Rail equipment company Westinghouse Air Brake Technologies (NYSE: WAB) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 14.8% year on year to $2.97 billion. The company’s full-year revenue guidance of $12.34 billion at the midpoint came in 2.9% above analysts’ estimates. Its non-GAAP profit of $2.10 per share was 0.9% above analysts’ consensus estimates.

Is now the time to buy Wabtec? Find out by accessing our full research report, it’s free.

“The Wabtec team delivered a strong fourth quarter and full year results, reflecting the strength of our business and our ability to execute in dynamic markets,” said Rafael Santana, Wabtec’s President and CEO.

Company Overview

Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE: WAB) provides equipment, systems, and related software for the railway industry.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Wabtec’s 8.1% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Wabtec’s annualized revenue growth of 7.4% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. We also note many other Heavy Transportation Equipment businesses have faced declining sales because of cyclical headwinds. While Wabtec grew slower than we’d like, it did do better than its peers.

Wabtec also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Wabtec’s organic revenue averaged 6.5% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Wabtec reported year-on-year revenue growth of 14.8%, and its $2.97 billion of revenue exceeded Wall Street’s estimates by 3.5%.

Looking ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, similar to its two-year rate. This projection is above average for the sector and suggests its newer products and services will help support its recent top-line performance.

The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Wabtec has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 13.8%.

Analyzing the trend in its profitability, Wabtec’s operating margin rose by 4.9 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q4, Wabtec generated an operating margin profit margin of 12%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Wabtec’s EPS grew at an astounding 18.9% compounded annual growth rate over the last five years, higher than its 8.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of Wabtec’s earnings can give us a better understanding of its performance. As we mentioned earlier, Wabtec’s operating margin was flat this quarter but expanded by 4.9 percentage points over the last five years. On top of that, its share count shrank by 9.9%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Wabtec, its two-year annual EPS growth of 23% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, Wabtec reported adjusted EPS of $2.10, up from $1.68 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Wabtec’s full-year EPS of $8.97 to grow 14.1%.

Key Takeaways from Wabtec’s Q4 Results

We were impressed by how significantly Wabtec blew past analysts’ organic revenue expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. This also led to an EPS beat in the quarter. Zooming out, we think this was a solid print. The stock remained flat at $245.94 immediately after reporting.

Big picture, is Wabtec a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).