- If you are wondering whether Greenbrier Companies at around US$49.62 is offering good value today, it helps to separate story from price and look at what the numbers are actually saying.
- The stock has seen mixed recent returns, with a 1.4% decline over the past week and a 4.9% decline over the past month, while still sitting on gains of 4.9% year to date and 19.0% over the last year, and 102.1% over three years and 18.7% over five years.
- Recent attention on Greenbrier Companies has focused on its share price performance and how it compares with broader machinery peers and the wider market. That context has prompted investors to revisit what is already priced in and whether the current level still lines up with the fundamentals.
- On Simply Wall St’s valuation checks, Greenbrier Companies scores 3 out of 6 on perceived undervaluation, as shown in its valuation score. The rest of this article will walk through different valuation approaches before finishing with a framework that can help you interpret these signals more clearly.
Find out why Greenbrier Companies's 19.0% return over the last year is lagging behind its peers.
Approach 1: Greenbrier Companies Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and discounting them back to today using a required rate of return.
For Greenbrier Companies, the model used is a 2 Stage Free Cash Flow to Equity approach. The last twelve months free cash flow is about $198.3 million. Looking ahead, analysts and extrapolations used by Simply Wall St feed in annual free cash flow estimates such as $106 million in 2027 and further projections out to 2035, all in $ and mostly within the tens of millions range.
When all those projected cash flows are discounted back, the estimated intrinsic value from this DCF comes out at about $19.16 per share. Compared with the current share price of around $49.62, the model implies the stock is roughly 159.0% above this DCF estimate, which points to Greenbrier trading well above this particular cash flow based valuation.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Greenbrier Companies may be overvalued by 159.0%. Discover 54 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Greenbrier Companies Price vs Earnings
For a profitable company like Greenbrier Companies, the P/E ratio is a straightforward way to connect what you pay per share with the earnings that each share represents. It helps you see how many dollars of price investors are currently paying for one dollar of earnings.
What counts as a “normal” P/E depends a lot on growth expectations and risk. Higher expected growth or lower perceived risk can justify a higher multiple, while slower expected growth or higher risk tends to line up with a lower P/E.
Greenbrier Companies currently trades on a P/E of about 10.35x. That sits well below the Machinery industry average of around 28.07x and also below a broader peer group average of about 42.98x. Simply Wall St’s Fair Ratio for Greenbrier Companies is 12.06x. This is a proprietary estimate of what the P/E might be given factors such as earnings growth, profit margins, industry, market cap and risk profile.
The Fair Ratio can be more useful than a simple peer or industry comparison because it adjusts for those company specific characteristics instead of assuming one size fits all. Against that 12.06x Fair Ratio, the current 10.35x P/E points to Greenbrier Companies trading below this preferred earnings based estimate.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Greenbrier Companies Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives on Simply Wall St let you attach a clear story about Greenbrier Companies to the numbers by linking your view on its revenue, earnings, margins and discount rate to a financial forecast, a Fair Value and then a simple comparison with the current share price, all inside an easy tool on the Community page that updates automatically when new news or earnings arrive. This is why one investor might align with a more optimistic Fair Value of US$60.00 while another leans toward US$40.00, even though both are looking at the same company and using the same core data.
For Greenbrier Companies, however, we will make it really easy for you with previews of two leading Greenbrier Companies Narratives:
🐂 Greenbrier Companies Bull Case
Fair Value: US$60.00
Gap to Fair Value: about 17.4% below this narrative's Fair Value at the recent US$49.62 share price
Revenue Trend Assumption: about 10.6% annual decline
- Backlog of 16,300 railcars worth about US$2.2b, high leasing utilization near 98% and double digit renewal uplifts are treated as key supports for multi year revenue and earnings.
- Efficiency measures across North America, Europe and Mexico, plus active used equipment trading and more than US$895 million of liquidity, are used to support targeted operating margin of 9% to 9.5% and return on invested capital of 10% to 14%.
- The bullish cohort anchors on a Fair Value of US$60.00 that assumes revenue around US$3.1b and earnings of US$107.2 million by 2029, with the share trading on a P/E of 22.8x using an 11.5% discount rate.
🐻 Greenbrier Companies Bear Case
Fair Value: US$44.67
Gap to Fair Value: about 11.1% above this narrative's Fair Value at the recent US$49.62 share price
Revenue Trend Assumption: about 93% annual decline
- Efficiency improvements, cost reductions and capacity rationalization, particularly in Europe, are expected to support higher margins even while the railcar market is described as challenging.
- A US$2.6b global railcar backlog and growth in recurring leasing revenue are used to frame a case for steady production and cash flow alongside risks from trade policy, tariffs and slower orders.
- The consensus style view centers on a Fair Value of about US$44.67, with revenue assumptions around US$2.8b and earnings of US$95.4 million by 2029, using a 19.1x P/E and an 11.2% discount rate.
If you want to see all the numbers and reasoning that sit behind these stories, set up on Simply Wall St and compare them with your own expectations. Start with the full bull and bear Narratives for Greenbrier Companies, then sense check which assumptions actually line up with how you see the business playing out.
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Greenbrier Companies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
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.
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