Why Is Wabtec (WAB) Down 5.3% Since Last Earnings Report?

It has been about a month since the last earnings report for Westinghouse Air Brake Technologies (WAB). Shares have lost about 5.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Wabtec due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Wabtec before we dive into how investors and analysts have reacted as of late.

Wabtec Q4 Earnings Beat Estimates

Wabtec reported encouraging fourth-quarter 2025 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year.

Quarterly earnings per share of $2.10 beat the Zacks Consensus Estimate of $2.07 and improved 25% year over year due to higher sales and operating margin expansion. Revenues of $2.97 billion outpaced the Zacks Consensus Estimate of $2.86 billion. The top line grew 14.8% year over year due to higher sales in the Freight segment, which included acquisitions (Inspection Technologies & Frauscher Sensor Technology). Robust sales in the Transit segment also aided the top line.

WAB’s Segmental Highlights

Freight segment’s net sales of $2.1 billion grew 18.3% year over year. The upside was aided by growth in Equipment sales (up 33% driven by higher locomotive deliveries), Digital sales (up 74.4% owing to the acquisitions of Inspection Technologies & Frauscher Sensor Technology) and Components sales. Freight segment’s adjusted operating margin grew to 22.1% from 19.7% in the year-ago quarter.

In the Transit segment, net sales grew 6.7% year over year to $842 million due to strong aftermarket and original equipment sales. The segmental adjusted operating margin contracted 2.4 points to 14%. The metric was hurt by manufacturing inefficiencies and higher operating expenses as a percentage of revenues.

Other Q4 Details of WAB

Total operating expenses in the reported quarter increased by $147 million from a year ago to $610 million. Operating ratio (operating expenses as a percentage of net sales) deteriorated to 20.6% from 17.9% a year ago. A lower value of the metric is desirable.

Wabtec exited the fourth quarter with cash, cash equivalents and restricted cash of $789 million compared with $710 million at 2024-end. Long-term debt was $4.3 billion compared with $3.5 billion at the prior year-end.

During the reported quarter, WAB repurchased shares worth $75 million. Its board increased the existing share repurchase authorization to $1.2 billion.

WAB’s Impressive 2026 Guidance

Wabtec expects sales in the range of $12.19-$12.49 billion. The company anticipates adjusted earnings per share to be in the $10.05-$10.45 range. The guidance includes the impact from the recent acquisition of Dellner Couplers, which closed on Feb. 10, 2026. The tax rate is expected to be roughly 24.5%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Wabtec has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Wabtec has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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