L.B. Foster (FSTR) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for L.B. Foster (FSTR) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
L.B. Foster Fundamentals
Stock Price Target: $21.35
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for L.B. Foster in comparison to the Machinery industry and the S&P 500.
L.B. Foster is a Small Cap company with a Market Cap of $139M.
How are investors using L.B. Foster earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for L.B. Foster is 14.75%, in comparison to 3.44% for the S&P 500 and 1.41% for the 10-year treasury bond. The median earnings yield for the Machinery industry is 6.13%.
What does L.B. Foster Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
L.B. Foster is currently trading at a P/E of 23.53. The P/E for the Machinery industry is 21.89 and the P/E for the S&P 500 is 29.68.
What is the current Price-to-Sales Ratio (P/S) for L.B. Foster?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
L.B. Foster is currently trading at a P/S of 0.28. The P/S for the Machinery industry is 2.68 and the P/S for the S&P 500 is 3.22.
How does L.B. Foster Price-to-BookRatio (P/B) compare to the Machinery industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
L.B. Foster P/B ratio is 0.79. The P/B for the Machinery industry is 4.55 and the P/B for the S&P 500 is 4.86.
How attractive is L.B. Foster Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
L.B. Foster ROIC is currently 2.67% in comparison to 12.44% for the Machinery industry and 8.60% for the S&P 500.
How has FSTR stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, L.B. Foster has traded between the range of $12.87 and $19.47.
The current Analyst Price Target for L.B. Foster is $21.35.
What is L.B. Foster YTD Performance in comparison to its industry and the total market?
The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year.
The YTD performance for L.B. Foster is -14.95%. The Machinery industry has a YTD performance of 12.42% in comparison to the YTD S&P 500 performance of 21.62%.
Recent Financial Results
- Net sales for the 2021 third quarter of $130.1M, an $11.7M increase, or 9.9%, over the third quarter of 2020
- Gross profit for the 2021 third quarter of $22.3M, a $0.2M improvement, or 1.0%, from the prior year quarter.
- 2021 third quarter gross profit margin of 17.1% versus 18.6% in last year’s comparable quarter
- Adjusted EBITDA from continuing operations for 2021 third quarter of $4.4M, a $3.0M decrease versus the prior year comparable quarter
- Net operating cash flow used in the third quarter of $13.7M, a $21.7M decrease compared to the prior year quarter
Stock Price Target: $21.35
L.B. Foster Company provides products and services for the rail industry and solutions to support critical infrastructure projects worldwide. The company operates in two segments, Rail Technologies and Services; and Infrastructure Solutions.
The company markets its products directly, as well as through a network of agents. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania. The current CEO is John Kasel.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.