How Does This Railroad Earn Revenue?
CSX Corp is a U.S. freight railroad that moves goods across its rail network. The business earns revenue by providing rail transportation services to shippers, moving freight in railcars and intermodal containers. Its operations depend on running a dense network efficiently, keeping trains and crews productive while maintaining track and equipment. With a USD 80.3 billion market cap, it’s a large, scaled transportation operator.
Are Margins and Cash Flow Still Strong?
FundamentalsFor 2025, reported in USD, CSX generated revenue of about USD 14.1 billion and EBIT of roughly USD 4.5 billion. The cost structure stayed margin-rich on a trailing basis, with a 70.78% gross margin, a 32.08% operating margin, and a 20.50% net profit margin over the last twelve months. Revenue declined 3.1% versus the prior year.
Cash conversion was supported by about USD 1.7 billion of depreciation and amortization, while capital spending was around USD 231 million, resulting in a cash-flow proxy of roughly USD 5.1 billion. On the balance sheet, cash of USD 670 million sat close to total debt of USD 708 million, keeping leverage contained in absolute terms.
Is the Market Paying Too Much Now?
DCF / MultiplesAt USD 43.18 per share, the stock trades above the fair-value range implied by the DCF, even under a stronger outcome. The market’s pricing also sits alongside a 27.70 P/E (TTM) and 15.61 EV/EBITDA (TTM), which are consistent with paying up for durable profitability.
Cash Flow Supports a Tight Balance Sheet
TakeawayOperations are still throwing off meaningful cash relative to spending. The balance sheet looks tight, with cash nearly matching debt. The price, however, assumes the current profit profile holds up well. The case works if margins stay firm and cash remains dependable. It breaks down if revenue softness persists and margins compress.