NASDAQ:PCAR, an undervalued stock with good fundamentals.

Last update: Dec 15, 2023

PACCAR INC (NASDAQ:PCAR) has caught the attention of our stock screener as a great value stock. NASDAQ:PCAR excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Analyzing Valuation Metrics

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:PCAR, the assigned 8 reflects its valuation:

With a Price/Earnings ratio of 11.04, the valuation of PCAR can be described as very reasonable.
Based on the Price/Earnings ratio, PCAR is valued cheaper than 86.36% of the companies in the same industry.
PCAR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.64.
82.58% of the companies in the same industry are more expensive than PCAR, based on the Price/Forward Earnings ratio.
PCAR's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.21.
PCAR's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PCAR is cheaper than 80.30% of the companies in the same industry.
75.76% of the companies in the same industry are more expensive than PCAR, based on the Price/Free Cash Flow ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PCAR has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as PCAR's earnings are expected to grow with 13.05% in the coming years.

What does the Profitability looks like for NASDAQ:PCAR

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:PCAR scores a 8 out of 10:

With an excellent Return On Assets value of 10.79%, PCAR belongs to the best of the industry, outperforming 84.85% of the companies in the same industry.
PCAR has a Return On Equity of 25.62%. This is amongst the best in the industry. PCAR outperforms 87.12% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.69%, PCAR belongs to the top of the industry, outperforming 84.85% of the companies in the same industry.
The 3 year average ROIC (8.30%) for PCAR is below the current ROIC(14.69%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 12.01%, PCAR belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
In the last couple of years the Profit Margin of PCAR has grown nicely.
With an excellent Operating Margin value of 17.47%, PCAR belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
PCAR's Operating Margin has improved in the last couple of years.

Deciphering NASDAQ:PCAR's Health Rating

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:PCAR was assigned a score of 5 for health:

An Altman-Z score of 3.52 indicates that PCAR is not in any danger for bankruptcy at the moment.
PCAR has a Altman-Z score of 3.52. This is in the better half of the industry: PCAR outperforms 63.64% of its industry peers.
With a decent Debt to FCF ratio value of 4.25, PCAR is doing good in the industry, outperforming 62.88% of the companies in the same industry.

Growth Analysis for NASDAQ:PCAR

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:PCAR, the assigned 5 reflects its growth potential:

The Earnings Per Share has grown by an impressive 74.30% over the past year.
Looking at the last year, PCAR shows a very strong growth in Revenue. The Revenue has grown by 24.85%.
The Revenue has been growing by 8.18% on average over the past years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of PCAR for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.