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1. Company Snapshot

1.a. Company Description

L.B. Foster Company provides engineered and manufactured products and services for the building and infrastructure projects worldwide.The company's Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors; used rails; rail accessories, including track spikes and anchors, bolts, angle bars, tie plates, and other products; power rail, direct fixation fasteners, coverboards, and special accessories; and trackwork products, as well as engineers and manufactures insulated rail joints and related accessories.This segment also provides friction management products and application systems, railroad condition monitoring systems and equipment, wheel impact load detection systems, wayside data collection and management systems, track fasteners, and engineered concrete railroad ties; and aftermarket services.


Its Precast Concrete Products segment offers a range of specialty precast concrete products, such as sound walls, burial vaults, bridge beams, box culverts, septic tanks, and other custom pre-stressed products for use in transportation and general infrastructure markets.This segment also manufactures precast concrete buildings for use as restrooms, concession stands, and protective storage buildings in national, state, and municipal parks.The company's Steel Products and Measurement segment provides bridge decking, bridge railing, structural steel fabrications, expansion joints, bridge forms, and other products for highway construction and repair.


This segment also produces threaded pipe products for industrial water well, irrigation, and oil and gas markets, as well as offers pipe coatings for oil and gas pipelines and utilities, and precision measurement systems for the oil and gas market.The company markets its products directly, as well as through a network of agents.L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on FSTR

L.B. Foster Company's recent performance was driven by a series of positive developments. The company successfully amended its revolving credit agreement, extending the maturity date to 2030 and increasing borrowing capacity to $150 million. This move is expected to ease finance terms and provide a more accommodating covenant package. Additionally, the company completed a successful amendment to its credit agreement, further enhancing its financial flexibility.

1.c. Company Highlights

2. L.B. Foster's Q3 2025 Earnings: A Mixed Bag with Growth Ahead

L.B. Foster reported a modest 0.6% year-over-year sales growth in Q3 2025, driven by a 4.4% increase in the Infrastructure segment, thanks to a 12.7% rise in steel products sales. However, the Rail segment continued to struggle, with sales down 2.2%. Adjusted EBITDA declined by $1 million due to lower margins in both segments, partially offset by reduced SG&A expenses. The net income also took a hit, dropping to $4.4 million from $35.9 million last year. EPS came in at $0.40, missing estimates of $0.61. Despite the shortfall, cash provided by operations was robust at $29.2 million, enabling the company to reduce its net debt to $55.3 million.

Publication Date: Nov -29

📋 Highlights
  • Infrastructure Segment Growth:: Sales increased 4.4% Y/Y, driven by a 12.7% rise in steel products.
  • Rail Segment Decline:: Revenues fell 2.2% Y/Y, contrasting with Infrastructure's growth.
  • Adjusted EBITDA Drop:: Declined $1 million due to lower rail margins and higher infrastructure costs.
  • Q4 Guidance:: Anticipates 115% adjusted EBITDA growth and 25% sales increase, with $51.6M rail backlog supporting expansion.
  • Free Cash Flow:: Midpoint guidance at $17.5M, representing a 6% yield at current stock price.

Segment Performance

The Infrastructure segment was the bright spot, with sales growth led by steel products. In contrast, the Rail segment faced challenges, with declining sales volumes and unfavorable sales mix impacting gross profit. However, the Rail backlog increased by $51.6 million, driven by a 59.9% rise in Rail Products, which supports the company's growth expectations for Q4.

Guidance and Outlook

L.B. Foster has updated its 2025 guidance, anticipating significant growth and profitability expansion in Q4. The company expects adjusted EBITDA to surge by 115% on 25% sales growth. The guidance implies an adjusted EBITDA margin well above the 8% target for the last three quarters of 2025. The company's strong backlog and manufacturing capacity position it for a robust Q4, with a book-to-bill ratio of 1.8:1 and secured supply chain partners.

Valuation and Growth Prospects

With a P/E Ratio of 58.0 and an EV/EBITDA of 18.34, the market appears to be pricing in significant growth expectations. Analysts estimate revenue growth at 3.8% for next year. The company's focus on innovation and technology, as well as its strategic growth platforms, including condition monitoring and precast concrete, are expected to drive future growth. The current valuation metrics suggest that the market is optimistic about L.B. Foster's prospects, but the recent earnings miss and declining net income raise concerns about the company's ability to meet these expectations.

Cash Flow and Debt

The company's free cash flow yield stands at 12.64%, indicating a relatively attractive valuation. However, the Net Debt / EBITDA ratio of 4.08 suggests that L.B. Foster still has significant debt to contend with. The company's ability to generate cash and reduce debt will be crucial in achieving its growth objectives and improving its financial health.

3. NewsRoom

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L.B. Foster Company to Present Virtually at Sidoti's Year-End Conference on December 10, 2025, and at Singular Research's Best of the Uncovereds Conference on December 11, 2025

Dec -03

Source: globenewswire.com

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L.B. Foster Company: Despite Some Challenges, This Play Is Undervalued

Nov -26

Source: seekingalpha.com

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L.B. Foster Company (FSTR) Q3 2025 Earnings Call Transcript

Nov -03

Source: seekingalpha.com

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L.B. Foster Announces Continuing Sales Growth and Robust Cash Generation in Fiscal Third Quarter with Expected Strong Finish to 2025

Nov -03

Source: globenewswire.com

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L.B. Foster Company to Report Third Quarter 2025 Results on November 3, 2025

Oct -27

Source: globenewswire.com

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L.B. Foster Company to Present Virtually at Sidoti Small Cap Conference on September 18, 2025

Sep -11

Source: globenewswire.com

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L.B. Foster Company to Present at Three Part Advisors' Midwest IDEAS Investor Conference on August 27, 2025, in Chicago, IL

Aug -20

Source: globenewswire.com

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L.B. Foster Company: Even In Light Of Uncertainty, The Bull Thesis Remains

Aug -17

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.93%)

6. Segments

Rail, Technologies, and Services

Expected Growth: 3.5%

L.B. Foster's 3.5% growth is driven by increasing demand for rail infrastructure upgrades, adoption of advanced technologies such as positive train control and automation, and growing need for services like railcar maintenance and repair. Additionally, investments in digitalization and data analytics are enhancing operational efficiency and driving growth in the technologies segment.

Infrastructure Solutions

Expected Growth: 4.5%

L.B. Foster's Infrastructure Solutions segment growth is driven by increasing demand for rail and highway infrastructure projects, fueled by government investments in transportation infrastructure. Additionally, the company's focus on innovative solutions, such as its friction management systems, and strategic acquisitions have contributed to its 4.5% growth.

7. Detailed Products

Rail Technologies

L.B. Foster's Rail Technologies segment provides a range of products and services for the rail industry, including rail, rail accessories, and track components.

Portable Data Collection

L.B. Foster's Portable Data Collection segment offers a range of portable data collection devices and software for tracking and managing inventory, assets, and workflows.

Concrete Ties

L.B. Foster's Concrete Ties segment provides concrete railroad ties for use in rail infrastructure projects.

Electrification and Catenary Systems

L.B. Foster's Electrification and Catenary Systems segment provides electrification and catenary systems for rail and transit systems.

Bridge and Building Products

L.B. Foster's Bridge and Building Products segment provides a range of products for bridge construction and building projects, including bridge decking, expansion joints, and bearings.

8. L.B. Foster Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for L.B. Foster Company is medium, as there are some alternative products available in the market, but they are not very close substitutes.

Bargaining Power Of Customers

The bargaining power of customers for L.B. Foster Company is low, as the company has a diverse customer base and no single customer has a significant impact on the company's revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers for L.B. Foster Company is medium, as the company relies on a few key suppliers for its raw materials, but it also has some alternative sources available.

Threat Of New Entrants

The threat of new entrants for L.B. Foster Company is high, as the industry is attractive and there are low barriers to entry, making it easy for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry for L.B. Foster Company is high, as the industry is highly competitive and there are many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 32.09%
Debt Cost 5.98%
Equity Weight 67.91%
Equity Cost 7.95%
WACC 7.32%
Leverage 47.24%

11. Quality Control: L.B. Foster Company passed 3 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

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Value: 9.2

Growth: 1.8

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Yield: 9.0

Momentum: 2.5

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L.B. Foster

A-Score: 4.7/10

Value: 6.4

Growth: 4.2

Quality: 5.2

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

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A-Score: 3.9/10

Value: 5.3

Growth: 7.4

Quality: 6.0

Yield: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.01$

Current Price

27.01$

Potential

-0.00%

Expected Cash-Flows