One-glance verdict
Within fair range
$46.52 our estimate vs market $42.55
Wall Street consensus: $40.00 (-14.0% lower than our fair-value estimate)
9% below our estimate
Fundamentals snapshot
L.B. Foster Company
FSTR · NMS · Industrials · Railroads
Current price
$42.55
52-week range
$21.67 - $45.81
Market cap
$445.02M
Balance sheet
Watch
4.48x Stretched
Net debt $78.95M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
0 Risks
2 rewards · 0 risks
- Reward Returns 6.4% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
What this company does
L.B. Foster Company
L.B. Foster sells the fundamental parts needed for building and maintaining infrastructure, from the steel rails for train tracks to concrete bridge beams and park restrooms. The company's revenue (the money it makes from sales) comes from supplying these materials for large projects. This means its success is often tied to government and private spending on construction and transportation.
How the company got here
L.B. Foster Company was founded in 1902 by Lee B. Foster, who started by reselling used train rails from abandoned tracks to coal mines and logging camps. Over the years, the company expanded beyond just rails, moving into steel products for construction and pipes for the oil industry. A major growth period occurred in the 1970s when a partnership to process pipes for oil rigs proved very successful. After becoming a publicly traded company in 1981, it has continued to grow by acquiring other companies, adding new products like precast concrete buildings and advanced rail monitoring technologies to its portfolio.
What it actually does
L.B. Foster provides essential, engineered products you might see every day without realizing who made them. Think of the steel rails for trains, concrete buildings for restrooms at national parks, or protective coatings on pipelines that transport energy. They also create high-tech systems that monitor the condition of railroad tracks to ensure safety and efficiency. Essentially, the company builds and supports critical infrastructure that helps keep transportation and industry moving.
Rail, Technologies, and Services
This is the company's largest business area, making up a significant portion of its sales. It provides everything needed for railroads, from the physical steel rails and track components to high-tech monitoring systems. Customers include freight and passenger railroads who buy new and used rails, as well as services like 'friction management' (special lubricants and systems that reduce wear and tear on tracks and wheels). This segment also includes advanced technologies that monitor track conditions for safety and help trains run more efficiently.
Infrastructure Solutions
This part of the business focuses on products for major construction and infrastructure projects. A key product line is precast concrete buildings, such as restrooms and concession stands you might find in parks, which are made in a factory and then delivered to the site. This segment also produces steel parts for bridges, protective coatings for pipelines to prevent corrosion, and other custom-engineered products for transportation and energy projects. Its customers are typically engineering and construction firms working on large-scale projects.
What management is betting on now
The company is focused on growing its more profitable, technology-focused businesses. This means investing in innovative rail technologies, like systems that monitor track health in real-time, and expanding its precast concrete product lines. Management has been selling off less profitable, more basic product lines to focus on these higher-margin (the amount of profit made on each dollar of sales) areas. The goal is to be a provider of unique, engineered solutions for infrastructure challenges rather than just a supplier of materials.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$-7.01M
FY2024 Q3
$21.68M
FY2024 Q4
$22.33M
FY2025 Q1
$-28.71M
FY2025 Q2
$7.73M
FY2025 Q3
$26.37M
FY2025 Q4
$19.80M
FY2026 Q1
$-13.40M
Revenue
—
Net income
$1.50M
Diluted EPS
0.14
Operating cash flow
$-10.44M
Free cash flow
$-13.40M
Fetching…
Sources
Revenue
—
Net income
$2.42M
Diluted EPS
0.22
Operating cash flow
$22.17M
Free cash flow
$19.80M
Fetching…
Sources
Revenue
—
Net income
$4.35M
Diluted EPS
0.40
Operating cash flow
$29.18M
Free cash flow
$26.37M
Fetching…
Sources
Revenue
—
Net income
$2.88M
Diluted EPS
0.27
Operating cash flow
$10.40M
Free cash flow
$7.73M
Fetching…
Sources
Revenue
—
Net income
$-2.11M
Diluted EPS
-0.20
Operating cash flow
$-26.14M
Free cash flow
$-28.71M
Fetching…
Sources
Revenue
—
Net income
$-242.00K
Diluted EPS
-0.04
Operating cash flow
$24.29M
Free cash flow
$22.33M
Fetching…
Sources
Revenue
—
Net income
$35.91M
Diluted EPS
3.27
Operating cash flow
$25.16M
Free cash flow
$21.68M
Fetching…
Sources
Revenue
—
Net income
$2.85M
Diluted EPS
0.26
Operating cash flow
$-4.95M
Free cash flow
$-7.01M
Fetching…
Sources
Is it cheap or expensive?
Fair value $46.52 vs current price $42.55
Wall Street consensus is the average analyst price target: $40.00 (-14.0% lower than our fair-value estimate).
Our most-likely fair value is $46.52 a share — about 9.3% away from today's price of $42.55, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $79.0M. Interest coverage 4.5x.
Net debt
$78.95M
Interest coverage
4.48x
L.B. Foster Company's profit covers its interest bill about 4.5 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
FSTR
BASELINE
L.B. Foster Company
Total debt $82.94M Interest coverage 4.48x This is the baseline the peer rows are being compared against.
Total debt $1.02B Interest coverage 3.32x -26% vs FSTR Carries about 1.3x less debt cushion than FSTR.
Total debt $5.39B Interest coverage 1.31x -71% vs FSTR Carries about 3.4x less debt cushion than FSTR.
Total debt $1.88B Interest coverage 4.34x -3% vs FSTR Has roughly the same debt cushion as FSTR.
Total debt $18.69M Interest coverage -60.80x -100% vs FSTR This peer has almost no interest-payment cushion compared with FSTR.
Total debt $392.90M Interest coverage 3.54x -21% vs FSTR Carries about 1.3x less debt cushion than FSTR.
What you should know
The case for and against FSTR
2 Rewards
0 Risks
Rewards
-
Returns 6.4% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
41.31x
Forward P/E
21.49x
P/B
2.53x
P/S
0.79x
EV/EBITDA
12.71x
PEG ratio
0.36x
Profitability
How much profit each dollar creates
Gross margin
21.5%
Operating margin
1.7%
Net margin
2.0%
ROE
6.4%
ROA
5.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.48x
Current ratio
2.22x
Quick ratio
1.17x
Total debt
$82.94M
Total cash
$3.99M
Growth
How the business has been compounding
Revenue TTM
$626.97M
Revenue 5Y CAGR
-27.9%
EPS TTM
1.03
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$51.32M
Free CF TTM
$25.20M
FCF margin
4.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2016-09-07