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Paccar (PCAR)
NASDAQ:PCAR
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Paccar (PCAR) AI Stock Analysis

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PCAR

Paccar

(NASDAQ:PCAR)

Rating:83Outperform
Price Target:
$118.00
â–²(16.18%Upside)
Paccar's strong financial performance, attractive valuation, and positive earnings call sentiment drive a high overall score. The stock benefits from solid profitability, strategic investments, and positive technical indicators, although market challenges such as tariff uncertainties pose some risks.
Positive Factors
Competitive Position
PCAR is viewed as a high-quality cyclical with a favorable competitive position, newer truck models expected to gain market share, and a best-in-class strategy for alternative drivetrains.
Financial 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.
Negative Factors
Market Competition
Increased competition from companies like Volvo and Daimler Truck, which have different sourcing strategies, may affect PCAR's market position.
Regulatory Uncertainty
The uncertainty surrounding NOx emission regulations and potential additional costs may burden an already weakening customer base.
Tariff Impact
Potential Section 232 tariffs could significantly impact PCAR's gross margin unless truck prices are raised, adding financial pressure.

Paccar (PCAR) vs. SPDR S&P 500 ETF (SPY)

Paccar Business Overview & Revenue Model

Company DescriptionPACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Europe, Mexico, South America, Australia, and internationally. It operates through three segments: Truck, Parts, and Financial Services. The Truck segment designs, manufactures, and distributes trucks for the over-the-road and off-highway hauling of commercial and consumer goods. It sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full-service leasing operations under the PacLease trade name, as well as provides finance and leasing products and services to customers and dealers. This segment also offers equipment financing and administrative support services for its franchisees; retail loan and leasing services for small, medium, and large commercial trucking companies, as well as independent owners/operators and other businesses; and truck inventory financing services to independent dealers. In addition, this segment offers loans and leases directly to customers for the acquisition of trucks and related equipment. The company also manufactures and markets industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington.
How the Company Makes MoneyPACCAR makes money through several key revenue streams. The primary source is the sale of trucks, which includes a wide range of models designed for various applications and markets. Additionally, the company generates significant revenue from its parts business, which supplies aftermarket parts to support the maintenance and repair of its trucks. Financial services also contribute to the company's earnings, offering financing and leasing solutions to customers purchasing its vehicles. Furthermore, PACCAR's global reach and strategic partnerships with suppliers and dealers enhance its ability to capture market share and maintain strong profit margins.

Paccar Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Highlights revenue contributions from different business segments, providing insight into which areas drive growth and profitability, and where strategic focus may be needed.
Chart InsightsPACCAR's Truck segment is experiencing a downturn, with revenues declining from their peak in 2023, influenced by economic uncertainties and tariffs impacting costs and pricing. Conversely, PACCAR Parts continues to thrive, achieving record revenues, driven by connected vehicle growth and operational efficiencies. The 'Other' segment shows volatility, with a significant drop in 2025. Despite challenges, strategic investments in technology and innovation signal a focus on long-term growth, though litigation costs and tariff impacts present ongoing risks.
Data provided by:Main Street Data

Paccar Earnings Call Summary

Earnings Call Date:Jul 22, 2025
(Q2-2025)
|
% Change Since: 9.32%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment due to record revenues and strong financial performance in parts and financial services, along with a positive market outlook. However, challenges such as tariff uncertainties and a reduced market outlook in South America were noted.
Q2-2025 Updates
Positive Updates
Record Quarterly Revenues at PACCAR Parts
PACCAR Parts achieved record quarterly revenues of $1.72 billion and excellent quarterly pretax income of $417 million, despite a flat parts market.
Strong Financial Services Performance
PACCAR Financial increased pretax income to $123 million, up from $111 million a year earlier, reflecting strong credit quality and improving used truck results.
Capital Investments and R&D
PACCAR is planning capital investments in the range of $750 million to $800 million and R&D in the range of $450 million to $480 million, focusing on next-generation clean diesel and alternative powertrains.
Positive North American Market Outlook
PACCAR anticipates the North American market will strengthen as tariff policies become certain, the truckload market gains momentum, and customers begin to anticipate the 2027 NOx Emission standards.
Negative Updates
Tariff Uncertainty Impacting Margins
Given the uncertain tariff structure, it's difficult to forecast third quarter margins, which could be around 13%, down from 13.9% in the second quarter.
Reduced South American Market Outlook
The forecast for the South American above 16-tonne truck market has been reduced due to economic conditions in Brazil, including a 400-basis point interest rate increase.
Company Guidance
During PACCAR's second quarter 2025 earnings call, the company provided guidance on several metrics, highlighting strong performance across various divisions. PACCAR achieved revenues of $7.5 billion and adjusted net income of $724 million, with PACCAR Parts recording record quarterly revenues of $1.72 billion and a pretax income of $417 million. PACCAR Financial Services also reported a robust pretax income of $123 million. The company projected U.S. and Canadian Class 8 market size for the year to be between 230,000 and 260,000 trucks, while the 2025 European above 16-tonne market is estimated to range from 270,000 to 300,000 vehicles. PACCAR delivered 39,300 trucks in the second quarter and anticipates delivering approximately 32,000 to 33,000 in the third quarter, reflecting normal summer shutdowns in Europe. The company's Truck, Parts, and Other gross margins were 13.9% in the second quarter, with an anticipated third-quarter margin of around 13%, assuming current market conditions persist. Additionally, PACCAR plans capital investments between $750 million and $800 million and R&D expenditures ranging from $450 million to $480 million, focusing on next-generation clean diesel, alternative powertrains, and advanced driver assistance systems.

Paccar Financial Statement Overview

Summary
Paccar shows strong financial performance with solid profitability, efficient asset utilization, and robust cash generation. Despite a slight revenue decline and moderate leverage, the company's high return on equity and strong cash position support financial stability and growth potential.
Income Statement
85
Very Positive
Paccar's income statement shows solid profitability with a gross profit margin of 17.8% and a net profit margin of 10.7% for TTM. Despite a slight decline in revenue by 3.9% compared to the previous annual report, the company maintains strong EBIT and EBITDA margins at 13.3% and 16.0%, respectively. The consistent profitability and efficient cost management highlight the company's strong competitive position in the industry.
Balance Sheet
78
Positive
The balance sheet reflects a healthy financial structure with a debt-to-equity ratio of 0.87, indicating moderate leverage. The equity ratio stands at 42.2%, demonstrating a solid capital position. Return on equity is robust at 19.3%, showcasing effective utilization of shareholders' equity. However, the high absolute levels of debt could pose risks if interest rates rise or market conditions deteriorate.
Cash Flow
82
Very Positive
Paccar's cash flow statement is strong, with a free cash flow to net income ratio of 0.68, indicating good cash generation relative to profits. The operating cash flow to net income ratio of 1.18 suggests efficient conversion of earnings into cash. Although free cash flow declined by 18.4%, the company maintains a solid cash position, supporting future investments and debt servicing.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue33.66B35.13B28.82B23.52B18.73B
Gross Profit5.93B7.14B4.75B3.29B2.45B
EBITDA5.81B6.63B4.41B3.27B2.58B
Net Income4.16B4.60B3.01B1.87B1.30B
Balance Sheet
Total Assets43.42B40.82B33.28B29.30B28.29B
Cash, Cash Equivalents and Short-Term Investments9.65B9.00B6.16B4.81B4.83B
Total Debt15.89B14.38B16.19B10.76B11.31B
Total Liabilities25.91B24.94B20.11B17.86B17.87B
Stockholders Equity17.51B15.88B13.17B11.44B10.42B
Cash Flow
Free Cash Flow2.90B2.93B1.64B553.90M1.35B
Operating Cash Flow4.64B4.19B3.03B2.19B2.99B
Investing Cash Flow-4.49B-2.87B-2.03B-1.36B-1.88B
Financing Cash Flow-123.10M1.10B304.90M-882.90M-1.81B

Paccar Technical Analysis

Technical Analysis Sentiment
Positive
Last Price101.57
Price Trends
50DMA
95.16
Positive
100DMA
94.89
Positive
200DMA
100.81
Positive
Market Momentum
MACD
1.34
Negative
RSI
65.52
Neutral
STOCH
90.26
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCAR, the sentiment is Positive. The current price of 101.57 is above the 20-day moving average (MA) of 97.27, above the 50-day MA of 95.16, and above the 200-day MA of 100.81, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 65.52 is Neutral, neither overbought nor oversold. The STOCH value of 90.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PCAR.

Paccar Risk Analysis

Paccar disclosed 17 risk factors in its most recent earnings report. Paccar reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Paccar Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$53.25B17.4016.77%3.90%-11.90%-38.21%
77
Outperform
$8.23B13.6615.24%1.52%5.95%-10.59%
72
Outperform
$139.52B24.9224.07%1.22%-22.26%-37.83%
70
Outperform
$202.01B20.8455.67%1.32%-5.58%-7.37%
66
Neutral
$16.50B15.9013.26%1.88%-21.99%-52.11%
58
Neutral
HK$14.94B4.73-2.78%5.01%3.80%-54.55%
58
Neutral
$8.24B46.40-13.60%1.03%-23.02%-152.78%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PCAR
Paccar
101.57
7.17
7.60%
AGCO
Agco
112.38
11.59
11.50%
CAT
Caterpillar
433.75
94.59
27.89%
CNH
CNH Industrial
13.31
3.38
34.04%
DE
Deere
517.38
145.85
39.26%
OSK
Oshkosh
128.71
14.97
13.16%

Paccar Corporate Events

Executive/Board ChangesShareholder Meetings
Paccar Elects Directors and Approves Executive Compensation
Neutral
May 2, 2025

On April 28, 2025, Paccar‘s Board of Directors approved Long Term Performance Cash Awards for its executive officers for the 2022-2024 cycle, significantly impacting their total compensation. The annual meeting of stockholders held on April 29, 2025, resulted in the election of directors and approval of executive compensation, while a proposal on excessive golden parachutes was not passed.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 24, 2025