Westinghouse Air Brake Technologies Corp (WAB) stock analysis

P/E above its 5-year median

Westinghouse Air Brake Technologies's P/E of 37.8 is above its own 5-year median of 31.0.

P/E above the industry

Westinghouse Air Brake Technologies's P/E of 37.8 is above the Transportation Equipment median of 20.3.

EV/EBITDA above its 5-year median

Westinghouse Air Brake Technologies's EV/EBITDA of 21.4 is above its 5-year median of 16.3.

P/B above the industry

Westinghouse Air Brake Technologies's price-to-book of 4.50 is above the Transportation Equipment median of 1.85.

Trading above fair value

The share price of $304.18 is above our fair value estimate of $178.51.

Margin of safety under 20%

The price is 70.4% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 10.1% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 25.4% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 15.9% over the last twelve months, against a 5-year average of 23.1% a year.

Growing faster than the industry

Revenue grew 13.2% over the last twelve months; the Transportation Equipment median is 9.5%.

Guidance raised

Westinghouse Air Brake Technologies raised its 2026 revenue outlook on Jul 22, 2026.

Gross margin improving

Gross margin was 35.6% over the last twelve months, against 33.7% a year earlier.

Return on equity under 15%

Return on equity was 12.2% over the last twelve months and averaged 8.2% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.5%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Westinghouse Air Brake Technologies's return on equity of 12.2% is above the Transportation Equipment median of 2.7%.

Earnings grew over 5 years

Net income grew 23.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 11.2% over the last twelve months, against a 5-year average of 8.8%.

Net margin above the industry

Westinghouse Air Brake Technologies's net margin of 11.2% is above the Transportation Equipment median of 1.9%.

High debt

Debt is 56.3% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 41.9% five years ago to 56.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 32.7% of total debt.

Interest well covered

Operating income covers interest expense 7.0 times.

Short-term assets cover short-term debts

Current assets are 1.10 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.75; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Westinghouse Air Brake Technologies paid dividends worth 0.4% of the share price over the last twelve months.

Yield below Treasuries

The 0.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Westinghouse Air Brake Technologies yields 0.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 14.7% of net income.

Covered by free cash flow

Dividends take 11.3% of free cash flow.