Talgo SA
🇪🇸 TLGO.MC · Madrid · ES0105065009
Industrials
EUR 2.79 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
N/A
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
TTM period through: 2025-12-31
Why N/A?
EPS (TTM) = -0.81 (negative or zero)
Cannot calculate P/E with negative earnings.
Forward P/E (estimated): 8.3
Based on analyst estimates
Reference: Provider P/E (Forward): 8.3
ROE
-49.3%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
9.8x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Talgo SA is a Spanish rolling stock manufacturer currently facing severe operational headwinds and massive contractual penalty provisions. While the recent collapse in earnings is heavily tied to temporary legal and delay penalties, the deeply negative free cash flow, surging debt, and structural long-term earnings decline make it a poor fit for conservative income strategies. Not recommended for new positions given the severe execution risks and lack of dividend sustainability.
Sector Context
Talgo SA designs, manufactures, and maintains intercity and high-speed passenger trains. Unlike essential infrastructure operators with monopolistic characteristics and recurring cash flows, rolling stock manufacturers face intense global competition, highly cyclical project-based revenues, and severe execution risks.
Temporary Opportunity Identified
Massive one-time contractual penalty provisions (€116 million) from Renfe for train delivery delays, compounded by project scope reductions and restructuring costs.
📊 Strategy Analysis
- • The forward P/E of 8.29 suggests potential undervaluation if the company can successfully normalize its manufacturing operations.
- • The recent €116 million penalty provision, while severe, represents a specific contractual dispute rather than a total loss of market demand for high-speed trains.
⚠ What to Watch
- • Deeply negative Free Cash Flow (-€94.5 million) and negative EBITDA margins (-2.65%) completely eliminate any realistic dividend sustainability.
- • Severe execution risks are demonstrated by 5 recent quarters of net losses and a 19.4% annualized decline in EPS over the past 7 years.
- • Leverage has increased substantially, with Debt/Equity rising to 2.73x from historical levels of 1.1x to fund ongoing operational shortfalls.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.