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what it is
Wabtec sells the brakes, compressors, electronics, and services that keep freight trains and transit systems moving.
how it gets paid
Last year Wabtec made $11.2B in revenue. Freight division was the main engine at $8.1B, or 72% of sales.
why it's growing
Revenue grew 7.5% last year. The key number was 34.6% gross margin, because margin tells you whether pricing power is real or just a temporary volume sugar rush.
what just happened
Wabtec posted $2.10 EPS in the last reported quarter, beating the $2.08 consensus while keeping backlog at record levels.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
95/100 earnings predictability — you can trust these numbers
26.1x trailing p/e — priced about right
0.5% dividend yield — cash in your pocket every quarter
16.0% return on capital — solid for heavy industrial equipment
xvary composite: 69/100 — average
What they do
Wabtec sells the brakes, compressors, electronics, and services that keep freight trains and transit systems moving.
If your railroad uses Wabtec brakes, compressors, and onboard electronics, ripping them out is a headache that touches safety, maintenance, and downtime. Freight made up ~72% of sales on the $8.1B / $11.2B split in the bridge, and those parts need service long after the first sale. Switching costs (expensive hassle of changing suppliers) are real here, so what: you get repeat revenue from equipment customers do not casually replace.
How they make money
$11.2B
annual revenue · their business grew +7.5% last year
Freight division
$8.1B
n/a
Transit division
$3.1B
n/a
The products that matter
freight rail equipment and services
Freight
$2.09B last quarter · +8.4%
freight is the larger engine right now, generating $2.09B last quarter. equipment sales and digital intelligence services helped push growth to 8.4% from a year ago.
largest segment here
transit rail equipment and services
Transit
$793M last quarter · +8.2%
transit is smaller at $793M last quarter, but it still grew 8.2% from a year ago. higher original equipment and aftermarket volume did the work.
second engine
Key numbers
16.0%
return on capital
Return on capital → profit earned on money invested → so what: Wabtec is turning installed rail assets into solid returns, not just more revenue.
26.1x
trailing p/e
P/E → price compared with earnings → so what: you are not buying cheap industrial plumbing here.
$5.4B
long-term debt
Debt → money the company owes → so what: it is manageable at 12% of capital, but it still narrows flexibility.
95
earnings predictability
Predictability → how steady profits tend to be → so what: this is a more dependable industrial than the average cycle hostage.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 85 / 100
- long-term debt $5.4B (12% of capital)
- net profit margin 16.6% net margin (~16.6¢/$ sales)—not the 16.0% return on capital in the glance strip.
- return on equity 20% — $0.20 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in WAB 3 years ago → it's now worth $22,520.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Wabtec posted $2.10 EPS in the last reported quarter, beating the $2.08 consensus while keeping backlog at record levels.
Annual revenue reached $11.2 billion, up 7.5% vs. prior year, and gross margin was 34.6%. In the third quarter, revenue rose 8.4% to $2.89 billion, with Freight up 8.4% and Transit up 8.2%.
$2.89B
Q revenue (example Q)
$2.10
eps (Q)
34.6%
gross margin (see detail)
the number that mattered
The key number was 34.6% gross margin, because margin tells you whether pricing power is real or just a temporary volume sugar rush.
-
recall, third-quarter revenues increased about 8.4% from the comparable year-ago period, reaching $2.89 billion.
-
vs. prior year top-line growth was similar between its two operating segments.
-
freight revenues climbed 8.4%, to $2.09 billion and transit advanced 8.2% to $793 million.specifically, the freight business benefited from equipment sales and digital intelligence services. meanwhile, the transit segment was driven by higher original equipment and aftermarket volumes amid rising passenger ridership and infrastructure projects in regions like europe and india.
-
the company’s backlog continued to reach new records.a robust order pipeline and strong backlog ought to support top-line growth for the foreseeable future.
-
the 12-month backlog grew 8.4%, to $8.27 billion, while the multi-year backlog hit $25.58 billion, up 15% vs. prior year.this includes large contracts such as a $4.2 billion deal with kazakhstan’s national railway for locomotives and services over the next 10 to 15 years, plus mining and transit orders.
source: company earnings report, 2026
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What could go wrong
the #1 risk is backlog conversion and rail order slowdown.
med
backlog rollover
the bull case leans heavily on record backlog. if that $8.27B 12-month figure or the $25.58B multi-year backlog stops growing, the visibility premium starts to fade.
you are paying 26.1x trailing earnings in part because demand looks locked in. less backlog means less forgiveness.
med
tariffs and input costs
wabtec builds complex rail equipment with global components. tariff changes or supply disruption can push costs higher before pricing catches up.
on a 15.1% net margin, even modest cost pressure matters. there is room here, just not endless room.
med
transit project lumpiness
transit produced $793M last quarter, far smaller than freight at $2.09B. big project timing can make a healthy business look choppy for a quarter or two.
that does not automatically break the thesis, but it can pressure sentiment when the stock is near its high.
med
premium multiple on an industrial
WAB sits at $233.69 versus a 52-week high of $236 and trades at 26.1x trailing earnings. this is a quality name, not a cheap one.
if growth cools from the recent 7.5% annual pace, the stock can de-rate even if the business stays good.
record backlog is the cushion. at 26.1x earnings and near the top of the range, you need that cushion to keep looking real.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
backlog trajectory
the $8.27B 12-month backlog and $25.58B multi-year backlog are doing a lot of work in this story. if they stop climbing, the market will notice.
calendar
next earnings report
estimated earnings date is wednesday, april 2026. you want to see whether backlog and segment growth still move together.
metric
freight vs. transit growth gap
freight grew 8.4% last quarter and transit grew 8.2%. if one starts carrying all the growth, the diversification story gets weaker.
risk
margin resilience
the full-year net margin is 15.1%, but last quarter came in at 10.7%. watch whether that gap reflects normal mix or early cost pressure.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts expect WAB to do better than most stocks over the next 12 months.
risk profile
average
stability score 3 — this is not a bunker stock, but it is not a chaos stock either.
chart momentum
average
technical score 3 — the chart is constructive, but it is not screaming something the fundamentals do not already say.
earnings predictability
95 / 100
management has earned trust. the earnings line usually behaves like an industrial machine, not a startup mood swing.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 451 buyers vs. 482 sellers in 3q2025. total institutional holdings: 0.2B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$193
$354
$234
current price
$274
target midpoint · +17% from current · 3-5yr high: $370 (+60% · 13% ann'l return)
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