Norfolk Southern Corporation
Norfolk Southern Corporation Fundamental Analysis
Norfolk Southern Corporation (NSC) shows moderate financial fundamentals with a PE ratio of 24.78, profit margin of 23.59%, and ROE of 19.16%. The company generates $12.2B in annual revenue with weak year-over-year growth of -0.27%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 62.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze NSC's fundamental strength across five key dimensions:
Efficiency Score
WeakNSC struggles to generate sufficient returns from assets.
Valuation Score
ExcellentNSC trades at attractive valuation levels.
Growth Score
ModerateNSC shows steady but slowing expansion.
Financial Health Score
WeakNSC carries high financial risk with limited liquidity.
Profitability Score
ExcellentNSC achieves industry-leading margins.
Key Financial Metrics
Is NSC Expensive or Cheap?
P/E Ratio
NSC trades at 24.78 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NSC's PEG of -8.79 indicates potential undervaluation.
Price to Book
The market values Norfolk Southern Corporation at 4.58 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.50 times EBITDA. This is generally considered low.
How Well Does NSC Make Money?
Net Profit Margin
For every $100 in sales, Norfolk Southern Corporation keeps $23.59 as profit after all expenses.
Operating Margin
Core operations generate 32.91 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.16 in profit for every $100 of shareholder equity.
ROA
Norfolk Southern Corporation generates $6.35 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Norfolk Southern Corporation generates strong operating cash flow of $4.36B, reflecting robust business health.
Free Cash Flow
Norfolk Southern Corporation generates strong free cash flow of $4.36B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $19.40 in free cash annually.
FCF Yield
NSC converts 6.14% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.78
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-8.79
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.84
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.10
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.85
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How NSC Stacks Against Its Sector Peers
| Metric | NSC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.78 | 26.76 | Neutral |
| ROE | 19.16% | 1300.00% | Weak |
| Net Margin | 23.59% | -29570.00% (disorted) | Strong |
| Debt/Equity | 1.10 | 0.79 | Weak (High Leverage) |
| Current Ratio | 0.85 | 10.68 | Weak Liquidity |
| ROA | 6.35% | -1545134.00% (disorted) | Weak |
NSC outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Norfolk Southern Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
24.98%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
12.17%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
21.24%
Industry Style: Cyclical, Value, Infrastructure
High Growth