America’s Trains

Early Stage

The only supplier for an essential U.S. travel market - upscale train vacations

Analytics

Raised to Date: Raised: $0

Aggregate Commitments $

Platform

Wefunder

Start Date

05/03/2021

Close Date

08/31/2021

Min. Goal

$50,000

Max. Goal

$250,000

Min. Investment

$100

Security Type

Equity - Common

Funding Type

RegCF

Series

Seed

Pre-Money Valuation

$1,104,978

Rolling Commitments $

Status
Not Funded
Reporting Date

09/05/2021

Days Remaining
Not Funded
% of Min. Goal

0%

% of Max. Goal

0%

Likelihood of Max
Not Funded
Avg. Daily Raise

$0

Momentum
Not Funded
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Location

Huntsville, Texas

Industry

Transportation, Automotive, Aviation, & Aerospace

Tech Sector

Non-Tech

Distribution Model

B2C

Margin

Medium

Capital Intensity

High

Business Type

Life Style

America’s Trains, with a pre-money valuation of $1.1 million, is raising crowdfunding on Wefunder. The company makes the finest rail cars and engines pulled by Amtrak trains, regional railroads, and exclusive Amtrak engines. It offers Journeys by Rail to fill the void in the luxury rail industry in the US. Barry Jones founded America’s Trains in 2013. The current crowdfunding round has a minimum target of $50,000 and a maximum target of $250,000, and the funds will be used for rail car acquisitions and improvements and related administration and support. America’s Trains is generating escalating revenue through its growing number of journeys in the USA and Canada.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$0

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-67,458

$-68,588

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$16,139

$13,122

Accounts Receivable

$0

$0

Total Assets

$901,798

$896,889

Short-Term Debt

$205,255

$149,085

Long-Term Debt

$469,500

$469,500

Total Liabilities

$674,755

$618,585

Financials as of: 05/03/2021
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Ratings

Analyst Report

Synopsis

There are a wide variety of travel options for those looking to experience new and exciting things. One such option is train travel. Although trains are often used to transport goods, railway systems have also carried passengers since their early development. Many countries use trains for daily travel and luxury tourism, but they’re less common in the US.

America’s Trains is hoping to change that. The company provides luxury tourism by rail. At present, the company has one Amtrak-certified railcar — the Sunflower — to its name. It is a two-level, four-bedroom car with dining and lounges. The company plans to work with additional railroad operators to provide alternative routes.

America’s Trains plans to offer customers multi-day tripsgenerally ranging from six to eight daysto various parts of the US and Canada. 

The company also has other ways to generate revenue. The first is its “Train’Shares” program, which essentially works like a timeshare and is generally a multi-year commitment. In addition, the company wants to provide users the ability to acquire a fractional interest over its railcars that would amount to shared ownership over them. In order to attract customers, the company is working with a network of travel agents as well as an exchange called RCI. In time, it hopes to grow to as many as 38 railcars.

America’s Trains’ current Wefunder raise has been rated an Underweight Deal by the KingsCrowd investment team.

Price

America’s Trains is raising at a pre-money valuation beginning at $947,000 for the first $50,000 invested, and the highest-tier valuation will be $1.1 million. This valuation may look very attractive. However, given that the company’s traction is somewhat offset by the positive perks that it offers investors, our system has rated its price as average on our one-to-five scale.

Market

At first glance, the market opportunity for America’s Trains may seem significant. After all, the global luxury travel market was estimated to be worth $1.8 trillion in 2018. With an annualized growth rate of 4.6%, the space should grow to $2.5 trillion by 2025. The global passenger rail transport market was worth $221.2 billion in 2020. A growth rate of 6% per annum should take it to $307.4 billion by 2025. People across the US took 2.1 billion trips by rail in 2019, and train travel is expected to experience a post-pandemic boost in popularity

Despite these promising numbers, it’s important to keep in mind that America’s Trains is largely focused on the US market and parts of Canada. Given the company’s heavy reliance on Amtrak and Amtrak’s overall business model, Amtrak’s own performance is a good proxy for evaluating America’s Trains’ market opportunity. In 2019, Amtrak generated revenue of $3.5 billion. Due to the COVID-19 pandemic, this shrank to $2.4 billion in 2020. It is difficult to imagine the market opportunity for America’s Trains coming in at or above these figures, unless the company decides to venture to other parts of the world. Given the small market size, our system rated the market opportunity near the low end of our scale.

Team

America’s Trains Founder and CEO Barry Jones previously served as a principal, officer, and manager at various resort, cruise, yacht, and train companies. He has been active in this space since at least 1974. During that time, he also worked on the acquisition, rebuilding, and operation of a hovercraft and worked as a travel industry franchisor. This extensive experience earns the America’s Trains team an  above-average score on our one-to-five scale.

Differentiators

America’s Trains’ main selling point is that it provides multi-day luxury trips. But this is not a novel offering. There are also plenty of existing options for short-term luxury trips. One could argue the biggest difference here is the luxury side of the value proposition, but determining the degree of luxury from one provider to the next is more of a subjective art than a science. Because of this, our system has rated the company just above average on the prospect of differentiation.

Performance

In some respects, America’s Trains has done well. The company has one railcar under its belt that has already been rebuilt and is ready for launch. Management has plans to generate revenue this year and already has relationships with Amtrak and other railroad operators. Completing the product and being nearly prepared for launch is half the battle. However, the company has some performance problems. It has failed to generate any revenue over the past three years. Over the same time frame, it has generated an aggregate net loss of $217,165 with net operating cash outflows matching these losses. Because of this, our system has rated the company about average on the prospect of performance.

Risks

America’s Trains comes with more risk than most startups. In all, the risk profile of the company rates near the high end of our scale. First, a single-founder company always carries significantly more risk than a business built by multiple founders. That is because the company will usually live or die by that single founder. The company also comes with high financial risk — namely, the absence of revenue and the significant aggregate net losses and net cash outflows. 

Lesser risks include market risk and funding risk. On the market side, the opportunity for the company is small, and it faces significant competition. On the funding side, there is the possibility of additional dilution in the future. Expansion will be costly, and the business will likely continue to generate net losses and net cash outflows while it is growing its physical footprint. Growth is limited based on the company’s assets, so unless performance per railcar is very attractive and bookings are high, there is significant risk of a downturn. The picture is also uncertain because of the buyback provision of the company’s shares. This could expose America’s Trains to significant liquidity and solvency concerns at a time when it is particularly vulnerable.

Bearish Outlook

America’s Trains has a narrow market opportunity. The company has a single founder, which exposes it to some undue risk. Management has yet to generate any revenue, and net losses have been significant. The product has little differentiation compared to its competitors. The company is also trying to launch at a time when the tourism industry has seen far better days. Its buyback provision adds additional risk, as it could expose America’s Trains to liquidity or solvency issues. In all, investors should be aware that this is a very risky investment.

Bullish Outlook

Though America’s Trains is a single-founder company, the man in charge does have extensive experience in the industry. The product is at least marginally differentiated from the competition. And the company already has important relationships in place. The valuation looks particularly low compared to most startups, though some might argue that low valuation is justified.

Executive Summary

America’s Trains has an experienced founder, has already established some useful relationships and sports a favorable valuation. On the other hand, there are some major risks to consider. America’s Trains has only one founder, meaning its future is entirely in his hands. The company has only lost money so far, and it is launching in the hard-hit tourism industry while the country is still struggling with the pandemic. While the firm may go on to generate significant returns for its investors, the risks appear quite high. Because of that, our team has rated the company as an Underweight prospect.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Daniel Jones.

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