Talgo, S.A. (TLGO.MC) | Investment Case

1. Company Snapshot

1.a. Company Description

Talgo, S.A. designs, manufactures, and maintains railway rolling stock and auxiliary machinery worldwide.It offers very high speed, high speed, and intercity trains and locomotives.The company also provides maintenance equipment, including underfloor wheel lathes for maintenance of high speed and long-distance trains; and shunting cars, as well as measuring equipment to railway operators.

In addition, it offers maintenance and rolling stock refurbishment services.The company was formerly known as Pegaso Rail International, S.A. The company was founded in 1942 and is headquartered in Madrid, Spain.

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1.b. Last Insights on TLGO

Talgo, S.A. has been identified as one of the European stocks estimated to be trading up to 26% below its intrinsic value, amid a positive shift in European markets. The company's revenue is forecast to grow 7.7% per year, outpacing the wider Spanish market's 4.6% rate. Analysts predict a turn to profitability within three years, with earnings expected to expand strongly at 116.12% per year. Improved business activity and consumer confidence in the Eurozone may provide potential opportunities for growth.

1.c. Company Highlights

Last Price	2.81
Change Percentage	0.36%
Open	2.85
Previous Close	2.81
Market Cap ( Millions)	346
Volume	206804
Year High	4.37
Year Low	2.52
M A 50	2.72
M A 200	3.0

FCF Yield	-44.23%
Dividend Yield	0.00%
ROE	-89.99%
Debt / Equity	542.53%
Net Debt / EBIDTA	-440.28%
Price To Book	3.21
Price Earnings Ratio	-2.08
Price To FCF	-2.26
Price To sales	0.42
EV / EBITDA	-7.66

2. Transcript Summary

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3. NewsRoom

3 European Stocks That May Be Trading Below Intrinsic Value By Up To 26.7%

Nov -24

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Prosegur Cash And 2 European Stocks That Could Be Trading Below Their Estimated Value

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3 European Stocks Estimated To Be Trading Up To 48.2% Below Intrinsic Value

Oct -30

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October 2025's European Stock Selections For Estimated Value Opportunities

Oct -29

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Global Market Stocks Estimated Below Intrinsic Value In October 2025

Oct -29

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3 European Stocks Estimated To Be Trading Up To 26% Below Intrinsic Value

Oct -29

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European Stocks Trading Below Estimated Value In October 2025

Oct -28

Source:

European Value Stock Picks For October 2025

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.09%)

6. Segments

Rolling Material

Expected Growth: 3%

Talgo's Rolling Material segment growth is driven by increasing demand for high-speed rail solutions, government investments in rail infrastructure, and the company's strategic expansion into new markets. Additionally, the adoption of sustainable transportation solutions and the need for efficient logistics management also contribute to the segment's growth.

Auxiliary Machines and Others

Expected Growth: 5%

Talgo's Auxiliary Machines and Others segment growth is driven by increasing demand for high-speed rail, government investments in rail infrastructure, and the company's strategic expansion into new markets. Additionally, the segment benefits from Talgo's innovative products and services, such as its proprietary variable gauge system, which enhances competitiveness and drives sales growth.

7. Detailed Products

High-Speed Trains

Talgo's high-speed trains are designed for maximum speed and comfort, with advanced aerodynamics and reduced noise levels.

Regional and Commuter Trains

Talgo's regional and commuter trains offer comfortable and reliable transportation for short- and medium-distance journeys.

Intercity and Long-Distance Trains

Talgo's intercity and long-distance trains offer comfortable and convenient travel for longer journeys.

Passenger Coaches

Talgo's passenger coaches are designed for comfort and safety, with advanced suspension and braking systems.

Maintenance and Refurbishment Services

Talgo's maintenance and refurbishment services ensure that trains are kept in optimal condition, extending their lifespan and reducing downtime.

Engineering and Consulting Services

Talgo's engineering and consulting services provide expert advice and support for rail projects, from design to implementation.

8. Talgo, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Talgo, S.A. faces moderate threat from substitutes due to the presence of alternative modes of transportation such as buses and cars. However, the convenience and comfort of high-speed rail travel provided by Talgo's trains reduce the likelihood of customers switching to substitutes.

Bargaining Power Of Customers

Customers have low bargaining power due to the lack of alternative high-speed rail services in many markets. This gives Talgo, S.A. an advantage in negotiating prices and contracts.

Bargaining Power Of Suppliers

Talgo, S.A. faces moderate bargaining power from suppliers due to the presence of multiple suppliers for components and materials. However, the company's large scale of operations and long-term contracts help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the high-speed rail industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The high-speed rail industry is highly competitive, with several established players competing for market share. Talgo, S.A. faces intense rivalry from companies such as Siemens, Alstom, and Bombardier.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	58.58%
Debt Cost	10.77%
Equity Weight	41.42%
Equity Cost	10.77%
WACC	10.77%
Leverage	141.44%

11. Quality Control: Talgo, S.A. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

FirstGroup

A-Score: 6.6/10

Value: 8.8

Growth: 7.1

Quality: 3.7

Yield: 4.4

Momentum: 9.5

Volatility: 6.3

1-Year Total Return ->

Jungfraubahn

A-Score: 6.3/10

Value: 3.1

Growth: 6.8

Quality: 6.9

Yield: 3.1

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

BVZ Holding

A-Score: 6.0/10

Value: 7.6

Growth: 5.7

Quality: 4.2

Yield: 1.9

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

Vossloh

A-Score: 5.4/10

Value: 3.4

Growth: 6.6

Quality: 5.5

Yield: 3.8

Momentum: 9.5

Volatility: 3.7

1-Year Total Return ->

Talgo

A-Score: 3.6/10

Value: 8.4

Growth: 1.6

Quality: 2.8

Yield: 1.2

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

Mobico

A-Score: 2.7/10

Value: 8.8

Growth: 2.7

Quality: 2.6

Yield: 1.2

Momentum: 0.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.67%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.77%

Talgo, S.A. - ES0105065009

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TLGO

1.c. Company Highlights

Strong Momentum

Average Growth

Average Quality

Revenues Beats

Average Yield

Lower Yield

Lower Growth

Stable Momentum

Weak Momentum

Cheaper

Lower Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.09%)

6. Segments

Rolling Material

Expected Growth: 3%

Auxiliary Machines and Others

Expected Growth: 5%

7. Detailed Products

High-Speed Trains

Regional and Commuter Trains

Intercity and Long-Distance Trains

Passenger Coaches

Maintenance and Refurbishment Services

Engineering and Consulting Services

8. Talgo, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Talgo, S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.81$

Current Price

2.81$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA