Key Takeaways The Transportation - Equipment and Leasing industry lags the S&P 500 and broader sector.GBX, R, and AL reward investors with dividends and share buybacks, showing solid financial strength.Dividend-paying stocks are less susceptible to market swings and act as a hedge against economic uncertainty The Zacks  Transportation - Equipment and Leasing industry is currentlynavigating a challenging macroeconomic environment. The industry grapples with challenges due to persistent inflation, tariff-rela ...

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage growth companies [1][2][3] Valuation Metrics - The P/S ratio compares a company's market capitalization to its revenues, providing a clearer picture of value when earnings are minimal or volatile [2][5] - A P/S ratio below 1 indicates a good bargain, as investors pay less than a dollar for each dollar of revenue generated [6] - The P/S ratio is preferred over the price-to-earnings (P/E) ratio due to the difficulty of manipulating sales figures compared to earnings [7][8] Investment Opportunities - Companies such as Precision Drilling (PDS), The Greenbrier Companies, Inc. (GBX), Green Dot (GDOT), The Mosaic Company (MOS), and PagSeguro Digital (PAGS) exhibit low P/S ratios and potential for higher returns [4][10] - Low P/S stocks can reveal hidden strengths when earnings are volatile or growth is in early stages [10] Company Profiles - **Precision Drilling (PDS)**: Focuses on optimizing operational performance in the oil and gas sector, with a positive long-term outlook supported by upcoming LNG facilities and pipeline expansions. Currently holds a Value Score of A and Zacks Rank 1 [12][13] - **The Greenbrier Companies, Inc. (GBX)**: A leading supplier in global freight transportation, benefiting from strong market demand and a profitable leasing business. Holds a Value Score of A and Zacks Rank 2 [14][15] - **Green Dot (GDOT)**: A pro-consumer bank holding company with a strong position in prepaid cards and Banking-as-a-Service (BaaS). It has low debt and significant cash reserves, currently holding a Value Score of A and Zacks Rank 1 [16][17] - **The Mosaic Company (MOS)**: A major producer of phosphate and potash, experiencing strong demand in agriculture. The company is focused on cost-cutting and maintaining a strong operating cost structure, with a Value Score of A and Zacks Rank 1 [18][20] - **PagSeguro Digital (PAGS)**: Offers a range of financial solutions in Brazil, focusing on digital banking and payment services. The company is well-positioned for growth with a disciplined strategy, holding a Value Score of A and Zacks Rank 2 [21][22]

Core Insights - The Greenbrier Companies (GBX) is experiencing strong operational efficiency and shareholder-friendly initiatives, leading to impressive stock performance [1] Earnings Estimates - The Zacks Consensus Estimate for GBX's earnings per share has been revised upward by 28.16% for the current year and by 2.78% for 2026, indicating broker confidence [2] - Estimates for GBX's 2025 earnings have risen by 28%, further reflecting brokers' confidence in growth [7] Price Performance - GBX shares have increased by 3.2% over the past 90 days, outperforming the Zacks Transportation - Equipment and Leasing industry's decline of 0.2% [3][7] Earnings Surprise History - Greenbrier has a positive earnings surprise history, exceeding the Zacks Consensus Estimate in each of the last three quarters with an average surprise of 70% [5] Industry Rank - The industry to which Greenbrier belongs has a Zacks Industry Rank of 51 out of 246, placing it in the top 21% of Zacks Industries, which is crucial for stock performance [6] Growth Factors - Greenbrier's operational efficiency initiatives have led to a strong third quarter with an 18% gross margin and nearly $140 million in operating cash flow, supported by disciplined cost controls and improved working capital [8] - The company has a lease fleet utilization rate of 98% and a railcar backlog of $2.5 billion, positioning it well for future growth [8] Strategic Moves - Greenbrier is closing a European facility, expected to save $10 million annually, and has extended $850 million in credit facilities, enhancing operational efficiency and financial flexibility [9] - The company has repurchased 507,000 shares and is focusing on recurring revenues through its Leasing & Fleet Management segment, signaling confidence in future performance [9]

Key Takeaways Investing in stocks based on valuation metrics is a proven strategy for identifying opportunities with strong upside potential. While the price-to-earnings (P/E) ratio is a popular tool for gauging value, it has its limitations, especially when evaluating companies that are unprofitable or still in their early growth phases. In such cases, the price-to-sales (P/S) ratio becomes particularly valuable. By comparing a company's market capitalization to its revenues, the P/S ratio offers a clearer ...

Group 1 - Greenbrier Companies (GBX) has recently reached a key level of support and has overtaken the 200-day moving average, indicating a long-term bullish trend [1] - GBX shares have increased by 20% over the past four weeks, and the company holds a Zacks Rank 2 (Buy), suggesting potential for continued growth [2] - Positive earnings estimate revisions for GBX further strengthen the bullish outlook, with no estimates decreasing in the past two months and one estimate increasing [3] Group 2 - The 200-day simple moving average is a useful tool for determining long-term market trends and serves as a support or resistance level [2] - The combination of positive earnings estimate revisions and technical indicators positions GBX as a stock to watch for potential gains [3]

Core Insights - Greenbrier Companies (GBX) is experiencing strong operational efficiency and demand, positively impacting its revenue growth [1] - The company has demonstrated robust liquidity, with a current ratio of 1.48, indicating financial flexibility [10] - GBX shares have appreciated significantly, outperforming the industry average [1][3] Financial Performance - The Zacks Consensus Estimate for GBX's earnings per share has been revised upward by 28.2% for the current year and 2.8% for 2026, reflecting broker confidence [2] - GBX's shares have increased by 23% over the past year, while the Zacks Transportation - Equipment and Leasing industry has seen a decline of 9.8% [3] Operational Highlights - In Q3 2025, GBX secured 3,900 new railcar orders valued at $500 million and delivered 5,600 units, showcasing strong market activity [4][8] - The lease fleet utilization rate reached 98%, indicating efficient asset use and robust demand [8] - The backlog stands at 18,900 units, valued at $2.5 billion, providing solid revenue visibility [4][8] Financial Flexibility - GBX renewed and extended $850 million in bank facilities through 2030, enhancing its financial flexibility for long-term growth [9] - The company's strong liquidity position supports its ability to invest in operations and navigate market fluctuations [10] Industry Position - GBX holds a Zacks Rank of 2 (Buy), indicating a favorable outlook within its industry [6] - The industry rank for GBX is 25 out of 246, placing it in the top 10% of Zacks Industries, which is crucial for stock performance [6][7]

Group 1 - Greenbrier Companies (GBX) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2] - The Zacks rating system is beneficial for investors as it focuses on earnings estimate revisions, which are more objective compared to subjective Wall Street analyst ratings [2][5] - The correlation between changes in earnings estimates and stock price movements is strong, largely due to institutional investors using these estimates to determine fair value [3][4] Group 2 - Greenbrier's rising earnings estimates indicate an improvement in its underlying business, which is expected to positively influence its stock price [4][9] - The Zacks Consensus Estimate for Greenbrier is projected at $6.60 per share for the fiscal year ending August 2025, with a notable increase of 11.9% in estimates over the past three months [7] - The Zacks Rank system maintains a balanced distribution of ratings, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, highlighting Greenbrier's strong position in earnings estimate revisions [8][9]

Financial Performance - Revenue for the three months ended May 31, 2025, was $842.7 million, a 2.9% increase from $820.2 million in the same period of 2024[17]. - Net earnings for the three months ended May 31, 2025, were $67.5 million, compared to $40.6 million for the same period in 2024, representing a 66.3% increase[18]. - Basic earnings per common share for the three months ended May 31, 2025, were $1.92, up from $1.09 in the same period of 2024, reflecting a 76.1% increase[17]. - Comprehensive income for the three months ended May 31, 2025, was $78.7 million, compared to $41.5 million for the same period in 2024, representing an increase of 89.5%[18]. - Net earnings for the nine months ended May 31, 2025, were $172.8 million, compared to $107.4 million for the same period in 2024, representing a 60.8% increase[21]. - Earnings from operations for the three months ended May 31, 2025, were $92.6 million, compared to $72.3 million in the same period of 2024, a 28.0% increase[17]. - Earnings from operations for the nine months ended May 31, 2025, were $288.0 million, an increase from $200.7 million in the same period of 2024, representing a growth of approximately 43.5%[73]. - Net earnings attributable to Greenbrier increased by $68.8 million or 69.8% year-over-year, primarily due to higher margins[98]. Assets and Equity - Total assets as of May 31, 2025, were $4,353.2 million, compared to $4,254.5 million as of August 31, 2024, indicating a growth of 2.3%[16]. - Total equity attributable to Greenbrier increased to $1,504.0 million as of May 31, 2025, from $1,376.1 million as of August 31, 2024, marking a 9.3% increase[16]. - The balance of retained earnings as of May 31, 2025, was $1,172.5 million, an increase from $966.9 million as of May 31, 2024[21]. - The company’s total equity attributable to Greenbrier increased to $1,669.8 million as of May 31, 2025, from $1,410.2 million as of May 31, 2024, reflecting a growth of 18.4%[21]. Cash Flow and Capital Expenditures - Cash flows from operating activities provided $167.7 million for the nine months ended May 31, 2025, up from $138.4 million in the prior year[21]. - Capital expenditures for the nine months ended May 31, 2025, were $209.1 million, down from $324.7 million in the same period of 2024, indicating a decrease of 35.6%[21]. - Total cash and cash equivalents and restricted cash at the end of the period was $342.0 million, compared to $291.8 million at the end of May 31, 2024, reflecting an increase of 17.1%[21]. - As of May 31, 2025, cash and cash equivalents were $296.8 million, with available borrowings totaling $472.3 million[180]. Debt and Financing - Senior secured credit facilities totaled $1.3 billion as of May 31, 2025, with $472.3 million available to draw down[40]. - The principal balance of nonrecourse senior term debt was $311.3 million, and asset-backed term notes secured by leased railcars totaled $459.9 million[51]. - The company has $100.0 million authorized for share repurchase, with $78.2 million remaining as of May 31, 2025[213]. - The company was in compliance with all restrictive covenants related to its credit facilities as of May 31, 2025[186]. - The company expects existing funds and cash generated from operations to be sufficient to fund expected debt repayments and working capital needs over the next twelve months[190]. Revenue Segments - Manufacturing revenue for the nine months ended May 31, 2025, was $2,298.9 million, slightly down from $2,325.7 million in the same period of 2024, a decrease of 1.1%[17]. - The Manufacturing segment generated revenue of $2,370.2 million for the nine months ended May 31, 2025, compared to $2,522.6 million in 2024, indicating a decline of about 6.0%[73]. - Leasing & Fleet Management segment revenue increased by $15.8 million or 9.5% to $181.8 million for the nine months ended May 31, 2025, driven by higher rents associated with a larger fleet[150]. - Operating lease rental revenues for the nine months ended May 31, 2025, were $103.1 million, up from $88.5 million in the same period of 2024, marking an increase of approximately 16.0%[74]. Operational Efficiency - Margin percentage improved to 18.7%, a 4.0% increase compared to the same period last year, driven by operating efficiencies in the Manufacturing segment[98]. - The margin percentage for the Manufacturing segment increased by 3.8% to 14.8% for the nine months ended May 31, 2025, compared to 11.0% for the same period in 2024, reflecting improved operational efficiency[145]. - Selling and administrative expenses rose to $192.5 million for the nine months ended May 31, 2025, an increase of 7.4% from $179.2 million in the prior year, mainly due to higher employee-related costs[155]. Shareholder Returns - The company declared cash dividends of $29.7 million for the nine months ended May 31, 2025, compared to $29.1 million in the same period of 2024[21]. - A quarterly dividend of $0.32 per share was declared on June 26, 2025, and the company authorized a share repurchase program of up to $100.0 million[177][178]. Risk Management - The company utilized foreign exchange contracts totaling $141.2 million to hedge against currency risks, with a fair value of $3.2 million recorded as an asset[59]. - Interest rate swap agreements with notional amounts of $694.9 million were in place as of May 31, 2025, with an expected reclassification of approximately $8.6 million to interest expense in the next year[60]. - The company plans to continue utilizing cash flow hedges to manage market risks associated with foreign currency and interest rates[58].

Core Viewpoint - Greenbrier has demonstrated strong cost management, exceeding earnings expectations and raising profitability guidance for the year, resulting in a 20% increase in share price [1][4]. Group 1: Company Performance - Greenbrier reported earnings of $1.86 per share on revenue of $842.7 million, significantly surpassing Wall Street's consensus estimate of $0.98 per share on revenue of $795 million [4]. - Revenue increased by 2.7% year over year, attributed to operational efficiencies and gains from its leasing portfolio [4]. - The company has raised its full-year guidance for gross margin and operating margin, anticipating approximately $10 million in annual savings from optimizing its European network [6]. Group 2: Industry Context - The rail industry is currently facing a challenging operating environment, with volumes declining due to economic uncertainty and tariffs, leading to reduced capital expenditures [3]. - Despite the tough conditions, Greenbrier's performance suggests that investor sentiment may have overreacted prior to the earnings report [7]. - The cyclical nature of the business indicates that significant acceleration in performance may depend on a recovery in demand for rail services [7].

Group 1 - The article highlights NATO's commitment to increase defense spending by member states to 5% of GDP, which could significantly enhance Europe's infrastructure spending by hundreds of billions or even trillions [1]