and generally neutral momentum readings.

Positive Factors

Strong profitability

TX Rail Products generated solid 2025 margins (gross ~26%, operating ~13%, net ~12%) and about $1.0M net income. Durable margin rates indicate the distributor retains pricing or cost advantages, supporting cash earnings potential and providing a buffer versus modest revenue swings over the medium term.

Multi-year revenue growth

The company’s multi-year revenue expansion through 2021–2024 and a ~12.7% growth metric reflect sustained product-market fit and distribution capability. This track record creates a structural growth runway and operational know-how that can support recovery after short dips and underpins earnings durability.

Asset base and equity recovery

An asset base near $6.5M and the restoration of equity to about $1.4M provide tangible backing for operations and creditors. The rebuilt capital position improves solvency metrics versus prior negative equity, offering some support for working capital and potential refinancing despite remaining leverage challenges.

Negative Factors

Elevated leverage

Debt of roughly $4.0M and a debt/equity ratio near 2.8x create a debt-heavy capital structure. Elevated leverage increases refinancing and interest-rate sensitivity, constrains strategic investment capacity, and magnifies downside risk if earnings or cash flow weaken, limiting long-term financial flexibility.

Poor cash conversion

Operating and free cash flow each swung to about -$1.45M in 2025 even with roughly $1.03M net income, signaling a breakdown in cash conversion. Persistent negative cash flows strain liquidity, threaten the ability to service debt and fund working capital, and elevate the probability of near-term financing stress.

Top-line stall in 2025

After several years of expansion, revenue edged down about 1% in 2025, indicating a recent stall in demand or sales momentum. For a small distributor with limited scale and high leverage, even modest revenue declines can disproportionately harm coverage ratios and cash flow, challenging the durability of earnings.

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

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TX Rail Products Financial Statement Overview

Summary

Profitability is solid (2025 gross margin ~26%, operating margin ~13%, net margin ~12%, with ~$1.0M net income), but is heavily offset by elevated leverage (debt ~2.8x equity) and a major deterioration in cash conversion (2025 operating cash flow and free cash flow both about -$1.45M).

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	$13.77M	37.35	-16.20%	0.84%	-12.32%	0.17%
TXRP	55 Neutral	$12.44M	4.45	97.12%	―	―	―
HIHO	52 Neutral	$3.69M	-15.91	-8.38%	9.60%	-19.68%	-2.61%
CDTG	42 Neutral	$4.75M	-11.98	-0.83%	―	-45.28%	-100.22%
POLA	40 Underperform	$4.49M	-0.51	-119.92%	―	-44.32%	-49.47%