Stock of the Week - $WAB

Westinghouse Air Brake Technologies s stock analysis based on the latest earnings report filed to the SEC. Get one free financial analysis of a stock weekly in your inbox.

WAB 0.00%↑

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.

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Wabtec Corporation: A Comprehensive Financial Analysis

Introduction

Wabtec Corporation, a leader in the transportation and logistics sector, has demonstrated robust financial performance in its recent quarterly results. With a focus on innovation and operational efficiency, Wabtec is well-positioned to capitalize on growth opportunities in the rail and transit markets. This report delves into Wabtec's financial statements, evaluates its performance metrics, and compares its standing against market peers, while also addressing potential risks and investment considerations.

Financial Overview

Income Statement Highlights (Q3 2024)

• Revenue: $2.66 billion

• Net Income: $286 million

• Earnings Per Share (EPS): $1.63 (diluted)

• EBITDA: $567 million

Balance Sheet Snapshot (as of September 30, 2024)

• Total Assets: $18.644 billion

• Total Liabilities: $8.353 billion

• Shareholders' Equity: $10.291 billion

Cash Flow Statement (YTD 2024)

• Net Cash Provided by Operating Activities: $1.645 billion

• Capital Expenditures: $371 million

• Free Cash Flow: $1.274 billion

Statement of Shareholder Equity

• Beginning Equity: $10.487 billion

• Net Income: $854 million

• Dividends Paid: $10 million

• Ending Equity: $10.291 billion

Key Metrics

• Current Stock Price: $199

• Price-to-Earnings (P/E) Ratio: 199 / 4.80 = 41.5

• Revenue Growth: 4.4% YoY

• Earnings Growth: 18% YoY

Market Comparison

Wabtec's P/E ratio of 41.5 indicates a premium valuation compared to the industry average of approximately 25. The company’s revenue and earnings growth rates are above the industry average, suggesting strong operational performance. However, compared to its peers, Wabtec's valuation may appear stretched, indicating a potential overvaluation in a rising interest rate environment.

Industry and Peer Comparison

• Market Average P/E: ~25

• Industry P/E: ~30

• Wabtec P/E: 41.5

Wabtec's growth metrics are favorable, but its high valuation may deter value-focused investors. The company is positioned well in the growth category, but it faces challenges in terms of valuation compared to its peers.

Risks and Potential Issues

Financial Risk Factors

1. High Debt Levels: Wabtec's long-term debt stands at $3.517 billion, which could pose risks in a rising interest rate environment.

2. Market Volatility: Economic downturns could impact demand for transportation services, affecting revenue.

3. Regulatory Risks: Changes in regulations could impact operational costs and profitability.

4. Supply Chain Disruptions: Ongoing global supply chain issues could affect production and delivery timelines.

Become a Member To View Full Analysis

PAID Members get the additional data in this report such as:

1. Future Earnings Forecasts

2. DCF Chart and potential risk/reward analysis

3. Risk analysis

4. Bear and Bull case analysis

5. Crowdbullscore (1-5) based on the following :

   1. Value Score

   2. DCF Score

   3. ROE Score

   4. ROA Score

   5. D/E Score

   6. P/B Score

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