FreightCar America, Inc. (NASDAQ:RAIL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. FreightCar America, Inc., through its subsidiaries, engages in design, manufacture, and sale of railcars and railcar components for the transportation of bulk commodities and containerized freight products in the United States and Mexico. The US$234m market-cap company posted a loss in its most recent financial year of US$34m and a latest trailing-twelve-month loss of US$131m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which FreightCar America will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for FreightCar America

FreightCar America is bordering on breakeven, according to the 2 American Machinery analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$26m in 2025. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 59% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving FreightCar America's growth isn’t the focus of this broad overview, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. FreightCar America currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of FreightCar America which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at FreightCar America, take a look at FreightCar America's company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is FreightCar America worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether FreightCar America is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on FreightCar America’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.