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1. Company Snapshot

1.a. Company Description

FreightCar America, Inc., through its subsidiaries, designs, manufactures, and sells railcars and railcar components for the transportation of bulk commodities and containerized freight products primarily in North America.It operates in two segments, Manufacturing and Parts.The company offers a range of freight cars, including open top hoppers; covered hopper cars; gondolas; triple hoppers and hybrid aluminum/stainless steel railcars; ore hopper and gondola railcars; ballast hopper cars; aggregate hopper cars; intermodal flats; and non-intermodal flat cars.


It also provides railcars, including coal cars, bulk commodity cars, coil steel cars, and boxcars; and woodchip hoppers, aluminum vehicle carriers, and articulated bulk container railcars.In addition, the company sells used railcars; leases, rebuilds, and converts railcars; and sells forged, cast, and fabricated parts for various railcars.It also exports its manufactured railcars to Latin America and the Middle East.


The company's customers primarily include financial institutions, railroads, and shippers.FreightCar America, Inc.was founded in 1901 and is headquartered in Chicago, Illinois.

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1.b. Last Insights on RAIL

FreightCar America's recent performance was negatively impacted by a disappointing Q1 2025 earnings release, which saw the company miss the Zacks Consensus Estimate of $0.08 per share, reporting earnings of $0.05 per share. This underperformance was a stark contrast to the company's Q4 2024 results, which had shown a 56% increase in revenue and a 60% increase in gross profit. The Q1 2025 earnings release also highlighted a 26% increase in gross profit, but this was offset by a decline in revenue.

1.c. Company Highlights

2. FreightCar America's Q3 2025 Earnings Shine with Revenue Growth and Margin Expansion

FreightCar America's third-quarter 2025 financial performance was robust, with revenues surging 42% year-over-year to $160.5 million, driven by a 35% increase in railcar deliveries to 1,304 units. Adjusted EBITDA for the quarter was $17 million, representing a margin of 10.6%, up from 9.6% in the same period last year. The company's earnings per share (EPS) came in at $0.24, beating estimates of $0.16. The strong operational execution and favorable product mix contributed to the impressive financial results.

Publication Date: Nov -16

📋 Highlights

Operational Highlights

The company's Castanos facility continued to demonstrate operational excellence, with improvements in safety, quality, throughput, and cost structure. The TrueTrack digital integration initiative is also showing promising results, enabling on-time deliveries, increased efficiencies, and high-quality output. As Nicholas Randall noted, "These efficiency gains and the reliability of our processes have been instrumental in supporting our record EBITDA performance at our facility."

Guidance and Outlook

Regarding the revenue guidance, Nicholas Randall mentioned that the company doesn't expect a massive swing in the product mix between rebuilds and new builds. The adjusted EBITDA margin is expected to step down in Q4 due to a less favorable product mix and annual maintenance shutdowns. However, the company is working to repurpose operational lines to make margins more sustainable. Analysts estimate revenue growth of 9.5% for next year, indicating a continued positive trajectory.

Valuation and Industry Dynamics

FreightCar America's valuation metrics indicate a relatively low price-to-sales ratio of 0.18 and an EV/EBITDA ratio of 11.25. The company's market share of new railcar orders is around 20%, driven by its experience, breadth of product, and execution. Industry dynamics are expected to normalize, with order placement trending back to 40,000 units per year in 2026, according to Nicholas Randall. W. Matthew Tonn added that the company's backlog and history of deliveries suggest a bubble in the industry, which will be addressed in the second half of 2026.

3. NewsRoom

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Railtown AI Technologies Announces Closing of the Amalgamation with AI Partnerships Corp.

Nov -27

Source: newsfilecorp.com

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FreightCar America, Inc. to Present at NobleCon21

Nov -26

Source: globenewswire.com

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4 Stocks With Solid Net Profit Margins to Enhance Portfolio Returns

Nov -12

Source: zacks.com

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FreightCar America, Inc. (RAIL) Q3 2025 Earnings Call Transcript

Nov -10

Source: seekingalpha.com

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Freightcar America (RAIL) Q3 Earnings and Revenues Surpass Estimates

Nov -10

Source: zacks.com

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Railtown AI Technologies Announces Intention to Complete the Amalgamation with AI Partnerships Corp.

Nov -07

Source: newsfilecorp.com

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Freightcar America (RAIL) versus Its Peers Critical Survey

Nov -03

Source: defenseworld.net

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Forget Profit, Pick These 4 Stocks With Increasing Cash Flows

Oct -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Manufacturing

Expected Growth: 4.5%

Growing demand for rail transportation, increasing need for railcar replacement, and investments in rail infrastructure are expected to drive the growth of the railcar manufacturing segment.

Corporate and Other

Expected Growth: 4.5%

Growing demand for railcar leasing and management services, driven by increasing rail transportation needs and a shift towards outsourcing, will fuel growth in FreightCar America's Corporate and Other segment.

7. Detailed Products

Railcars

FreightCar America, Inc. designs and manufactures a wide range of railcars, including open-top hopper cars, covered hopper cars, gondola cars, and intermodal cars, among others.

Railcar Components

The company offers a variety of railcar components, including axles, wheels, bearings, and brake systems.

Railcar Repair and Maintenance

FreightCar America, Inc. provides repair and maintenance services for railcars, including inspections, repairs, and refurbishments.

Leasing and Financing

The company offers leasing and financing options for railcars, providing customers with flexible and cost-effective solutions.

8. FreightCar America, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for FreightCar America, Inc. is medium due to the presence of alternative transportation methods such as trucks and ships, but the high cost and complexity of switching to these alternatives reduces the threat.

Bargaining Power Of Customers

The bargaining power of customers for FreightCar America, Inc. is low due to the company's strong relationships with its customers and the lack of concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers for FreightCar America, Inc. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices, but the high cost of switching suppliers reduces the bargaining power.

Threat Of New Entrants

The threat of new entrants for FreightCar America, Inc. is low due to the high barriers to entry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry for FreightCar America, Inc. is high due to the presence of several competitors in the industry, including Trinity Industries and Greenbrier Companies, and the high stakes of competition in the railcar manufacturing industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 267.13%
Debt Cost 13.66%
Equity Weight -167.13%
Equity Cost 13.66%
WACC 13.66%
Leverage -159.83%

11. Quality Control: FreightCar America, Inc. 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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National Presto

A-Score: 6.4/10

Value: 5.6

Growth: 3.0

Quality: 7.4

Yield: 5.0

Momentum: 9.5

Volatility: 7.7

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Global Industrial

A-Score: 5.5/10

Value: 4.0

Growth: 4.9

Quality: 6.9

Yield: 7.0

Momentum: 6.0

Volatility: 4.3

1-Year Total Return ->

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Steelcase

A-Score: 5.5/10

Value: 6.9

Growth: 4.6

Quality: 4.5

Yield: 7.0

Momentum: 8.0

Volatility: 2.0

1-Year Total Return ->

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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

1-Year Total Return ->

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Willis Lease Finance

A-Score: 4.6/10

Value: 7.8

Growth: 7.6

Quality: 5.0

Yield: 1.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

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FreightCar America

A-Score: 4.2/10

Value: 10.0

Growth: 5.3

Quality: 5.4

Yield: 0.0

Momentum: 2.5

Volatility: 2.0

1-Year Total Return ->

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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

8.54$

Current Price

8.54$

Potential

-0.00%

Expected Cash-Flows