When you look at NASDAQ:PCAR, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Jul 17, 2024

PACCAR INC (NASDAQ:PCAR) was identified as a decent value stock by our stock screener. NASDAQ:PCAR scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Valuation Assessment of NASDAQ:PCAR

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 7 reflects its valuation:

With a Price/Earnings ratio of 11.30, the valuation of PCAR can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PCAR indicates a rather cheap valuation: PCAR is cheaper than 85.83% of the companies listed in the same industry.
PCAR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.53.
PCAR's Price/Forward Earnings ratio is rather cheap when compared to the industry. PCAR is cheaper than 80.31% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of PCAR to the average of the S&P500 Index (20.94), we can say PCAR is valued slightly cheaper.
Based on the Enterprise Value to EBITDA ratio, PCAR is valued cheaper than 81.89% of the companies in the same industry.
80.31% of the companies in the same industry are more expensive than PCAR, based on the Price/Free Cash Flow ratio.
PCAR has an outstanding profitability rating, which may justify a higher PE ratio.

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:

PCAR's Return On Assets of 12.54% is amongst the best of the industry. PCAR outperforms 87.40% of its industry peers.
PCAR has a better Return On Equity (30.00%) than 92.13% of its industry peers.
With an excellent Return On Invested Capital value of 15.29%, PCAR belongs to the best of the industry, outperforming 86.61% of the companies in the same industry.
The 3 year average ROIC (11.69%) for PCAR is below the current ROIC(15.29%), indicating increased profibility in the last year.
The Profit Margin of PCAR (14.30%) is better than 86.61% of its industry peers.
PCAR's Profit Margin has improved in the last couple of years.
PCAR has a Operating Margin of 18.32%. This is amongst the best in the industry. PCAR outperforms 85.04% of its industry peers.
In the last couple of years the Operating Margin of PCAR has grown nicely.
In the last couple of years the Gross Margin of PCAR has grown nicely.

Exploring NASDAQ:PCAR's Health

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:

PCAR has an Altman-Z score of 3.59. This indicates that PCAR is financially healthy and has little risk of bankruptcy at the moment.
PCAR has a better Altman-Z score (3.59) than 61.42% of its industry peers.
The Debt to FCF ratio of PCAR is 3.84, which is a good value as it means it would take PCAR, 3.84 years of fcf income to pay off all of its debts.
PCAR's Debt to FCF ratio of 3.84 is fine compared to the rest of the industry. PCAR outperforms 62.20% of its industry peers.

Growth Analysis for NASDAQ:PCAR

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:PCAR was assigned a score of 5 for growth:

PCAR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.46%, which is quite impressive.
Measured over the past years, PCAR shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.04% on average per year.
PCAR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.85%.
Measured over the past years, PCAR shows a quite strong growth in Revenue. The Revenue has been growing by 8.38% on average per year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of PCAR contains the most current fundamental analsysis.

Disclaimer

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.