Westinghouse Air Brake Technologies (WAB) just posted third quarter FY 2025 revenue of about US$2.9b with basic EPS of US$1.81, setting the tone for how the rest of the year could shape up for shareholders focused on earnings power. The company has seen revenue move from US$2.6b in the first quarter of FY 2025 to US$2.9b in the third quarter, while basic EPS has ranged between US$1.88 and US$1.96 over that stretch, giving investors a clear view of how recent quarters compare. With trailing twelve month EPS of US$6.89 and revenue of US$10.8b, the latest print keeps the spotlight squarely on margins and how efficiently those sales are being turned into profit.

See our full analysis for Westinghouse Air Brake Technologies.

With the headline numbers in place, the next step is to set these results against the main narratives around Westinghouse Air Brake Technologies to see which stories the latest margins support and which ones the data starts to question.

Margins Edge Up To 10.9% On TTM Basis

• On a trailing twelve month basis, net profit margin sits at 10.9%, up from 10.2% a year earlier, with net income of about US$1.2b on roughly US$10.8b of revenue.
• Analysts' consensus view links this margin profile to long term shifts toward higher margin services and digital offerings. However, the recent Freight backlog decline and softer North American demand in the narrative sit in contrast to the steady margin move higher, suggesting investors will be watching whether international projects and aftermarket work can keep that 10.9% level intact if the weaker railcar build outlook persists.
  • The consensus narrative points to growing digital and automation revenue, which lines up with TTM earnings rising 11.5% against revenue growth of 5.8%, implying more profit for each dollar of sales than a year ago.
  • At the same time, the narrative flags higher R&D and engineering spend for green and digital tech, so the improved margin today leaves less room for error if those projects take time to translate into additional earnings.

Earnings Growth Outpaces Sales At 11.5%

• Over the last twelve months, earnings grew 11.5% while revenue grew 5.8%, and quarterly net income moved from US$209 million in FY 2024 Q4 to US$309 million in FY 2025 Q3 on revenue rising from US$2.6b to US$2.9b across that span.
• Bulls argue that long term rail modernization, decarbonization and automation should keep supporting this kind of profit expansion, and the data here leans in their favor because earnings growth outpaced revenue and the five year earnings CAGR of 22.5% in the risk and reward summary shows a track record of compounding that is consistent with the narrative of expanding higher margin services and technology.
  • The consensus narrative highlights recurring digital and subscription opportunities, which fits with TTM EPS of US$6.89 being comfortably above the quarterly range of roughly US$1.81 to US$1.96, showing the business has produced solid annualized profit even with some quarter to quarter variation.
  • However, forecasts for about 7.2% annual earnings growth, below broader US market expectations in the dataset, mean the historical 22.5% CAGR cannot be taken as a given, so the bullish case leans heavily on continued margin progress rather than just faster revenue growth.

Over the past year, profit growth has outpaced sales while margins nudged higher, which is exactly the kind of setup bullish investors are watching for in a rail technology name like this, and the detailed narrative breaks down how much of that story is tied to digital, services and modernization versus more traditional equipment cycles. 🐂 Westinghouse Air Brake Technologies Bull Case

Rich 37x P/E Versus 181.33 DCF Value

• The shares trade on a trailing P/E of 37x versus peer and machinery industry averages of 22.2x and 29.7x, and the current price of US$254.42 sits above both the 251.64 analyst price target and the US$181.33 DCF fair value flagged in the analysis.
• Bears focus on that premium and the high debt level in the risk summary, and the combination of a 37x P/E, forecasts for roughly 7% annual earnings and revenue growth and a DCF fair value of US$181.33 gives their caution some grounding because it suggests the market is paying more per dollar of current and forecast earnings than both peers and the modelled intrinsic value imply, while the absence of substantial insider selling over the past three months removes one common red flag but does not change the basic tension between valuation and growth rates in the data.
  • Consensus forecasts in the inputs call for revenue growth of about 7.1% a year and margins rising from 10.9% to 14.2% over several years, which would help justify a premium, but current growth forecasts in the risk summary still trail the broader US market figures given there.
  • With net income at roughly US$1.2b on the TTM numbers and the share price already above the 251.64 target, the bearish narrative finds support in the idea that

    Next Steps

    To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Westinghouse Air Brake Technologies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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    A great starting point for your Westinghouse Air Brake Technologies research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

    See What Else Is Out There

    The recent results highlight a premium 37x P/E, DCF value of US$181.33 and growth forecasts that trail the broader US market figures in the dataset.

    If that mix of rich pricing and modest growth targets feels tight to you, it is a good time to check out 51 high quality undervalued stocks that aim to pair stronger value signals with solid fundamentals.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.