5 Best Railroad Stocks to Buy According to Analysts

3. L.B. Foster Company (NASDAQ:FSTR)

Stock Upside: 15.13%

Number of Hedge Fund Holders: 6

L.B. Foster Company (NASDAQ:FSTR) is one of the best railroad stocks to buy according to analysts. On March 3, L.B. Foster Company (NASDAQ:FSTR) announced its fourth‑quarter and full‑year 2025 results in which it reported its highest fourth‑quarter net sales since 2018.

Quarterly net sales were $160.4 million, a 25.1% increase year over year and beating analyst expectations by about 1%. This beat, said management, was driven by stronger sales in the Rail and Infrastructure segments, up 23.7% and 27.3%, respectively.

GAAP earnings per share came in at $0.22, which undershot Wall Street expectations by about 66%. This was mainly due to a higher effective tax rate, the absence of a prior‑year tax valuation‑allowance benefit, and UK pretax losses that were not tax‑effective, noted management.

For the full year 2025, net sales rose 1.7% to $540.0 million, adjusted EBITDA increased 16.4% to $39.1 million, and net income fell to $7.55 million from $42.95 million in FY2024. Management explained that decline was largely because a one‑off tax valuation‑allowance release in the prior year did not recur.

In light of the performance, management gave 2026 guidance of roughly 3.7% sales growth and adjusted EBITDA expansion of 10%-11%. It also anticipates free cash flow to touch $20 million, capital expenditures to rise to about 2.7% of sales, and leverage to stay within a disciplined 1.0x-1.5x range.

L.B. Foster Company (NASDAQ:FSTR) is a US manufacturing and distribution company serving the rail and infrastructure sectors. It provides rail products such as trackwork, rail joints, friction management systems, and rail technologies, along with services for construction and energy markets.