Paccar (PCAR) AI Stock Analysis

• Market Cap: $46.27B
• Dividend Yield: 1.42%
• Average Volume (3M): 3.36M
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.89
• Revenue Growth: -4.29%
• EPS Growth: -9.76%
• Country: US
• Employees: 30,100
• Sector: Industrials
• Sector Strength: 61
• Industry: Agricultural - Machinery
• EPS (TTM): 7.90
• Shares Outstanding: 524,934,750
• 10 Day Avg. Volume: 3,552,852
• 30 Day Avg. Volume: 3,362,834
• PEG Ratio: 0.85
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.51
• Price to Cash Flow (P/CF): 8.80
• P/FCF Ratio: 8.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $112.27
• Price Target Upside: 26.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Paccar demonstrates robust financial health with strong revenue growth, efficient cash flow management, and strategic market positioning. The stock appears fairly valued, and the company has a positive outlook, bolstered by strategic investments and market share gains. However, technical indicators suggest potential underperformance, and challenges such as reduced truck deliveries and geopolitical issues could impact future performance.

Positive Factors

Earnings Performance

Earnings 10yr CAGR is 12%, vs industrial average of high singles, and the company pays a far larger dividend than most.

Market Recovery

The underlying Class 8 truck market is on the cusp of a recovery in North America, driven by replacement demand and upcoming regulatory changes.

Revenue Growth

PACCAR has grown revenue at a 5-6% CAGR, which compares very favorably with industrials.

Negative Factors

Investor Concerns

Investor pushback post earnings has centered on the moderation in the implied revenue per truck in 4Q24.

Political and Regulatory Risks

Political risks and uncertainties related to EPA ‘27 remain, presenting a risk to current industry pre-buy estimates.

Pricing Risk

Pricing risk remains near-term, and truck capex budgets are flattish.

Paccar Business Overview & Revenue Model

Company Description

PACCAR Inc is a leading global technology company in the design, manufacture, and customer support of high-quality light-, medium-, and heavy-duty trucks under the Kenworth, Peterbilt, and DAF nameplates. Headquartered in Bellevue, Washington, PACCAR also provides financial services and distributes truck parts related to its principal business. The company serves customers worldwide across a variety of sectors, including transportation, logistics, and construction.

How the Company Makes Money

PACCAR generates revenue primarily through the sale of trucks and related parts. Its key revenue streams include the manufacturing and sale of light-, medium-, and heavy-duty trucks, which are marketed under the Kenworth, Peterbilt, and DAF brands. Additionally, the company earns income from its aftermarket parts business, which supplies replacement parts and accessories for trucks. PACCAR also has a financial services division that provides financing and leasing options for its customers, contributing to the overall revenue. Significant partnerships with suppliers and dealers, as well as its global reach, help bolster its sales and market presence. The company's strong brand reputation and commitment to quality and innovation are critical factors in its earnings.

Paccar Financial Statement Overview

Summary

Paccar exhibits a strong financial position with consistent revenue and profit growth, improved capital structure, and robust cash flow generation. The elimination of debt enhances its financial flexibility, while high margins and returns indicate operational excellence. However, the decrease in gross and net margins in the latest year needs monitoring, as does the continued negative cash flow from investing activities.

Income Statement

Paccar has demonstrated strong revenue growth, with a significant increase from $18.7 billion in 2020 to $31.6 billion in 2024. Gross profit margin improved to 17.4% in 2024 from 13.1% in 2020, indicating enhanced operational efficiency. The net profit margin of 13.2% in 2024 is robust, supported by consistent EBIT and EBITDA margins. Overall, the company shows strong profitability and growth trajectory, although margins slightly decreased in the latest period, which could be a point of concern if it continues.

Balance Sheet

Paccar's balance sheet reflects a sound equity position, with stockholders' equity rising from $10.4 billion in 2020 to $17.5 billion in 2024. The company eliminated its total debt by 2024, significantly improving its debt-to-equity ratio, which was 1.38 in 2020. This increased financial stability, coupled with a return on equity of 23.8% in 2024, indicates effective use of shareholder funds. However, the equity ratio of 40.3% suggests room for improvement in asset financing.

Cash Flow

Paccar's free cash flow increased from $1.3 billion in 2020 to approximately $2.9 billion in 2024, marking robust cash generation. The operating cash flow to net income ratio of 1.11 in 2024 suggests strong cash conversion efficiency. The company's free cash flow to net income ratio of 0.70 indicates healthy cash retention for growth and investment. Despite these positives, the cash flow from investing activities continues to be negative, indicating substantial reinvestment in the business.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
31.56B	35.13B	28.82B	23.52B	18.73B
	Gross Profit
5.49B	7.14B	4.75B	3.29B	2.45B
	EBIT
4.46B	6.04B	3.62B	2.27B	1.53B
	EBITDA
5.81B	6.63B	4.41B	3.27B	2.58B
	Net Income Common Stockholders
4.16B	4.60B	3.01B	1.87B	1.30B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.65B	9.00B	6.16B	4.81B	4.83B
	Total Assets
43.42B	40.82B	33.28B	29.30B	28.29B
	Total Debt
15.89B	14.38B	16.19B	10.76B	11.31B
	Net Debt
-7.06B	7.20B	10.03B	7.33B	7.77B
	Total Liabilities
25.91B	24.94B	20.11B	17.86B	17.87B
	Stockholders Equity
17.51B	15.88B	13.17B	11.44B	10.42B
Cash Flow		Free Cash Flow
2.90B	2.93B	1.64B	553.90M	1.35B
	Operating Cash Flow
4.64B	4.19B	3.03B	2.19B	2.99B
	Investing Cash Flow
-4.49B	-2.87B	-2.03B	-1.36B	-1.88B
	Financing Cash Flow
-123.10M	1.10B	304.90M	-882.90M	-1.81B

Paccar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 88.77
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCAR, the sentiment is Negative. The current price of 88.77 is below the 20-day moving average (MA) of 96.17, below the 50-day MA of 102.15, and below the 200-day MA of 101.49, indicating a bearish trend. The MACD of -2.10 indicates Positive momentum. The RSI at 41.78 is Neutral, neither overbought nor oversold. The STOCH value of 31.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCAR.

Paccar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMI	73 Outperform	$40.85B	10.45	41.27%	2.67%	0.14%	444.36%
F	72 Outperform	$36.74B	6.32	13.42%	8.63%	5.00%	35.92%
GM	72 Outperform	$45.51B	7.18	9.44%	1.05%	9.08%	-15.25%
PCAR	70 Outperform	$46.27B	11.15	24.93%	1.42%	-4.29%	-9.76%
OSK	68 Neutral	$5.76B	8.60	17.34%	2.39%	11.36%	13.78%
Sector *	62 Neutral	$7.67B	13.25	3.04%	3.47%	3.63%	-13.99%
DAN	57 Neutral	$1.74B	―	-3.92%	3.85%	-2.57%	-248.28%

Paccar Corporate Events

Paccar Announces Leadership Changes with CFO Retirement

On April 1, 2025, PACCAR announced that Harrie C. A. M. Schippers, the company’s President and Chief Financial Officer, will retire on June 2, 2025, after 39 years of service. Brice J. Poplawski, who has been with the company for 27 years, will be promoted to Senior Vice President and Chief Financial Officer, effective the same date. Additionally, Kevin D. Baney, Executive Vice President, will take on responsibilities for PACCAR Financial Services and Investor Relations.