Buy, Sell, or Hold CSX Stock At $30?
CSX stock (NASDAQ: CSX) has faced recent pressure, primarily due to declining revenues from its coal freight business. This downturn is evident in the lower trading levels of both coal carloads and average revenue per carload in recent quarters. Consequently, at its current price of around $30, CSX stock appears to be a risky investment, especially considering its moderate operating and financial performance alongside a slightly elevated valuation.
Our assessment, which leads to this conclusion, involves a comparison of CSX’s current valuation with its operating performance over the past several years, as well as its present and historical financial standing. Our analysis across key metrics such as Growth, Profitability, Financial Stability, and Downturn Resilience indicates a moderate operating performance and financial condition for the company, as detailed below.
How Does CSX’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, CSX stock looks slightly expensive compared to the broader market.
• CSX has a price-to-sales (P/S) ratio of 4.2 vs. a figure of 3.2 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 11.4 compared to 24.3 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 11.7 vs. the benchmark’s 24.3
How Have CSX’s Revenues Grown Over Recent Years?
CSX’s Revenues have declined marginally over recent years.
• CSX has seen its top line grow at an average rate of 5.5% over the last 3 years (vs. increase of 6.3% for S&P 500)
• Its revenues have declined 0.8% from $15 Bil to $15 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
• Also, its quarterly revenues decreased 3.8% to $3.5 Bil in the most recent quarter from $3.7 Bil a year ago (vs. 5.0% improvement for S&P 500)
How Profitable Is CSX?
CSX’s profit margins are much higher than most companies in the Trefis coverage universe.
• CSX’s Operating Income over the last four quarters was $5.4 Bil, which represents a high Operating Margin of 37.1% (vs. 13.0% for S&P 500)
• CSX’s Operating Cash Flow (OCF) over this period was $5.2 Bil, pointing to a high OCF-to-Sales Ratio of 36.1% (vs. 15.7% for S&P 500)
Does CSX Look Financially Stable?
CSX’s balance sheet looks weak.
• CSX’s Debt figure was $19 Bil at the end of the most recent quarter, while its market capitalization is $57 Bil (as of 3/24/2025). This implies a moderate Debt-to-Equity Ratio of 30.9% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.0 Bil of the $43 Bil in Total Assets for CSX. This yields a poor Cash-to-Assets Ratio of 2.4% (vs. 14.8% for S&P 500)
How Resilient Is CSX Stock During A Downturn?
CSX stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on CSX stock? Our dashboard How Low Can CSX Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.
Inflation Shock (2022)
• CSX stock fell 29.9% from a high of $37.80 on 30 March 2022 to $26.51 on 11 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 22 February 2024
• Since then, the stock has increased to a high of $38.38 on 4 March 2024 and currently trades at around $30
COVID-19 Pandemic (2020)
• CSX stock fell 40.8% from a high of $26.82 on 20 February 2020 to $15.89 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 14 October 2020
Global Financial Crisis (2008)
• CSX stock fell 69.7% from a high of $7.67 on 1 June 2008 to $2.32 on 9 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 13 January 2011
Putting All The Pieces Together: What It Means For CSX Stock
In summary, CSX’s performance across the parameters detailed above are as follows:
• Growth: Neutral
• Profitability: Very Strong
• Financial Stability: Weak
• Downturn Resilience: Weak
• Overall: Neutral
Therefore, considering its moderate performance, high valuation, and the associated risks, we believe investors should approach CSX with caution and our analysis suggests it is a tricky stock to buy.
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