Westinghouse Air Brake Technologies (WAB) AI Stock Analysis

• Market Cap: $45.10B
• Dividend Yield: 0.46%
• Average Volume (3M): 819.39K
• Price to Earnings (P/E): 38.5
• Beta (1Y): 1.16
• Revenue Growth: 4.40%
• EPS Growth: 14.60%
• Country: US
• Employees: 29,500
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 2.10
• Shares Outstanding: 170,517,200
• 10 Day Avg. Volume: 1,075,415
• 30 Day Avg. Volume: 819,389
• PEG Ratio: 2.32
• Price to Book (P/B): 3.27
• Price to Sales (P/S): 3.26
• P/FCF Ratio: 24.28
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 4.51
• Enterprise Value/Gross Profit: 13.51
• Enterprise Value/Ebitda: 21.61
• 1Y Price Target: $282.38
• Price Target Upside: 7.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 10.39
• Revenue Forecast (FY): $12.28B

• Rating: 77 Outperform
• Price Target: $288.00 ▲(9.58% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven by strong financial performance (margin expansion and solid free cash flow) and a constructive earnings outlook (upbeat 2026 guidance supported by expanding backlogs and integration savings). Technical momentum is positive but looks overbought, and the high P/E with a low dividend yield weighs on the overall rating.

Positive Factors

Backlog & Order Visibility

A large, growing backlog provides multi‑quarter revenue visibility and supports management's 2026 guidance. High backlog conversion into modernization and new locomotive orders underpins sustained equipment and aftermarket revenue streams and reduces near‑term top‑line volatility.

Improving Profitability & Margins

Material margin expansion over several years reflects pricing, product mix shift to higher‑value equipment and services, and operational improvements. Higher and more stable margins support durable cash generation and provide buffer vs cyclical demand swings in rail equipment markets.

Strong Cash Generation

Consistently strong cash conversion and robust free cash flow enable disciplined capital allocation: dividend hikes, buybacks, and bolt‑on M&A. Reliable cash generation improves financial flexibility to fund growth, integration costs, and long‑life service obligations.

Negative Factors

Rising Leverage

Debt increases to fund acquisitions and integrations reduce financial flexibility. With operating cash flow covering a moderate portion of total debt, higher leverage could limit strategic optionality, increase interest sensitivity, and constrain capital returns if macro conditions weaken.

Tariff‑Driven Cost Pressure

Sustained tariff and input cost headwinds can erode recent margin gains and force price adjustments or margin sacrifice. Structural or prolonged trade/tariff disruptions would compress returns on new equipment and aftermarket parts, slowing margin improvement absent effective cost pass‑throughs.

Acquisition‑Driven Digital Growth

Heavy reliance on M&A to drive digital revenue signals weaker organic adoption of digital products. This raises integration risk and questions sustainability of higher‑margin digital streams; long‑term value depends on successful product integration and genuine organic demand improvement.

Westinghouse Air Brake Technologies Business Overview & Revenue Model

Company Description

Westinghouse Air Brake Technologies Corporation provides technology-based equipment, systems, and services for the freight rail and passenger transit industries worldwide. It operates through two segments, Freight and Transit. The Freight segment manufactures and services components for new and existing freight cars and locomotives; builds new commuter locomotives; rebuilds freight locomotives; supplies railway electronics, positive train control equipment, signal design, and engineering services; and provides related heat exchange and cooling systems. It serves publicly traded railroads; leasing companies; manufacturers of original equipment, including locomotives and freight cars; and utilities. The Transit segment manufactures and services components for new and existing passenger transit vehicles, such as regional trains, high speed trains, subway cars, light-rail vehicles, and buses; refurbishes subway cars; and provides heating, ventilation, and air conditioning equipment, as well as doors for buses and subways. This segment serves public transit authorities and municipalities, leasing companies, and manufacturers of subway cars and buses. It also provides electronically controlled pneumatic braking products; railway electronics; freight car trucks; draft gears, couplers, and slack adjusters; air compressors and dryers; heat exchangers and cooling products; and track and switch products. In addition, the company offers railway braking equipment and related components; friction products; new switcher locomotives; transit locomotive and car overhaul services; and freight locomotive overhaul, modernizations, and refurbishment services. Further, it provides platform screen doors; pantographs; window assemblies; couplers; accessibility lifts and ramps for buses and subway cars; and traction motors. The company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.

How the Company Makes Money

Westinghouse Air Brake Technologies generates revenue through multiple streams, primarily from the sale of its core products, which include braking systems and components for both freight and passenger rail systems. The company also earns significant income from aftermarket services, which involve maintenance, repair, and refurbishment of its products, providing continuous revenue through service contracts and parts sales. WAB has established key partnerships with various rail operators and manufacturers, allowing it to secure long-term contracts that contribute to stable revenue. Additionally, the company invests in research and development to innovate and expand its product offerings, which helps in capturing new markets and enhancing its competitive edge, leading to increased sales and profitability.

Westinghouse Air Brake Technologies Financial Statement Overview

Summary

Strong multi-year improvement with steady revenue growth, expanding gross/operating/net margins, and solid free cash flow with strong cash-to-earnings quality. Key risks are slower most-recent revenue growth, higher total debt in 2025, and only moderate operating cash flow coverage of debt.

Income Statement

Revenue has grown steadily from $7.56B (2020) to $11.17B (2025), with growth positive in each of the last five years. Profitability has improved meaningfully: gross margin expanded from ~28.3% (2020) to ~34.1% (2025), and net margin rose from ~5.5% to ~10.5% over the same period. Operating profitability also strengthened (operating margin ~10.0% to ~16.2%). The main soft spot is that the most recent revenue growth rate is modest (about 3.5% in 2025), suggesting a slower top-line trajectory versus prior years.

Balance Sheet

The balance sheet looks generally healthy with sizable equity ($11.14B in 2025) and moderate leverage (debt-to-equity ~0.50 in 2025). Returns on shareholders’ capital have improved versus earlier years (return on equity ~4.1% in 2020 to ~10.5% in 2025), indicating better earnings power. A key watch item is that total debt increased to $5.54B in 2025 from $4.29B in 2024, pushing leverage higher and reducing flexibility if conditions weaken.

Cash Flow

Cash generation is solid: operating cash flow was $1.76B in 2025 and free cash flow matched it, with a strong free-cash-flow growth rate (~25% in 2025). Free cash flow relative to accounting earnings is strong (free cash flow equal to net income in 2025; high-80% range in most prior years), suggesting good earnings quality. The main concern is cash conversion volatility year-to-year (for example, operating cash flow fell in 2023 vs. 2022 before rebounding), and operating cash flow covers only a moderate portion of total debt (coverage ratio ~0.34 in 2025).

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.17B	10.39B	9.68B	8.36B	7.82B
Gross Profit	3.52B	3.37B	2.94B	2.54B	2.37B
EBITDA	2.37B	2.07B	1.79B	1.47B	1.35B
Net Income	1.17B	1.06B	815.00M	633.00M	558.00M
Balance Sheet
Total Assets	22.07B	18.70B	18.99B	18.52B	18.45B
Cash, Cash Equivalents and Short-Term Investments	789.00M	706.00M	620.00M	541.00M	473.00M
Total Debt	5.54B	3.98B	4.07B	4.00B	4.06B
Total Liabilities	10.88B	8.57B	8.46B	8.37B	8.21B
Stockholders Equity	11.14B	10.09B	10.49B	10.10B	10.20B
Cash Flow
Free Cash Flow	1.50B	1.63B	1.01B	889.00M	943.00M
Operating Cash Flow	1.76B	1.83B	1.20B	1.04B	1.07B
Investing Cash Flow	-2.75B	-343.00M	-492.00M	-235.00M	-540.00M
Financing Cash Flow	1.03B	-1.37B	-633.00M	-708.00M	-653.00M

Westinghouse Air Brake Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 262.81
• 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 WAB, the sentiment is Positive. The current price of 262.81 is above the 20-day moving average (MA) of 248.82, above the 50-day MA of 232.51, and above the 200-day MA of 208.08, indicating a bullish trend. The MACD of 9.73 indicates Negative momentum. The RSI at 74.99 is Negative, neither overbought nor oversold. The STOCH value of 84.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WAB.

Westinghouse Air Brake Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAB	77 Outperform	$45.10B	38.55	11.01%	0.46%	4.40%	14.60%
UNP	73 Outperform	$158.23B	22.26	40.38%	2.32%	1.06%	8.21%
GBX	68 Neutral	$1.82B	10.21	12.54%	2.71%	-8.66%	27.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RAIL	62 Neutral	$273.40M	5.86	―	―	-6.18%	―
FSTR	57 Neutral	$324.37M	71.02	2.74%	―	-5.51%	-88.11%
TRN	56 Neutral	$2.81B	11.52	24.37%	4.34%	-33.03%	-44.18%

Westinghouse Air Brake Technologies Corporate Events

Wabtec Posts Strong Q4 Results and Raises Shareholder Returns

On February 11, 2026, Wabtec reported that fourth-quarter 2025 sales rose 14.8% year over year to $2.97 billion, driven by strong growth in its Freight and Transit segments, with adjusted diluted EPS up 25% to $2.10 despite a 4.1% decline in GAAP EPS to $1.18. For full-year 2025, sales reached $11.17 billion, GAAP EPS climbed 13.1% to $6.83, adjusted EPS increased 18.7% to $8.97, operating cash flow totaled $1.76 billion, the multi‑year backlog hit a record $27 billion, and the board raised the dividend while expanding share buybacks, underscoring confidence in future growth.

The Freight segment posted an 18.3% quarterly sales increase, boosted by 33.5% growth in equipment, 74.4% growth in digital sales from recent acquisitions, and higher components revenue, even as services declined due to expected timing of modernization deliveries. Adjusted operating margins improved at both the consolidated and segment levels, reflecting better gross margins partly offset by higher operating expenses and one-time restructuring and transaction charges tied to portfolio optimization and acquisitions, positioning Wabtec for continued earnings growth in 2026 supported by its record backlog and 2026 guidance.

The most recent analyst rating on (WAB) stock is a Buy with a $278.00 price target. To see the full list of analyst forecasts on Westinghouse Air Brake Technologies stock, see the WAB Stock Forecast page.