Does Greenbrier’s Share Price Slump Signal a Long Term Opportunity in 2025?

• Wondering if Greenbrier Companies is quietly setting up a value opportunity, or if the stock's slump is telling you to stay away? This breakdown will help you make sense of the numbers without the hype.
• The share price has bounced 3.9% over the last week and 8.5% over the last month, but it is still down 24.4% year to date and 29.7% over the past year, even after gaining 42.2% over 3 years and 51.8% over 5 years.
• Investors have been reacting to a mix of macro rail freight and industrial sentiment shifts, along with ongoing discussions around North American railcar demand and replacement cycles. Together, these themes are reshaping how the market prices cyclical names like Greenbrier and how much risk investors are willing to take on in capital goods stocks.
• Right now, Greenbrier scores a 4/6 valuation check score, suggesting it looks undervalued on several fronts. We will unpack what that means using a few different valuation lenses, before finishing with a more holistic way to think about what the stock is really worth.

Find out why Greenbrier Companies's -29.7% return over the last year is lagging behind its peers.

Approach 1: Greenbrier Companies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth today by projecting the cash it could generate in the future and then discounting those cash flows back to the present.

For Greenbrier Companies, the latest twelve month Free Cash Flow is roughly -$48.6 million, reflecting recent investment and cyclicality in the railcar business. Looking ahead, analysts and extrapolated estimates point to a sharp recovery, with Free Cash Flow projected to reach about $445.7 million in 2035. These rising cash flows are based on a 2 Stage Free Cash Flow to Equity model that uses analyst forecasts for the early years and then tapers growth to more sustainable levels over the long term.

When all those future cash flows are discounted back, the model suggests an intrinsic value of about $98.32 per share. Compared with the current market price, this implies Greenbrier is trading at roughly a 53.0% discount, indicating the shares look materially undervalued on a cash flow basis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Greenbrier Companies is undervalued by 53.0%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Greenbrier Companies.

Approach 2: Greenbrier Companies Price vs Earnings

For a profitable business like Greenbrier, the Price to Earnings, or PE, ratio is a useful way to gauge how much investors are paying for each dollar of current earnings. In general, companies with stronger and more reliable earnings growth, and lower perceived risk, tend to justify higher PE ratios, while cyclical or riskier businesses usually trade on lower multiples to reflect the bumpier ride.

Greenbrier currently trades at about 7.1x earnings, which is far below both the broader machinery industry average of roughly 25.5x and the peer group average of around 37.1x. That gap suggests the market is heavily discounting the stock relative to other capital goods names. However, simple comparisons like these can be misleading, because they do not fully capture Greenbrier’s specific mix of growth prospects, profitability, balance sheet strength, and cyclicality.

To address this, Simply Wall St uses a proprietary Fair Ratio, which estimates what PE multiple a stock should trade on given factors such as its earnings growth outlook, risk profile, profit margins, industry context, and market capitalization. Because this Fair Ratio is tailored to the company rather than a blanket sector average, it offers a more precise gauge of value. On this basis, Greenbrier’s current 7.1x PE sits meaningfully below its Fair Ratio, indicating that the shares appear undervalued when viewed through an earnings multiple approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Greenbrier Companies Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework that lets you attach a clear story and set of assumptions about future revenue, earnings, and margins to a company, and then translate that story into a concrete forecast and fair value. A Narrative on Simply Wall St links three things together: your view of the business, a financial model based on that view, and a Fair Value you can compare to the current share price to decide whether Greenbrier belongs on your buy, hold, or sell list. Narratives live inside the Community section of the platform, where millions of investors share accessible, easy to follow scenarios that are automatically refreshed when new information, such as earnings results or major news, changes the outlook. For example, one Greenbrier Narrative might assume shrinking margins and apply a higher discount rate to arrive at a fair value below today’s price, while another might lean on the $2.6 billion backlog and resilient leasing income to justify a fair value well above the market, showing how different perspectives turn into different decisions.

Do you think there's more to the story for Greenbrier Companies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com