WABTEC CORP (WAB) Stock Fundamental Analysis
NYSE:WAB - New York Stock Exchange, Inc. - US9297401088 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to WAB. WAB was compared to 128 industry peers in the Machinery industry. WAB has an excellent profitability rating, but there are some minor concerns on its financial health. WAB is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WAB was profitable.
WAB had a positive operating cash flow in the past year.
In the past 5 years WAB has always been profitable.
Each year in the past 5 years WAB had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 5.79%, WAB is doing good in the industry, outperforming 60.16% of the companies in the same industry.
Looking at the Return On Equity, with a value of 10.67%, WAB is in line with its industry, outperforming 56.25% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.65%, WAB is in line with its industry, outperforming 59.38% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WAB is below the industry average of 10.69%.
The 3 year average ROIC (6.98%) for WAB is below the current ROIC(8.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.79% | ||
| ROE | 10.67% | ||
| ROIC | 8.65% |
ROA(3y)4.45%
ROA(5y)3.72%
ROE(3y)8.17%
ROE(5y)6.81%
ROIC(3y)6.98%
ROIC(5y)5.93%
1.3 Margins
With a decent Profit Margin value of 10.53%, WAB is doing good in the industry, outperforming 71.09% of the companies in the same industry.
In the last couple of years the Profit Margin of WAB has grown nicely.
The Operating Margin of WAB (16.53%) is better than 76.56% of its industry peers.
In the last couple of years the Operating Margin of WAB has grown nicely.
With a Gross Margin value of 33.20%, WAB perfoms like the industry average, outperforming 56.25% of the companies in the same industry.
In the last couple of years the Gross Margin of WAB has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.53% | ||
| PM (TTM) | 10.53% | ||
| GM | 33.2% |
OM growth 3Y9.42%
OM growth 5Y12.6%
PM growth 3Y12.67%
PM growth 5Y20.68%
GM growth 3Y1.91%
GM growth 5Y3.36%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WAB is destroying value.
Compared to 1 year ago, WAB has less shares outstanding
WAB has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WAB has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.68 indicates that WAB is not in any danger for bankruptcy at the moment.
WAB's Altman-Z score of 3.68 is fine compared to the rest of the industry. WAB outperforms 60.94% of its industry peers.
The Debt to FCF ratio of WAB is 2.72, which is a good value as it means it would take WAB, 2.72 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of WAB (2.72) is better than 68.75% of its industry peers.
WAB has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.34, WAB perfoms like the industry average, outperforming 59.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 2.72 | ||
| Altman-Z | 3.68 |
ROIC/WACC0.89
WACC9.67%
2.3 Liquidity
WAB has a Current Ratio of 1.34. This is a normal value and indicates that WAB is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.34, WAB is doing worse than 82.03% of the companies in the same industry.
A Quick Ratio of 0.73 indicates that WAB may have some problems paying its short term obligations.
The Quick ratio of WAB (0.73) is worse than 82.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
WAB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.10%, which is quite impressive.
WAB shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.44% yearly.
WAB shows a small growth in Revenue. In the last year, the Revenue has grown by 5.21%.
WAB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.84% yearly.
EPS 1Y (TTM)21.1%
EPS 3Y20.82%
EPS 5Y12.44%
EPS Q2Q%20.63%
Revenue 1Y (TTM)5.21%
Revenue growth 3Y9.92%
Revenue growth 5Y4.84%
Sales Q2Q%4.53%
3.2 Future
WAB is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.19% yearly.
The Revenue is expected to grow by 5.53% on average over the next years.
EPS Next Y16.99%
EPS Next 2Y14.25%
EPS Next 3Y13.19%
EPS Next 5YN/A
Revenue Next Year4.83%
Revenue Next 2Y5.39%
Revenue Next 3Y5.04%
Revenue Next 5Y5.53%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.98, WAB can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as WAB.
The average S&P500 Price/Earnings ratio is at 27.47. WAB is around the same levels.
A Price/Forward Earnings ratio of 21.74 indicates a rather expensive valuation of WAB.
The rest of the industry has a similar Price/Forward Earnings ratio as WAB.
When comparing the Price/Forward Earnings ratio of WAB to the average of the S&P500 Index (21.91), we can say WAB is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.98 | ||
| Fwd PE | 21.74 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WAB.
WAB's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.86 | ||
| EV/EBITDA | 17.84 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of WAB may justify a higher PE ratio.
A more expensive valuation may be justified as WAB's earnings are expected to grow with 13.19% in the coming years.
PEG (NY)1.59
PEG (5Y)2.17
EPS Next 2Y14.25%
EPS Next 3Y13.19%
5. Dividend
5.1 Amount
WAB has a yearly dividend return of 0.47%, which is pretty low.
Compared to an average industry Dividend Yield of 1.81, WAB has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, WAB's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
5.2 History
On average, the dividend of WAB grows each year by 7.24%, which is quite nice.
WAB has paid a dividend for at least 10 years, which is a reliable track record.
WAB has decreased its dividend recently.
Dividend Growth(5Y)7.24%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
13.29% of the earnings are spent on dividend by WAB. This is a low number and sustainable payout ratio.
The dividend of WAB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP13.29%
EPS Next 2Y14.25%
EPS Next 3Y13.19%
213.66
-0.09 (-0.04%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners94.63%
Inst Owner Change0%
Ins Owners0.65%
Ins Owner Change1%
Market Cap36.56B
Analysts76.47
Price Target216.12 (1.15%)
Short Float %1.23%
Short Ratio2.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
Yearly Dividend0.8
Dividend Growth(5Y)7.24%
DP13.29%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.93%
Min EPS beat(2)-3.51%
Max EPS beat(2)11.37%
EPS beat(4)3
Avg EPS beat(4)3.82%
Min EPS beat(4)-3.51%
Max EPS beat(4)11.37%
EPS beat(8)6
Avg EPS beat(8)7.26%
EPS beat(12)9
Avg EPS beat(12)5.39%
EPS beat(16)12
Avg EPS beat(16)4.7%
Revenue beat(2)0
Avg Revenue beat(2)-1.67%
Min Revenue beat(2)-2.31%
Max Revenue beat(2)-1.02%
Revenue beat(4)0
Avg Revenue beat(4)-1.58%
Min Revenue beat(4)-2.31%
Max Revenue beat(4)-0.94%
Revenue beat(8)4
Avg Revenue beat(8)1.2%
Revenue beat(12)6
Avg Revenue beat(12)0.85%
Revenue beat(16)7
Avg Revenue beat(16)-0.07%
PT rev (1m)1.71%
PT rev (3m)-0.38%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)-0.73%
EPS NY rev (1m)0.31%
EPS NY rev (3m)1.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.14%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.98 | ||
| Fwd PE | 21.74 | ||
| P/S | 3.48 | ||
| P/FCF | 24.86 | ||
| P/OCF | 21.62 | ||
| P/B | 3.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.84 |
EPS(TTM)7.92
EY3.71%
EPS(NY)9.83
Fwd EY4.6%
FCF(TTM)8.6
FCFY4.02%
OCF(TTM)9.88
OCFY4.62%
SpS61.36
BVpS60.59
TBVpS-7.66
PEG (NY)1.59
PEG (5Y)2.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.79% | ||
| ROE | 10.67% | ||
| ROCE | 11.44% | ||
| ROIC | 8.65% | ||
| ROICexc | 9.07% | ||
| ROICexgc | 47.01% | ||
| OM | 16.53% | ||
| PM (TTM) | 10.53% | ||
| GM | 33.2% | ||
| FCFM | 14.01% |
ROA(3y)4.45%
ROA(5y)3.72%
ROE(3y)8.17%
ROE(5y)6.81%
ROIC(3y)6.98%
ROIC(5y)5.93%
ROICexc(3y)7.29%
ROICexc(5y)6.18%
ROICexgc(3y)42.04%
ROICexgc(5y)35.85%
ROCE(3y)9.23%
ROCE(5y)7.84%
ROICexcg growth 3Y23.75%
ROICexcg growth 5Y18.66%
ROICexc growth 3Y22.7%
ROICexc growth 5Y19.49%
OM growth 3Y9.42%
OM growth 5Y12.6%
PM growth 3Y12.67%
PM growth 5Y20.68%
GM growth 3Y1.91%
GM growth 5Y3.36%
F-Score8
Asset Turnover0.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 2.72 | ||
| Debt/EBITDA | 1.57 | ||
| Cap/Depr | 44% | ||
| Cap/Sales | 2.1% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.63% | ||
| Profit Quality | 133% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.73 | ||
| Altman-Z | 3.68 |
F-Score8
WACC9.67%
ROIC/WACC0.89
Cap/Depr(3y)35.76%
Cap/Depr(5y)32.52%
Cap/Sales(3y)1.9%
Cap/Sales(5y)1.83%
Profit Quality(3y)139.69%
Profit Quality(5y)149.06%
High Growth Momentum
Growth
EPS 1Y (TTM)21.1%
EPS 3Y20.82%
EPS 5Y12.44%
EPS Q2Q%20.63%
EPS Next Y16.99%
EPS Next 2Y14.25%
EPS Next 3Y13.19%
EPS Next 5YN/A
Revenue 1Y (TTM)5.21%
Revenue growth 3Y9.92%
Revenue growth 5Y4.84%
Sales Q2Q%4.53%
Revenue Next Year4.83%
Revenue Next 2Y5.39%
Revenue Next 3Y5.04%
Revenue Next 5Y5.53%
EBIT growth 1Y15.27%
EBIT growth 3Y20.27%
EBIT growth 5Y18.05%
EBIT Next Year27.09%
EBIT Next 3Y12.86%
EBIT Next 5YN/A
FCF growth 1Y112.88%
FCF growth 3Y19.94%
FCF growth 5Y14.4%
OCF growth 1Y98.47%
OCF growth 3Y19.56%
OCF growth 5Y12.55%