WABTEC CORP (WAB) Stock Fundamental Analysis
NYSE:WAB - New York Stock Exchange, Inc. - US9297401088 - Common Stock - Currency: USD
Taking everything into account, WAB scores 5 out of 10 in our fundamental rating. WAB was compared to 128 industry peers in the Machinery industry. While WAB belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. WAB has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
WAB had positive earnings in the past year.
In the past year WAB had a positive cash flow from operations.
WAB had positive earnings in each of the past 5 years.
In the past 5 years WAB always reported a positive cash flow from operatings.
1.2 Ratios
WAB's Return On Assets of 5.65% is in line compared to the rest of the industry. WAB outperforms 58.59% of its industry peers.
With a Return On Equity value of 10.46%, WAB perfoms like the industry average, outperforming 57.03% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.45%, WAB is in the better half of the industry, outperforming 60.16% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WAB is below the industry average of 10.75%.
The 3 year average ROIC (6.98%) for WAB is below the current ROIC(8.45%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.65% | ||
| ROE | 10.46% | ||
| ROIC | 8.45% |
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
The Profit Margin of WAB (10.17%) is better than 68.75% of its industry peers.
In the last couple of years the Profit Margin of WAB has grown nicely.
With a decent Operating Margin value of 16.04%, WAB is doing good in the industry, outperforming 77.34% of the companies in the same industry.
In the last couple of years the Operating Margin of WAB has grown nicely.
With a Gross Margin value of 32.77%, WAB perfoms like the industry average, outperforming 57.03% of the companies in the same industry.
WAB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.04% | ||
| PM (TTM) | 10.17% | ||
| GM | 32.77% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
WAB has a better debt/assets ratio than last year.
2.2 Solvency
WAB has an Altman-Z score of 3.38. This indicates that WAB is financially healthy and has little risk of bankruptcy at the moment.
WAB has a better Altman-Z score (3.38) than 60.94% of its industry peers.
The Debt to FCF ratio of WAB is 2.45, which is a good value as it means it would take WAB, 2.45 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of WAB (2.45) is better than 71.09% 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.
WAB has a Debt to Equity ratio (0.34) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 2.45 | ||
| Altman-Z | 3.38 |
ROIC/WACC0.86
WACC9.78%
2.3 Liquidity
A Current Ratio of 1.30 indicates that WAB should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.30, WAB is doing worse than 84.38% of the companies in the same industry.
WAB has a Quick Ratio of 1.30. This is a bad value and indicates that WAB is not financially healthy enough and could expect problems in meeting its short term obligations.
WAB's Quick ratio of 0.69 is on the low side compared to the rest of the industry. WAB is outperformed by 85.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
WAB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.98%, which is quite impressive.
The Earnings Per Share has been growing by 12.44% on average over the past years. This is quite good.
Looking at the last year, WAB shows a small growth in Revenue. The Revenue has grown by 7.34% in the last year.
The Revenue has been growing slightly by 4.84% on average over the past years.
EPS 1Y (TTM)26.98%
EPS 3Y20.82%
EPS 5Y12.44%
EPS Q2Q%9.09%
Revenue 1Y (TTM)7.34%
Revenue growth 3Y9.92%
Revenue growth 5Y4.84%
Sales Q2Q%2.26%
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 12.81% yearly.
Based on estimates for the next years, WAB will show a small growth in Revenue. The Revenue will grow by 5.53% on average per year.
EPS Next Y15.2%
EPS Next 2Y13.67%
EPS Next 3Y12.81%
EPS Next 5YN/A
Revenue Next Year5.08%
Revenue Next 2Y5.39%
Revenue Next 3Y5%
Revenue Next 5Y5.53%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WAB is valuated rather expensively with a Price/Earnings ratio of 22.81.
WAB's Price/Earnings is on the same level as the industry average.
WAB's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.63.
The Price/Forward Earnings ratio is 19.80, which indicates a rather expensive current valuation of WAB.
WAB's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of WAB to the average of the S&P500 Index (20.85), we can say WAB is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.81 | ||
| Fwd PE | 19.8 |
4.2 Price Multiples
WAB's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, WAB is valued a bit cheaper than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.05 | ||
| EV/EBITDA | 14.67 |
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.
WAB's earnings are expected to grow with 12.81% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.5
PEG (5Y)1.83
EPS Next 2Y13.67%
EPS Next 3Y12.81%
5. Dividend
5.1 Amount
WAB has a yearly dividend return of 0.59%, which is pretty low.
Compared to an average industry Dividend Yield of 2.12, WAB has a dividend in line with its industry peers.
With a Dividend Yield of 0.59, WAB pays less dividend than the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
5.2 History
The dividend of WAB is nicely growing with an annual growth rate of 7.24%!
WAB has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of WAB decreased recently.
Dividend Growth(5Y)7.24%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
WAB pays out 13.26% of its income as dividend. This is a sustainable payout ratio.
The dividend of WAB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP13.26%
EPS Next 2Y13.67%
EPS Next 3Y12.81%
171.76
+4.7 (+2.81%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners95.12%
Inst Owner Change0.42%
Ins Owners1.05%
Ins Owner Change1.82%
Market Cap29.36B
Analysts77.5
Price Target216.95 (26.31%)
Short Float %1.33%
Short Ratio1.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
Yearly Dividend0.8
Dividend Growth(5Y)7.24%
DP13.26%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.46%
Min EPS beat(2)-3.51%
Max EPS beat(2)4.42%
EPS beat(4)3
Avg EPS beat(4)7.46%
Min EPS beat(4)-3.51%
Max EPS beat(4)25.9%
EPS beat(8)6
Avg EPS beat(8)6.61%
EPS beat(12)8
Avg EPS beat(12)4.42%
EPS beat(16)12
Avg EPS beat(16)4.15%
Revenue beat(2)0
Avg Revenue beat(2)-2.18%
Min Revenue beat(2)-2.31%
Max Revenue beat(2)-2.06%
Revenue beat(4)1
Avg Revenue beat(4)-0.54%
Min Revenue beat(4)-2.31%
Max Revenue beat(4)3.14%
Revenue beat(8)5
Avg Revenue beat(8)1.63%
Revenue beat(12)6
Avg Revenue beat(12)0.63%
Revenue beat(16)7
Avg Revenue beat(16)-0.14%
PT rev (1m)0%
PT rev (3m)1.76%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)0.35%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)0.75%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-1.27%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.81 | ||
| Fwd PE | 19.8 | ||
| P/S | 2.83 | ||
| P/FCF | 18.05 | ||
| P/OCF | 16.01 | ||
| P/B | 2.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.67 |
EPS(TTM)7.53
EY4.38%
EPS(NY)8.67
Fwd EY5.05%
FCF(TTM)9.52
FCFY5.54%
OCF(TTM)10.73
OCFY6.25%
SpS60.76
BVpS59.03
TBVpS-9.08
PEG (NY)1.5
PEG (5Y)1.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.65% | ||
| ROE | 10.46% | ||
| ROCE | 11.17% | ||
| ROIC | 8.45% | ||
| ROICexc | 8.87% | ||
| ROICexgc | 49.38% | ||
| OM | 16.04% | ||
| PM (TTM) | 10.17% | ||
| GM | 32.77% | ||
| FCFM | 15.66% |
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 Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 2.45 | ||
| Debt/EBITDA | 1.6 | ||
| Cap/Depr | 41.15% | ||
| Cap/Sales | 1.99% | ||
| Interest Coverage | 9.2 | ||
| Cash Conversion | 84.56% | ||
| Profit Quality | 154.07% | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | 3.38 |
F-Score8
WACC9.78%
ROIC/WACC0.86
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)26.98%
EPS 3Y20.82%
EPS 5Y12.44%
EPS Q2Q%9.09%
EPS Next Y15.2%
EPS Next 2Y13.67%
EPS Next 3Y12.81%
EPS Next 5YN/A
Revenue 1Y (TTM)7.34%
Revenue growth 3Y9.92%
Revenue growth 5Y4.84%
Sales Q2Q%2.26%
Revenue Next Year5.08%
Revenue Next 2Y5.39%
Revenue Next 3Y5%
Revenue Next 5Y5.53%
EBIT growth 1Y21.69%
EBIT growth 3Y20.27%
EBIT growth 5Y18.05%
EBIT Next Year26.37%
EBIT Next 3Y12.93%
EBIT Next 5YN/A
FCF growth 1Y60.3%
FCF growth 3Y19.94%
FCF growth 5Y14.4%
OCF growth 1Y52.71%
OCF growth 3Y19.56%
OCF growth 5Y12.55%