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PACCAR Inc. (PCAR)

Fair Value
IndustrialsFarm & Heavy Construction MachineryUnited States

Fundamental

64

Price

$111.18

Market Cap

$58.25B

Part 1 · What the company is worth

Overview

PACCAR designs and manufactures heavy- and medium-duty trucks under the Kenworth, Peterbilt and DAF brand names, sold through a network of independent dealers across North America, Europe and other markets. Beyond building trucks, it also sells replacement parts to keep existing fleets running and lends money to dealers and truck buyers through its own finance arm, so a customer can buy a truck, service it and finance it all through PACCAR.

How it makes money

Most revenue comes from selling new trucks outright to fleets and owner-operators, a business with thin margins that swings with how many trucks the industry orders each year. Parts sales are steadier and more profitable, since a truck already on the road needs maintenance regardless of the economic cycle, and the financial services arm earns interest income on loans and leases, adding a third, more stable stream on top of manufacturing.

Revenue by segment

Truck68.1%

Manufacture and sale of Kenworth, Peterbilt and DAF heavy- and medium-duty trucks, the core and most cyclical part of the business.

Parts24.2%

Replacement parts sold to keep the large existing fleet of PACCAR trucks running, a steadier and higher-margin business than new truck sales.

Financial Services7.8%

Loans and leases provided to dealers and truck buyers across North America, Europe, Australia and South America to finance PACCAR vehicles.

Competitive moat

Scale · Narrow

Building heavy trucks at scale requires an established dealer network, decades of engineering and emissions-compliance investment, and manufacturing capacity that a new entrant cannot assemble quickly, keeping the field limited to a handful of global players. That barrier protects PACCAR's position but does not remove genuine competition: Daimler Truck, Traton's Volvo and Scania brands, and Navistar all fight for the same fleet customers.

What drives demand

Cyclical

Truck orders follow the freight cycle closely: when shipping volumes and freight rates are strong, fleets replace and expand their trucks, and when freight demand softens, orders can fall sharply within a year, as PACCAR's own truck segment revenue decline in 2025 showed. Parts and financial services smooth this out somewhat, but the core manufacturing business remains genuinely cyclical.

Key risks

  • Truck order cyclicality — Truck segment revenue fell 14% year over year in the fourth quarter of 2025 as freight market conditions weakened, illustrating how quickly the core business can contract in a downturn.
  • Competition from other global truck makers — Daimler Truck, Traton's Volvo, Scania and Navistar brands compete directly for the same fleet and owner-operator customers across PACCAR's core markets.
  • Emissions and regulatory compliance costs — Tightening emissions standards in North America and Europe require continual investment in new engine and powertrain technology, adding cost and execution risk to every truck generation.
  • Tariffs and global supply chain exposure — PACCAR sources components and sells trucks across multiple countries, so changes in tariffs or trade policy can raise costs or disrupt production and sales in a given region.
  • Credit risk in the finance arm — PACCAR Financial Services holds a large portfolio of loans and leases to truck buyers; a downturn that hurts trucking businesses broadly would also raise defaults on that portfolio.

The case for

Buyers argue that PACCAR Parts keeps delivering record, high-margin revenue that cushions the cyclical truck business, that decades of engineering and dealer relationships make the company one of only a handful of credible global heavy-truck makers, and that Financial Services adds a steady profit stream through the cycle.

The case against

Sellers worry that the core truck business is genuinely cyclical and already showing a double-digit revenue decline as freight markets soften, that emissions regulation keeps forcing costly technology investment, and that competition from Daimler Truck and Traton's brands limits pricing power in a downturn.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

Compare

Generated on September 19, 2026 with claude-haiku-4-5 — shared with all users

P/E: 12.5Score: 71Market cap: $31.82B

Its Freightliner and Western Star brands are the largest sellers of Class 8 trucks in the United States and Canada, the same fleet customers Kenworth and Peterbilt sell to, and its Mercedes-Benz Trucks unit is DAF's biggest rival in Europe.

AB VolvoNot tracked

Volvo Trucks and Mack together hold about 18% of the North American Class 8 market and Volvo Trucks is among the top European heavy-duty brands, competing with PACCAR on long-haul and vocational trucks plus the parts and service business that follows them.

TRATON SE8TRA

Through International Motors (formerly Navistar) in North America and MAN and Scania in Europe, TRATON sells heavy and medium trucks to the same haulage fleets on both continents where PACCAR operates.

Iveco Group N.V.Not tracked

Iveco is one of the six principal competitors DAF faces in the European commercial vehicle market, disputing the same heavy- and medium-duty fleet orders across the European Union.

Balance Sheet & Liquidity

Revenue

$27.82B

Trailing 12 months (through 6/30/2026)

Net Income

$2.50B

Trailing 12 months (through 6/30/2026)

Free Cash Flow

$3.67B

Total Equity

$19.26B

Total Liabilities

$25.07B

Current Ratio

0.71

Interest Coverage

-

Debt/EBITDA

4.53

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

General caseFairly Valued

Fair Value

$128.75

Current Price

$111.18

Margin of Safety

+13.6%

Fair Value Range

$86.39 - $171.11

Spread across the valuation methods used, not a statistically calibrated confidence interval.

Estimation Methods

Analyst price target:$144.80
Discounted cash flow (DCF):$178.15
Earnings multiple (P/E):$78.67
Graham growth formula:$140.87
Earnings power value (EPV):$54.50
Justified P/B:$48.62
Dividend discount (Gordon):$47.43
P/FFO, funds from operations:$84.32
Mid-cycle earnings:Not enough data to compute it
Revenue multiple:$149.93
Analyst Consensus:Buy (11B / 14H / 1S)
Last Earnings Surprise:+3.53%

Valuation Metrics

P/E Ratio

23.07

ROE

12.3%

P/B Ratio

2.84

P/FCF

15.64

Gross Margin

20.0%

ROIC

-

Profitability Radar

Value Creation (Economic Moat)

ROIC

-

WACC

7.8%

ROIC − WACC

-

Fundamental Analysis Criteria

Passed (16)

  • EPS shows upward trend
  • Price CAGR 10.16%
  • P/FCF 15.64
  • P/B Ratio 2.84
  • Debt/Equity ratio
  • Positive Free Cash Flow
  • CapEx intensity
  • Debt/EBITDA
  • Return on Tangible Assets
  • Low reliance on intangibles
  • ROE 12.7%
  • Revenue Growth 5Y 8.7%
  • PEG Ratio 1.86
  • Earnings Quality (OCF/NI) 1.73
  • Share Dilution -0.0%
  • Piotroski F-Score 5/9

Failed (7)

  • EPS CAGR 1.77%
  • Gross Margin 20.0%
  • Price below Graham Number
  • DCF valuation (Overvalued)
  • Analyst Consensus 42% Buy
  • Earnings Surprise avg -1.5%
  • Net Margin Trend 9.0% vs 9.9%

Unavailable (5)

  • ROIC NaN%
  • Dividend Payout NaN%
  • Operating Margin NaN%
  • Current Ratio
  • Interest Coverage

Piotroski F-Score

5/9

Mixed signals: some areas need attention

score
criteria

Earnings Quality

1.73

High quality: earnings backed by cash

Share Dilution

0.0%

Buying back shares. Shareholder friendly

Institutional Holdings

Governance

Executive Team

NameTitleAge
Mr. R. Preston FeightCEO & Director57
Mr. Kevin D. BaneyPresident54
Mr. Brice J. PoplawskiSenior VP & CFO60
Mr. Mark C. PigottExecutive Chairman71
Mr. John N. RichExecutive VP & CTO55
Ms. A. Lily LeyVP & Chief Information Officer59
Mr. Ken HastingsSenior Director of Investor Relations-
Mr. Michael K. WaltonVP & General Counsel59
Paulo Henrique BolgarVP & Chief Human Resources Officer56
Laura J. BlochSenior Vice President47

Audit Risk

2

Board Risk

9

Compensation Risk

4

Shareholder Rights Risk

5

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Documents

  • Annual Report (10-K)

    A yearly overview of the business, its financial results, and the risks it faces.

    Filed on 2026-02-18

    View document
  • Quarterly Report (10-Q)

    A snapshot of financial performance for the most recent three-month period.

    Filed on 2026-07-29

    View document
  • Current Report (8-K)

    An announcement of a major event, such as a leadership change or big news.

    Filed on 2026-07-28

    View document

via SEC EDGAR

Income History

via SEC EDGAR

Latest News

Recent headlines for PCAR, sourced from Markets Gazette.

  • 16d agoNEUTRAL
    Nasdaq-100® Inside the Index: PACCAR (PCAR)

    This Nasdaq-100® Inside the Index feature delves into PACCAR's diverse operations, encompassing its truck manufacturing, parts sales, and financing segments. Key factors influencing its future outlook include the current freight cycle dynamics, record-breaking parts revenue, upcoming 2027 emissions regulations, and advancements in new powertrain technologies. Investors should monitor these elements for potential impacts on PACCAR's performance within the index.

via Markets Gazette