FSTR kicked off 2026 with a solid start, posting 1Q:26 results above expectations, with sales and profits besting our forecast across both operating segments, and gross margins coming in 280 basis points above our forecast. The Rail, Technologies, and Services (RTS) segment realized sales growth of 38% year over year (all organic), exceeding our projection by 14%, with higher volumes across all three business units. Better-than-expected RTS segment operating income (by $5 million) was the primary driver of the EPS beat. Backlog of $210 million rose 11% sequentially but was down 12% compared to the prior year quarter. However, order intake improved in April, which implied backlog at the end of April 2026 stood roughly at $240 million. The company reaffirmed its 2026 guidance. However, we adjust our estimates based on the quarter's solid results and now model 2026 EPS of $1.79 (was $1.59) and 2027 EPS of $2.17 (was $2.04). FSTR's debt rose by $17 million in 1Q:26 as it tapped its revolver to fund seasonal working capital needs. We continue to assume debt reduction in the back half of 2026 and into 2027. A structurally improved free cash flow profile and capital light business model support our moderate risk rating. FSTR's higher margin product mix appears to be flowing through to the gross margin faster than we had anticipated and, as such, we increase our price target multiple to 18x (from 16x). This, coupled with our raised estimates, takes our price target to $39 (from $33), which is 18x our 2027 EPS estimate of $2.17 (from $2.04).