We assign a fundamental rating of 4 out of 10 to RAIL. RAIL was compared to 132 industry peers in the Machinery industry. While RAIL is still in line with the averages on profitability rating, there are concerns on its financial health. RAIL scores decently on growth, while it is valued quite cheap. This could make an interesting combination.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

RAIL had positive earnings in the past year.
In the past year RAIL had a positive cash flow from operations.
In the past 5 years RAIL always reported negative net income.
In multiple years RAIL reported negative operating cash flow during the last 5 years.

1.2 Ratios

RAIL has a better Return On Assets (25.56%) than 100.00% of its industry peers.
RAIL's Return On Invested Capital of 14.35% is amongst the best of the industry. RAIL outperforms 85.61% of its industry peers.

		Industry Rank	Sector Rank
ROA	25.56%
ROE	N/A
ROIC	14.35%

ROA(3y)-20.78%

ROA(5y)-25.83%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

RAIL has a better Profit Margin (16.97%) than 92.42% of its industry peers.
RAIL has a Operating Margin (7.36%) which is in line with its industry peers.
With a Gross Margin value of 15.09%, RAIL is not doing good in the industry: 81.06% of the companies in the same industry are doing better.
RAIL's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	7.36%
PM (TTM)	16.97%
GM	15.09%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y28.39%

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RAIL is creating some value.
Compared to 1 year ago, RAIL has more shares outstanding
RAIL has more shares outstanding than it did 5 years ago.
The debt/assets ratio for RAIL is higher compared to a year ago.

2.2 Solvency

RAIL has an Altman-Z score of 1.81. This is a bad value and indicates that RAIL is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.81, RAIL is not doing good in the industry: 71.21% of the companies in the same industry are doing better.
RAIL has a debt to FCF ratio of 5.51. This is a neutral value as RAIL would need 5.51 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.51, RAIL is in line with its industry, outperforming 52.27% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	5.51
Altman-Z	1.81

ROIC/WACC1.61

WACC8.93%

2.3 Liquidity

RAIL has a Current Ratio of 1.66. This is a normal value and indicates that RAIL is financially healthy and should not expect problems in meeting its short term obligations.
RAIL has a Current ratio of 1.66. This is in the lower half of the industry: RAIL underperforms 65.91% of its industry peers.
A Quick Ratio of 0.88 indicates that RAIL may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.88, RAIL is doing worse than 70.45% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.66
Quick Ratio	0.88

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

RAIL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 662.50%, which is quite impressive.
Looking at the last year, RAIL shows a decrease in Revenue. The Revenue has decreased by -6.42% in the last year.
The Revenue has been growing by 19.45% on average over the past years. This is quite good.

EPS 1Y (TTM)662.5%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%200%

Revenue 1Y (TTM)-6.42%

Revenue growth 3Y40.18%

Revenue growth 5Y19.45%

Sales Q2Q%41.73%

3.2 Future

The Earnings Per Share is expected to grow by 25.75% on average over the next years. This is a very strong growth
RAIL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.26% yearly.

EPS Next Y55.83%

EPS Next 2Y43.82%

EPS Next 3Y37.62%

EPS Next 5Y25.75%

Revenue Next Year-9.34%

Revenue Next 2Y3.58%

Revenue Next 3Y6.71%

Revenue Next 5Y8.26%

3.3 Evolution

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 18.87, the valuation of RAIL can be described as rather expensive.
Based on the Price/Earnings ratio, RAIL is valued a bit cheaper than 78.03% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.32, RAIL is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.46, which indicates a correct valuation of RAIL.
82.58% of the companies in the same industry are more expensive than RAIL, based on the Price/Forward Earnings ratio.
RAIL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.57.

		Industry Rank	Sector Rank
PE	18.87
Fwd PE	15.46

4.2 Price Multiples

RAIL's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. RAIL is cheaper than 94.70% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RAIL indicates a rather cheap valuation: RAIL is cheaper than 94.70% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	8.07
EV/EBITDA	6.99

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as RAIL's earnings are expected to grow with 37.62% in the coming years.