NASDAQ:PCAR appears to be flying under the radar despite its strong fundamentals.

Uncover the potential of PACCAR INC (NASDAQ:PCAR) as our stock screener's choice for an undervalued stock. NASDAQ:PCAR maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Deciphering NASDAQ:PCAR's Valuation Rating

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:PCAR scores a 7 out of 10:

• With a Price/Earnings ratio of 10.53, the valuation of PCAR can be described as very reasonable.
• Based on the Price/Earnings ratio, PCAR is valued cheaper than 84.62% of the companies in the same industry.
• PCAR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.28.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of PCAR indicates a somewhat cheap valuation: PCAR is cheaper than 70.77% of the companies listed in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 19.41. PCAR is valued slightly cheaper when compared to this.
• PCAR's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PCAR is cheaper than 77.69% of the companies in the same industry.
• PCAR's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PCAR is cheaper than 74.62% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of PCAR may justify a higher PE ratio.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:PCAR was assigned a score of 8 for profitability:

• PCAR has a Return On Assets of 10.79%. This is amongst the best in the industry. PCAR outperforms 83.08% of its industry peers.
• Looking at the Return On Equity, with a value of 25.62%, PCAR belongs to the top of the industry, outperforming 87.69% of the companies in the same industry.
• The Return On Invested Capital of PCAR (14.69%) is better than 85.38% of its industry peers.
• The last Return On Invested Capital (14.69%) for PCAR is above the 3 year average (8.30%), which is a sign of increasing profitability.
• The Profit Margin of PCAR (12.01%) is better than 81.54% of its industry peers.
• In the last couple of years the Profit Margin of PCAR has grown nicely.
• The Operating Margin of PCAR (17.47%) is better than 86.15% of its industry peers.
• PCAR's Operating Margin has improved in the last couple of years.

Evaluating Health: NASDAQ:PCAR

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:PCAR scores a 5 out of 10:

• An Altman-Z score of 3.46 indicates that PCAR is not in any danger for bankruptcy at the moment.
• PCAR has a better Altman-Z score (3.46) than 65.38% of its industry peers.
• Looking at the Debt to FCF ratio, with a value of 4.25, PCAR is in the better half of the industry, outperforming 63.08% of the companies in the same industry.

Growth Assessment of NASDAQ:PCAR

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:PCAR has achieved a 5 out of 10:

• PCAR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 74.30%, which is quite impressive.
• PCAR shows a strong growth in Revenue. In the last year, the Revenue has grown by 24.85%.
• PCAR shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.18% yearly.

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

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.