PACCAR Inc (PCAR) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: PACCAR Inc

Updated on October 28, 2026 · accounts published on October 27, 2026

Reading of October 27, 2026: A highly profitable industrial whose sales and earnings are shrinking

PACCAR trades at a P/E of 21.8 over the last 12 months, 59 % above its ten-year median of 13.7, while EPS fell 42.9 % over the same period.

• Is PACCAR expensive or cheap? Its P/E of 21.8 is 59 % above its ten-year median and higher than in 83 % of the last decade, though 16 % below its sector.
• How is the business doing? Revenue fell 15.5 % and EPS 42.9 % over the last 12 months, yet ROIC of 22.5 % is 13.6 points above the sector median.
• How strong is the balance sheet? Net debt was $12.30 per share in fiscal 2025, 2.2× EBITDA and 11.9 % of the share price; the dividend yields 2.7 %.
• What to expect from the next earnings? Analysts expect EPS of $1.70 when PACCAR reports on January 26, 2027, after it matched the $1.61 forecast on October 27, 2026.
• Does PACCAR turn its margin into cash, and at what multiple of the cycle does it trade? Free cash flow was 128 % of net income in fiscal 2025, but the P/E of 21.8 sits well above its ten-year fiscal average of 15.5.

Is PACCAR expensive or cheap?

PACCAR trades at a P/E of 21.8 over the last 12 months, 59 % above its ten-year median of 13.7 and above its ten-year fiscal average of 15.5. Over the decade its weekly P/E has ranged from 7.6 to 28.0, so today it sits in the upper part of that range. Against its sector the picture is milder: the sector median P/E is 25.8, which leaves PACCAR 16 % below it. Its EV/EBITDA of 14.9 is also above its seven-year average of 11.1. The best argument for the other side is a free cash flow yield of 8.9 % over the last 12 months.

How is the business doing?

Sales and profits are falling: revenue dropped 15.5 % and EPS 42.9 % over the last 12 months, while the share price rose 5 %. Lower earnings, not a higher share price, are what pushed the P/E up. Profitability is holding up better. The operating margin of 10.3 % over the last 12 months is close to the 11.0 % average for fiscal 2014-2025, and a ROIC of 22.5 % compares with a sector median of 9.0 %. That level is unusual for PACCAR, which cleared a 10 % ROIC in only 3 of the last 10 fiscal years. Revenue per share still grew 8.5 % a year over fiscal 2020-2025.

How strong is the balance sheet?

The balance sheet raises no alarms. Net debt was $12.30 per share in fiscal 2025 ($30.39 of debt less $18.09 of cash). That is 2.2× EBITDA, below the 3.0× ceiling for a healthy industrial. Over the last 12 months the current ratio was 1.88 and the Altman Z score was 3.5, inside the safe zone above 2.99. The weak spot is dividend coverage. The 2.7 % yield over the last 12 months came with a payout of 95 % of fiscal 2025 earnings, which leaves little room if profits keep falling.

What to expect from the next earnings?

PACCAR's latest quarter, published on October 27, 2026, delivered EPS of $1.61, exactly what analysts expected. PACCAR has beaten EPS estimates in only 2 of the last 8 quarters, so an in-line result is closer to its usual pattern than a disappointment. The next report is due on January 26, 2027, and the consensus is $1.70 per share. Forecasts for the year are steady: over the last 30 days the 2026 EPS consensus barely moved, from $5.95 to $5.94 across 12 analysts, and the revenue consensus was also flat. Of the 45 analysts covering PACCAR, 14 say buy, 27 hold and 3 sell.

Does PACCAR turn its margin into cash, and at what multiple of the cycle does it trade?

Industrials are semi-cyclical, so a single year's earnings can mislead. That is why the sector focuses on the order backlog, the operating margin and how much profit turns into cash. PACCAR converts well: free cash flow was 128 % of net income in fiscal 2025, above the 85 % healthy threshold, and capex took 4.9 % of revenue, within the 4-8 % range. The margin is where it falls short: 10.4 % in fiscal 2025, below the 12 % bar. Measured against the cycle, the P/E (21.8 against a 15.5 average) and the EV/EBITDA (14.9 against 11.1) both sit more than 10 % above their own averages. A Piotroski score of 4 of 9 is mid-range.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.