Facts You Need to Understand PACCAR Stock

PACCAR logged a -3.6% change during today's afternoon session, and is now trading at a price of $68.3 per share. The S&P 500 index moved -1.09% and the Nasdaq posted a -0.42% change.

PACCAR shares moved 22.88% over the last 52 weeks, with a high of $76.72 and a low of $49.41. During this time, the stock outperformed the S&P 500 index by 34.15%. As of January 2022, the company's 50-day average price is $72.0. PACCAR Inc is an American Fortune 500 company and counts among the largest manufacturers of medium- and heavy-duty trucks in the world. PACCAR is engaged in the design, manufacture and customer support of light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt, Leyland Trucks, and DAF nameplates. The large-cap Industrials company is based in Bellevue, WA. PACCAR has returned a 1.38% dividend yield over the last 12 months.

The Company Has a Steady Stream of Positive Cash Flows:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $25,600 $18,728 $23,522 $28,820
Revenue Growth n/a -26.84% 25.6% 22.52%
Operating Margins 91.35% 88.3% 91.95% 94.2%
Operating Margins Growth n/a -3.34% 4.13% 2.45%
Net Margins 9.33% 6.95% 7.93% 10.45%
Net Margins Growth n/a -25.51% 14.1% 31.78%
Earnings Per Share $6.88 $3.75 $5.36 $2.88
EPS Growth n/a -45.49% 42.93% -46.27%
Diluted Shares (MM) 347 347 348 1,045
Free Cash Flow (MM) $720 $1,330 $601 $1,656
FCF Growth n/a 84.78% -54.79% 175.53%
Capital Expenditures (MM) $2,141 $1,658 $1,586 $1,370
Net Debt / EBITDA 1.61 2.61 2.04 1.49

PACCAR Is Reasonably Priced:

Compared to the Industrials sector's average of 20.49, PACCAR has a trailing twelve month P/E ratio of 18.31 and, according to its EPS guidance of 5.62, an expected P/E ratio of 12.15. PACCAR's PEG ratio is 1.61 based on its 11.4% annual average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

However, PACCAR is likely undervalued in terms of its equity because its P/B ratio is 2.772 compared to its sector average of 3.78. The company's shares are currently trading 27.97% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 5.02 * 25.22) = $53.37

Most of the Market Indicators on PACCAR Are Negative:

17 analysts are following PACCAR and have set target prices ranging from $60.67 to $98.0 per share. On average, they have given the company a rating of hold. At the current price of $68.3, PCAR is trading -9.69% away from its average analyst target price of $75.63 per share, implying an analyst consensus of some upside potential for the stock.

The company has no information on the number of shares sold short since 1% of the company's shares are tied to short positions. Institutions own 70% of PACCAR's shares, while the insider ownership rate stands at 2%. The biggest shareholder is None with a None stake in the company worth approximately None.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.