WAB US S&P 500Russell 1000 Earnings call · transcribed from the recording
Wabtec (WAB) · Q3 2026 results and valuation
Share price: $304.18 · 2026-11-11
Wabtec provides locomotives, rail and transit equipment, and digital solutions for the freight rail, passenger transit, mining, marine, and industrial markets. The company supplies components, parts, and services to rail operators, transit agencies, and equipment manufacturers globally. Source: 10-K annual report (2026-02-13)
Results Q3 2026 vs Q2 2026 · previous quarter · published 21 Oct 2026 and 22 Jul 2026
Net income up 3.3% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
+3.3%
Net income vs Q2 2026
Outlook given
Net income 409.0M vs 396.0M
Revenue −1.9%
Why Against the same quarter last year (+31.9%), net income rose predominantly due to higher sales and a 1.5 percentage point improvement in gross margin, alongside a 0.4 percentage point reduction in operating expenses as a percent of revenue.
2 · How management spoke
Upbeat
More upbeat than 87% of company calls
Answers to analysts: very upbeat, in line with the script.
Last call it was different: the answers were less upbeat than the script.
3 · What stood out
Wabtec raised its full-year adjusted EPS guidance due to third quarter results and ongoing underlying momentum.
Valuation
Is Wabtec undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 10.1% growth a year (3-year revenue growth), the model's fair value is $176.07 a share — the stock trades 73% above it. Today's price assumes 16.6% growth a year.
Current price
$304.18
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+16.6% for 10 yrs
Fair value / share
$176.07
Buy below
$132.05
Price vs fair value
Overvalued 73%
Price vs buy-below price
Overvalued 130%
Read between the lines
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Figure
Sales rose 8% to $3.1 billion in Q3 2026 compared to Q2 2026.
Source quote
“Sales were $3.1 billion, which was up 8%.”
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Figure
Digital intelligence sales increased by 24.2% from last year, highlighting a primary revenue driver for the quarter.
Source quote
“Digital intelligence sales were up 24.2% from last year.”
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Key theme
The third quarter grew by 1.9 percentage points, exceeding internal expectations while fulfilling the company's long-term forecast for growth.
Source quote
“The third quarter was up 1.9 percentage points, and that was higher than our expectations, but we were expecting growth in the third quarter, which we've talked about throughout the year.”
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Guidance
WAB raised its full-year adjusted EPS guidance due to third quarter results and ongoing underlying momentum.
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Guidance
The company expects the fourth quarter to have a fair amount higher in margin expansion than the third quarter.
3 more
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Guidance
Management noted that a broader fleet renewal program in North America represents a tailwind for the business that was not accounted for in the current guidance.
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Key theme
Revenue growth came in less than expected for the third quarter due to timing issues, with the growth expected to move to the fourth quarter.
Source quote
“So as we look at our own expectations for the third quarter we came in less than revenue growth came in less than expected but it is simply timing and nothing more and that's just moved to the fourth quarter.”
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Key theme
The core driver exceeded expectations and grew the most on a year-over-year basis.
Source quote
“That was the biggest driver on a year-over-year basis, and it was the biggest driver over our expectation.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“These results reflect the strength across the portfolio, discipline and execution by our teams and the continued success of the strategic actions we have taken to enhance our growth profile,...”
“Taken together, these wins highlight the value of our technology, the strength of our customer relationships and our ability to help customers improve reliability, durability, efficiency, and safety.”
“We continue to invest in engineering resources and current business opportunities, but more importantly, we are investing in our future as a leading industrial technology company focused on improving our...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.12B | 3.18B | −1.9% | 2.89B | +8.1% |
| Gross profit | 1.16B | 1.16B | +0.3% | 1.00B | +16.2% |
| Operating income | 625.0M | 600.0M | +4.2% | 491.0M | +27.3% |
| Net income | 409.0M | 396.0M | +3.3% | 310.0M | +31.9% |
| EPS | 2.42 | 2.33 | +3.9% | 1.81 | +33.7% |
| P/E today 35.2 | 35.7 | 36.3 | −0.6 | 29.1 | +6.6 |
Topics
Most discussed now
- The better-than-expected margin performance included favorable product mix, strong operational execution, including productivity benefits…
- The other third of it is on delivering innovative products that Wabtec can get the value...
- Today's slide presentation, along with Wabtec's earnings release and financial disclosures, were posted to its website earlier today and…
- While timing of certain locomotive deliveries shifted out of the third quarter and into the fourth quarter, these shifts do...
Faded since Q2 2026
- Fading This improvement was achieved despite tariff-related headwinds, unfavorable mix, and...
- Fading As Wabtec discussed in its last call, it expected the quarter's revenue growth to be similar to Q1's results.
- Fading The increase was predominantly driven by higher sales, improved gross margin, and lapping prior year's transaction costs resulting from…
- Fading Certainly, the team has been absorbing a significant downstroke with regards to rail car business, which is about 60% of...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Material agreement; New financial obligation · SEC 8-K
- Other events · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
Wabtec reported third-quarter 2026 sales of $3.12 billion, up 8.1% year-over-year, with GAAP diluted earnings per share of $2.42, up 33.7% compared to the previous year.
- New financial obligation · SEC 8-K
Westinghouse Air Brake Technologies Corporation established a commercial paper program on October 1, 2026, allowing for the issuance of short-term notes up to an aggregate amount of $2,000,000,000.
- Results of operations; Regulation FD disclosure · SEC 8-K
Westinghouse Air Brake Technologies Corporation issued a press release on July 22, 2026, reporting second quarter results and providing earnings guidance for fiscal year 2026.
- Shareholder vote results · SEC 8-K · routine
- Results of operations; Regulation FD disclosure · SEC 8-K
Westinghouse Air Brake Technologies Corporation issued a press release and investor presentation on April 22, 2026, reporting first quarter results and providing earnings guidance for fiscal year 2026.
- Regulation FD disclosure · SEC 8-K
Westinghouse Air Brake Technologies Corporation posted an investor presentation on March 3, 2026, containing forward-looking statements and non-GAAP financial measures.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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fourth quarter
future outlook based on sustained revenue and earnings momentum
Source quote
“These results demonstrate sustained revenue and earnings momentum and provide enhanced feasibility for the fourth quarter and into the future.”
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back half of the year
expectations for continued demand
Source quote
“As discussed in our last earnings call, we raised our full-year revenue guidance, $110 million at the midpoint, reflecting the incremental flow business activity we experienced during the second quarter and our expectations for continued demand in the back half of the year.”
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fourth quarter
timing of certain locomotive deliveries
Source quote
“While timing of certain locomotive deliveries shifted out of the third quarter and into the fourth quarter, these shifts do not change our view of the strong underlying demand environment or our full-year revenue guidance.”
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fourth quarter
units shifting to the fourth quarter
Source quote
“During the quarter, revenue benefited from increased mining sales, which were largely offset by lower locomotive deliveries, partly driven by units shifting to the fourth quarter.”
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fourth quarter
outlook for the fourth quarter
Source quote
“As we look at the fourth quarter, in light of our third quarter results and our ongoing underlying momentum, we are raising our full-year adjusted EPS guidance.”