WAB  Wabtec Corporation

Exchange

NYSE

Sector

Capital Goods

Industry

Railroads

Market Cap.

7.82B

Vuru Grade

65.11/100

Current Price

$87.77
-0.28 (-0.32%)

Growth Price

$68.36
Overvalued by 22.11%

Stability Price

$49.54
Overvalued by 43.56%

Company Metrics

  • P/E 22.09
  • P/S 2.61
  • P/B 4.54
  • EPS 3.97
  • Cash ROIC 14.98%
  • Cash Ratio 0.34
  • Dividend 0.4 / 0.45%
  • Avg. Vol. 793,792.00
  • Shares 89.10M
  • Market Cap. 7.82B

Company Description

Westinghouse Air Brake Technologies Corporation, doing business as Wabtec Corporation, provides technology-based products and services for the freight rail and passenger transit industries worldwide. The company's Freight Group manufactures and services components for new and existing freight cars and locomotives; builds new switcher locomotives; and rebuilds freight locomotives; supplies railway ... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Sluggish Conditions Continue to Derail Westinghouse Air Brake Technologies ...
Motley Fool - Oct 25, 2016
The sluggish global economy continues to impact Westinghouse Air Brake Technologies' (NYSE:WAB), or Wabtec, financial results.
Westinghouse Air Brake Technologies (WAB) Q3 2016 Results - Earnings Call ... - Seeking Alpha
Challenging Conditions Cause Westinghouse Air Brake Technologies Corp's Sales ...
Motley Fool - Apr 26, 2016
Global economic and currency headwinds continued to plague Westinghouse Air Brake Technologies (NYSE:WAB), or Wabtec, during the first quarter.
Westinghouse Air Brake Technologies Corp Hits the Brakes on Costs
Motley Fool - Feb 18, 2016
While momentum within the global economy is continuing to slow, it is still pushing forward. That was evident in Westinghouse Air Brake Technologies' (NYSE:WAB), or Wabtec's, fourth-quarter earnings report, which was released before the market opened ...
Westinghouse Air Brake Technologies Corporation (WAB) Ex-Dividend Date ...
Nasdaq - Feb 7, 2017
Westinghouse Air Brake Technologies Corporation ( WAB ) will begin trading ex-dividend on February 08, 2017. A cash dividend payment of $0.1 per share is scheduled to be paid on February 24, 2017.
Westinghouse Air Brake Technologies Corporation (wab) To Go Ex-Dividend on ... - Sports Perspectives
Stock Returns: PACCAR Inc (NASDAQ:PCAR) versus Westinghouse Air Brake ... - CML News
Option Market: Westinghouse Air Brake Technologies Corporation Risk Hits A ...
CML News - Feb 18, 2017
In the "Why This Matters" section at the end of this article on Westinghouse Air Brake Technologies Corporation (NYSE:WAB) we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option ...
3 Things to Watch When Westinghouse Air Brake Technologies Corp. Reports Earnings
Motley Fool - Feb 16, 2016
Despite the impact weaker commodity prices and the slowing global economy is having on the rail industry, Westinghouse Air Brake Technologies (NYSE:WAB), or Wabtec, had a fairly solid year in 2015, at least through the first three quarters. What ...
Global Economic Headwinds Derail Westinghouse Air Brake Technologies Corp.'s ...
Motley Fool - Jul 25, 2016
The global economic and currency headwinds that had been plaguing Westinghouse Air Brake Technologies (NYSE:WAB), or Wabtec, over the past few quarters strengthened in the second quarter.
Analysts Set Westinghouse Air Brake Technologies Corporation (WAB) Target ...
The Cerbat Gem - Feb 18, 2017
Westinghouse Air Brake Technologies Corporation logo Westinghouse Air Brake Technologies Corporation (NYSE:WAB) has received a consensus rating of “Buy” from the eight brokerages that are presently covering the stock.
The Westinghouse Air Brake Technologies Corporation (WAB) Receives Average ... - DailyQuint
Westinghouse Air Brake Technologies Corporation (WAB) Set to Announce ... - BNB Daily (blog)
What to Watch When Westinghouse Air Brake Technologies Corp. Reports Earnings
Motley Fool - Apr 22, 2016
While Westinghouse Air Brake Technologies (NYSE:WAB), or Wabtec, faced challenges in some of its key markets last year, the company expects to deliver record results in 2016.
Moody's assigns Baa3 rating to Wabtec's new senior unsecured notes
Moodys.com (press release) (subscription) - Oct 31, 2016
New York, October 31, 2016 -- Moody's Investors Service ("Moody's") assigned a Baa3 rating to the new senior unsecured notes due 2026 that Westinghouse Air Brake Technologies Corporation ("Wabtec") plans to issue to help fund the $1.7 billion ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for WAB to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate WAB's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$87.77 Current Price

$68.36 Growth Price (DCF)

Overvalued by 22.11%


Growth Rate Assumed by Market: 21.32%


Future Free Cash Flow Growth Rate: 13.4%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$49.54 Stability Price (EPV)

Overvalued by 43.56%


Discount Rate: 15.0%

$0.13 NCA Price

Overvalued by 99.85%

$69.18 Book Price

Overvalued by 21.18%


Satisfactory Cash Return on Invested Capital over the past 5 years

WAB has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely WAB could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

WAB has created $14.98 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 210.66M 201.44M 194.42M 424.72M 398.83M
divided by
Invested Capital 1.33B 1.58B 1.96B 2.14B 2.41B
Cash ROIC 15.82% 12.73% 9.94% 19.85% 16.55%

Excellent Return on Equity over the past 5 years

Over the past 5 years, WAB has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

WAB has generated $19.47 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 170.15M 251.73M 292.24M 351.68M 398.63M
divided by
Stockholders' Equity 1.05B 1.28B 1.59B 1.81B 1.70B
Return on Equity 16.28% 19.72% 18.43% 19.46% 23.45%

Excellent Business Performance over the past 10 years

WAB has been able to maintain profitability in good times and bad. This could mean WAB has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

WAB has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 130.09M 122.09M 139.67M 142.23M 155.29M 210.66M 201.44M 194.42M 424.72M 398.83M

Good Balance Sheet

WAB's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 187.98M 234.69M 141.81M 188.66M 236.94M 285.62M 215.77M 285.76M 425.85M 226.19M
Current Assets 547.19M 665.77M 725.35M 689.51M 801.95M 1.06B 1.09B 1.33B 1.64B 1.61B
Total Assets 972.84M 1.16B 1.51B 1.59B 1.80B 2.16B 2.35B 2.82B 3.30B 3.30B
Current Liabilities 243.79M 295.24M 388.05M 305.35M 348.37M 541.39M 553.06M 579.40M 738.80M 664.78M
Total Liabilities 502.95M 541.43M 862.15M 808.93M 903.31M 1.11B 1.07B 1.24B 1.50B 1.60B
Stockholder' Equity 469.89M 617.27M 645.37M 776.91M 899.77M 1.05B 1.28B 1.59B 1.81B 1.70B
Current Ratio 2.24 2.26 1.87 2.26 2.30 1.95 1.98 2.30 2.22 2.43
TL-to-TA 0.52 0.47 0.57 0.51 0.50 0.52 0.46 0.44 0.45 0.49

Consistent Reinvestment of Profits over the past 10 years

WAB has consistently retained profits. This may put WAB in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, WAB can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 419.60M 524.54M 653.08M 766.22M 887.41M 1.05B 1.30B 1.58B 1.91B 2.28B
Retained Earnings Growth - 25.01% 24.51% 17.32% 15.82% 18.74% 23.16% 21.49% 21.08% 19.47%

Competitive Industry over the past 10 years

WAB is likely operating in an industry with medium to low barriers to entry. This may mean that WAB doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that WAB invests heavily in R&D and Sales, General & Administrative expenses.

Only $9.47 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 84.80M 109.57M 130.55M 115.06M 123.10M 170.15M 251.73M 292.24M 351.68M 398.63M
divided by
Revenue 1.09B 1.36B 1.57B 1.40B 1.51B 1.97B 2.39B 2.57B 3.04B 3.31B
Net Profit Margin 7.80% 8.06% 8.29% 8.21% 8.17% 8.65% 10.53% 11.39% 11.55% 12.05%

Inconsistent Gross Profit Margins over the past 10 years

WAB has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$35.88 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 296.78M 369.62M 427.19M 393.33M 449.08M 1.93B 694.57M 764.03M 935.98M 1.05B
divided by
Revenue 1.09B 1.36B 1.57B 1.40B 1.51B 1.97B 2.39B 2.57B 3.04B 3.31B
Gross Margin 27.29% 27.18% 27.13% 28.06% 29.80% 98.11% 29.05% 29.77% 30.74% 31.68%

Low Capital Intensity over the past 10 years

WAB has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that WAB may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

16.79% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 20.94M 20.42M 19.72M 18.29M 20.84M 37.97M 36.00M 41.24M 47.66M 49.43M
divided by
Net Income 84.80M 109.57M 130.55M 115.06M 123.10M 170.15M 251.73M 292.24M 351.68M 398.63M
Capital Expenditure Ratio 24.69% 18.64% 15.10% 15.90% 16.93% 22.32% 14.30% 14.11% 13.55% 12.40%

Very Strong Dividend History over the past 10 years

WAB has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests WAB is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid 1.95M 1.94M 1.94M 1.92M 1.91M 3.85M 7.67M 12.64M 19.25M 26.96M
divided by
Shares Outstanding 49.11M 49.14M 48.85M 47.98M 48.01M 48.33M 96.74M 96.83M 96.89M 97.01M
Dividend Paid Per Share 0.04 0.04 0.04 0.04 0.04 0.08 0.08 0.13 0.20 0.28
Price at Year End 30.20 34.69 38.76 41.19 53.15 69.92 86.75 74.15 88.06 71.19
Dividend Yield 0.13% 0.11% 0.10% 0.10% 0.08% 0.11% 0.09% 0.18% 0.23% 0.39%

History of Stock Buybacks over the past 10 years

WAB has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 49.11M 49.14M 48.85M 47.98M 48.01M 48.33M 96.74M 96.83M 96.89M 97.01M
Stock Bought Back - -0.07% 0.60% 1.81% -0.06% -0.67% -50.04% -0.09% -0.05% -0.12%
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