Since October 2021, the S&P 500 has delivered a total return of 76.4%. But one standout stock has nearly doubled the market - over the past five years, L.B. Foster has surged 138% to $37.33 per share. Its momentum hasn’t stopped as it’s also gained 23.9% in the last six months thanks to its solid quarterly results, beating the S&P by 8%.
Is there a buying opportunity in L.B. Foster, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is L.B. Foster Not Exciting?
We’re glad investors have benefited from the price increase, but we’re sitting this one out for now. Here are three reasons why FSTR doesn’t excite us, plus one stock we’d rather own.
1. Backlog Is Unchanged, Sales Pipeline Stalls
In addition to reported revenue, backlog is a useful data point for analyzing General Industrial Machinery companies. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into L.B. Foster’s future revenue streams.
Over the last two years, L.B. Foster failed to grow its backlog, which came in at $246.1 million in the latest quarter. This performance was underwhelming and shows the company faced challenges in winning new orders. It also suggests there may be increasing competition or market saturation. 
2. EPS Barely Growing
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
L.B. Foster’s weak 1.2% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.
3. Previous Growth Initiatives Haven’t Impressed
Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).
L.B. Foster historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 3.9%, lower than the typical cost of capital (how much it costs to raise money) for industrials companies.
Final Judgment
L.B. Foster isn’t a terrible business, but it doesn’t pass our bar. With its shares beating the market recently, the stock trades at 20.1× forward P/E (or $37.33 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We’re fairly confident there are better investments elsewhere. We’d suggest looking at one of our all-time favorite software stocks.
Stocks We Would Buy Instead of L.B. Foster
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Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
