Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 9.1 |
| EV/EBITDA | 1.8 |
| Fwd P/E | 8.0 |
| PEG | 8.7 |
| Analyst target | 6.0 |
- ▸Forward P/E: 14.9x
- ▸PEG: 0.72
PCAR · Why this verdict
Why PACCAR (PCAR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
PACCAR has formed a golden cross breakout with the stock above all moving averages and a bullish MACD, but has surpassed analyst targets with negative upside of 5.9%, revenue is declining 9% year over year, and two consecutive earnings misses signal fundamental weakness in heavy truck demand.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Two consecutive earnings misses of roughly 1% to 3% below estimates in a period of 9% revenue decline reflect the cyclical nature of truck demand; modest misses at the trough of the cycle may precede stabilization as order books normalize. Earnings | Earnings beat consensus by more than 2% in at least 2 of the next 4 quarters as revenue decline stabilizes above negative 5% year over year. | →Stable |
| CounterRevenue declining 9% year over year in heavy machinery typically signals a prolonged demand downcycle; consecutive misses suggest the revenue trough has not yet been reached and estimates may continue to drift lower. | ||
PACCAR has formed a golden cross with rising on-balance volume and momentum score of 7.4, placing it in a confirmed technical breakout that is broadly positive for near-term price action in heavy construction and farm machinery. V9 | Price holds above the 200-day moving average for at least 6 consecutive months while on-balance volume continues to rise. | ↑Improving |
| CounterThe stock is already 5.9% above its analyst price target, meaning the breakout has occurred into overvalued territory; technical breakouts above consensus value targets historically underperform. | ||
At a forward P/E of 17.8x with the stock already 5.9% above analyst targets, the market is pricing in a faster recovery than consensus expects; if this optimism is validated, the stock could re-rate to higher analyst targets. Valuation breakdown | Analyst consensus price target rises above $128 within 6 months, restoring positive upside and validating the premium the market is currently paying. | ↑Improving |
| CounterA PEG ratio of 1.23 combined with 9% revenue decline and two consecutive misses provides little justification for the current premium; analysts are more likely to reduce targets than raise them. | ||
PACCAR pays a dividend with 116% earnings coverage, providing an income floor that supports the total return case even if price appreciation is limited by the above-target valuation. Catalyst breakdown | Dividend per share is maintained or increased over the next 4 quarters without a reduction. | →Stable |
| CounterA 9% revenue decline and two consecutive earnings misses could pressure the dividend if the earnings base shrinks further; 116% coverage leaves little room if earnings fall materially below estimates. | ||
Two consecutive earnings misses of roughly 1% to 3% below estimates in a period of 9% revenue decline reflect the cyclical nature of truck demand; modest misses at the trough of the cycle may precede stabilization as order books normalize.
→StableEarnings
- Expectation
- Earnings beat consensus by more than 2% in at least 2 of the next 4 quarters as revenue decline stabilizes above negative 5% year over year.
CounterRevenue declining 9% year over year in heavy machinery typically signals a prolonged demand downcycle; consecutive misses suggest the revenue trough has not yet been reached and estimates may continue to drift lower.
PACCAR has formed a golden cross with rising on-balance volume and momentum score of 7.4, placing it in a confirmed technical breakout that is broadly positive for near-term price action in heavy construction and farm machinery.
↑ImprovingV9
- Expectation
- Price holds above the 200-day moving average for at least 6 consecutive months while on-balance volume continues to rise.
CounterThe stock is already 5.9% above its analyst price target, meaning the breakout has occurred into overvalued territory; technical breakouts above consensus value targets historically underperform.
At a forward P/E of 17.8x with the stock already 5.9% above analyst targets, the market is pricing in a faster recovery than consensus expects; if this optimism is validated, the stock could re-rate to higher analyst targets.
↑ImprovingValuation breakdown
- Expectation
- Analyst consensus price target rises above $128 within 6 months, restoring positive upside and validating the premium the market is currently paying.
CounterA PEG ratio of 1.23 combined with 9% revenue decline and two consecutive misses provides little justification for the current premium; analysts are more likely to reduce targets than raise them.
PACCAR pays a dividend with 116% earnings coverage, providing an income floor that supports the total return case even if price appreciation is limited by the above-target valuation.
→StableCatalyst breakdown
- Expectation
- Dividend per share is maintained or increased over the next 4 quarters without a reduction.
CounterA 9% revenue decline and two consecutive earnings misses could pressure the dividend if the earnings base shrinks further; 116% coverage leaves little room if earnings fall materially below estimates.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 3.0 |
| Gross margin | 0.0 |
| Op margin | 4.9 |
| Net margin | 4.7 |
| Current ratio | 6.6 |
| FCF quality | 10.0 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 864% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
8.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.3 |
| EPS growth | 10.0 |
Momentum
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.5 |
| Volume | 4.1 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 8.2 |
| erm sentiment | 5.4 |
- ▸Analyst upside: 26%
Insider
5.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.8 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 7.2 |
| growth rank | 6.1 |
Technical
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 8.2 |
| 52w position | 4.7 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 7.5 |
| volatility | 5.7 |
| put call | 10.0 |
| implied vol | 6.9 |
| max pain risk | 7.0 |
| beta | 7.1 |
| debt equity | 6.3 |
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.1 |
| dividend safety | 8.5 |
- ▸Dividend aristocrat: 1.4% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- ASYMMETRY:2.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:94d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.0<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
2.39
Upside
+13.0%
Downside
5.4%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 31, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.0<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 2.39 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.7, Technical at 7.6, and Risk (lower is worse) at 7.4; the weakest are Momentum at 2.0, Catalyst at 5.4, and Quality at 5.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 2.39 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Golden Cross Breakout Momentum
Trip ifPrice drops below the 200-day moving average and holds below that level for more than 10 consecutive trading days.
- P2Earnings Miss Revenue Decline
Trip ifRevenue decline exceeds 12% year over year for 2 consecutive quarters, indicating the demand downcycle is deepening.
- P3Above Target Valuation Risk
Trip ifAnalyst consensus price target falls below $110, indicating a downgrade cycle that worsens the overvaluation gap.
- P4Dividend Coverage Income Floor
Trip ifDividend per share is reduced by more than 15% in any single declaration.