PCAR

Industrials

Paccar

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$15.0B	$8.1B	$10.3B	$16.4B	$17.1B	$17.1B	$19.0B	$19.1B	$17.0B	$19.5B	$23.5B	$25.6B	$18.7B	$23.5B	$28.8B	$35.1B	$33.7B	$28.4B	-15.5%
Gross Profit	—	—	—	—	—	—	—	—	—	—	—	—	—	—	$5.5B	$8.2B	$7.6B	$5.7B	-24.8%
Gross Margin	—	—	—	—	—	—	—	—	—	—	—	—	—	—	19.2%	23.4%	22.6%	20.1%	-2.5pp
Net Income	$1.0B	$111.9M	$457.6M	$1.0B	$1.1B	$1.2B	$1.4B	$1.6B	$521.7M	$1.7B	$2.2B	$2.4B	$1.3B	$1.9B	$3.0B	$4.6B	$4.2B	$2.4B	-42.9%
Net Margin	6.8%	1.4%	4.4%	6.4%	6.5%	6.8%	7.2%	8.4%	3.1%	8.6%	9.3%	9.3%	6.9%	7.9%	10.4%	13.1%	12.4%	8.4%	-4.0pp
Free Cash Flow	$842.1M	$1.2B	$1.4B	$1.3B	$1.0B	$1.9B	—	—	$1.9B	$2.3B	$2.5B	$2.3B	$2.4B	$1.6B	$2.5B	$3.5B	$3.8B	$3.7B	-3.4%
FCF Margin	5.6%	15.4%	13.4%	7.7%	5.9%	10.9%	—	—	11.3%	11.8%	10.8%	8.9%	13.0%	6.9%	8.7%	9.9%	11.3%	12.9%	+1.6pp
EPS (Diluted)	$2.78	$0.31	$1.25	$2.86	$3.12	$3.30	$3.82	$4.51	$1.48	$4.75	$6.24	$6.87	$3.74	$5.32	$5.75	$8.76	$7.90	$4.51	-42.9%

Cash & Equiv.$3.4B

4 min read

1. THE BIG PICTURE

Paccar is a high-quality cyclical operator currently weathering a significant contraction, evidenced by a $1 billion year-over-year revenue drop in the most recent quarter (8-K). Its resilience rests on a "razor-and-blade" model: while new truck deliveries are fluctuating, Paccar is generating record revenues from its high-margin aftermarket parts and financial services arms, which keep Paccar profitable even when the freight market stalls.

2. WHERE THE RISKS HIT HARDEST

Paccar’s brand reputation for "high-quality products" is directly threatened by its supply chain concentration. The loss of supply from just four companies—Cummins, Eaton, ZF, or Magna—would have a "material effect" on results by interrupting truck production (10-K Item 1). Furthermore, its leadership in "technologically advanced products" faces a hurdle in the climate change transition; the shift from diesel to alternative powertrains creates significant uncertainty regarding the success of Paccar’s R&DR&DResearch & Development — spending on creating new products or technologies programs and the ultimate cost of specialized components like batteries (10-K Item 1A). Finally, the record revenues in Financial Services are at risk from credit defaults if the economic conditions that slowed truck demand also prevent dealers and customers from meeting loan obligations (10-K Item 1A).

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a stark divergence between equipment sales and service income. While the core Truck segment is struggling—dragging Paccar to a -15.5% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth rate, the worst among its peers—the Parts and Financial Services segments both achieved record quarterly revenues in late 2025 (8-K, XBRL). This suggests Paccar is successfully extracting more value from its existing global fleet of Kenworth, Peterbilt, and DAF trucks even as new orders decline.

However, Paccar’s margins remain the lowest in its peer group, with a 9.3% net margin compared to 21.6% at Illinois Tool Works (Peer Table). This is largely a function of business mix; Paccar’s heavy-manufacturing model is structurally more capital-intensive than the diversified industrial models of its peers. Management attributes the current slowdown to "clarification of tariff policy" and emissions regulations, but they expect freight fundamentals to improve, leading to a stronger market in 2026 (8-K).

4. IS IT WORTH IT AT THIS PRICE?

At 17.7x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Paccar is the "cheapest" stock in its peer group, trading at a 31% discount to the peer median of 25.7x (Peer Table). At this price, the market is pricing in approximately 4.6% long-term growth (CAPM analysis). This valuation is attractively valued because the discount reflects the recent -15.5% revenue contraction while overlooking Paccar's healthy 12.8% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin, which is significantly higher than Deere’s 3.4% (Peer Table).

The sensitivity analysis suggests that if growth were to slow to a GDP-pace of 2.5%, the justified multiple would fall to 12.9x, implying roughly 27% downside. However, Paccar’s 86-year streak of profitability and its projected $450–$500 million R&DR&DResearch & Development — spending on creating new products or technologies spend for 2026 suggest it has the resources to meet the market's 4.6% growth expectation as the cycle turns (8-K, 14A Proxy).

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if 2026 U.S. and Canada Class 8 industry retail sales fall below the projected 230,000–270,000 truck range, signaling a multi-year downturn (8-K).
Constructive if Paccar Parts pretax income begins to grow again (it fell from $428.2 million to $415.0 million year-over-year), proving the aftermarket can offset truck sales volatility (8-K).
Cautious if capital investments exceed the $775 million projection without a measurable increase in zero-emissions truck market share (8-K).

6. BOTTOM LINE

Structural Advantage: Paccar maintains a dominant competitive position through its premium brand equity and a high-margin aftermarket ecosystem that captures revenue across the entire lifecycle of the vehicle. Bottom Line: Paccar is a disciplined cyclical leader currently offered at a 31% discount to peers, making it a compelling play for investors betting on a 2026 recovery in global freight.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Commercial Truck Market Demand: Paccar’s financial results are highly sensitive to economic conditions in North America and Europe. Yearly demand for vehicles can fluctuate more significantly than overall gross domestic product, directly impacting sales volume.
Production Costs and Inflation: Paccar faces variability in material and commodity costs. Inflationary pressures, labor availability, and component shortages can disrupt production capacity and adversely affect financial results.
Climate Change Transition: The shift from diesel combustion to alternative powertrains (battery-electric, hybrid, hydrogen fuel cell, and hydrogen combustion) introduces uncertainty regarding the success of Paccar’s research and development programs and the cost of specialized components like batteries and hydrogen fuel cells.
Financial Services Competition: Paccar’s Financial Services segment competes with banks and other finance companies that may offer lower interest rates, potentially leading to decreased margins or lower market share for the segment.
Cybersecurity and Data Integrity: Paccar relies on complex information technology systems, including telematics for over-the-air updates. Breaches or disruptions could lead to the theft of intellectual property, unauthorized disclosure of confidential information, and potential litigation.

2. Company-Specific Risks

Financial Services Credit Risk: Paccar is exposed to losses if customers or dealers fail to meet loan or lease obligations; while these assets are secured by equipment, the value of that collateral may be insufficient to recover the full amount owed.
Interest-Rate Sensitivity: The Financial Services segment faces margin compression if interest rates rise, as the segment must manage the interest-rate characteristics of its debt against its finance receivables.
AI Integration: Paccar is deploying AI for predictive analytics and vehicle service parameters; failure to integrate these tools in a cost-effective and compliant manner could adversely affect operational costs and performance.
Supplier Dependency: Many of Paccar’s suppliers also serve automotive manufacturers, meaning factors affecting the automotive industry can disrupt Paccar’s supply chain and delivery performance.

3. Regulatory/Legal Risks

Emissions Compliance: Paccar is subject to strict standards from the EPA, the European Union, and the California Air Resources Board (CARB). Failure to meet EU CO2 reduction targets would result in significant fines.
Trade and Anti-Corruption Laws: Paccar’s multinational operations are subject to extensive international trade, competition, and anti-corruption regulations, which impose significant compliance costs.
Product Recalls: Paccar’s products are subject to mandatory recalls for safety, performance, or environmental issues, which can increase costs and lower profits.
Privacy Laws: Data collected through Paccar’s telematics systems is subject to various international privacy laws and government regulations regarding cellular frequency allocations.

4. Financial Impact Map

Commercial Truck Market Demand → Revenue → Fluctuations in demand can materially weaken sales of equipment and services. Production Costs and Inflation → Cost of Goods Sold / Production Capacity → Commodity price increases and component shortages can adversely impact financial results and the use of production capacity. Climate Change Transition → Research and Development Expense → Significant investment is required for alternative powertrain development, with uncertain returns based on technology and infrastructure costs. Financial Services Competition → Financial Services Segment Margin → Competitive pressure from banks and finance firms may force lower interest rates, reducing segment margins. Emissions Compliance → Operating Expenses / Net Income → Potential for significant fines from the EU Commission and increased research and development costs to meet regulatory standards.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Jan 2026	—
10-Q	Oct 2025	Sep 2025
14A	Mar 2025	—