Stadler Rail’s CHF 33.3 billion backlog, alternative-drive leadership and recovering margins offer long-term upside, but investors must watch working-capital conversion and delivery execution.
Overview
Stadler Rail AG designs and manufactures passenger and freight rolling stock, and also supplies fleet maintenance, components and digital signalling. Rolling Stock contributes 80%–83% of revenue, with Service & Components at 14%–16% and Signalling at 3%–4%. Modular FLIRT and KISS trains, alternative-drive expertise and long-lived customer relationships support its competitive position; its CHF 33.3 billion backlog provides more than six years of sales visibility. H1 2026 revenue grew 40% year over year to CHF 1.965 billion, EBIT rose to CHF 79.5 million and margin expanded to 4.0%, although net income was nearly flat at CHF 31.2 million and cash conversion remains the central concern. FY 2025 free cash flow was -CHF 588 million, driving net cash of CHF 368 million into net debt of CHF 275 million. At CHF 29.58, the stock trades at 28.2x trailing earnings and 0.65x sales; consensus target is CHF 30.86. **Backlog conversion and working-capital normalization are the key near-term tests.** Management targets FY 2026 revenue above CHF 5.0 billion and EBIT margin above 5.0%; catalysts include delivery-related cash release, a richer service and signalling mix, and the January 2027 CEO transition.