Value
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 8.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.7 |
| PEG | 5.9 |
| Analyst target | 3.0 |
- ▸Forward P/E: 19.1x
- ▸PEG: 1.27
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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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. | ↓Deteriorating |
| 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.
→StableV9
- 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.
↓DeterioratingValuation 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
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 2.8 |
| Gross margin | 0.0 |
| Op margin | 4.1 |
| Net margin | 4.5 |
| Current ratio | 7.4 |
| FCF quality | 4.7 |
| Moat | 4.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 60% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.3 |
| EPS growth | 5.9 |
- ▸Declining revenue: -9%
Momentum
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.1 |
- ▸Overbought (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 4.6 |
| erm sentiment | 5.0 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 6.8 |
| growth rank | 1.8 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.2 |
| 52w position | 9.7 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 6.3 |
| volatility | 6.2 |
| put call | 9.7 |
| implied vol | 7.3 |
| max pain risk | 7.0 |
| beta | 7.1 |
| debt equity | 6.4 |
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.4 |
| dividend safety | 6.8 |
- ▸Earnings in 5 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.2=NEGATIVE
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.17
Upside
-12.1%
Downside
10.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.2=NEGATIVE, EARNINGS_PROXIMITY:5d<=7d) reinforce the read. Current asymmetry R:R is -1.17 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.3, Insider at 7.3, and Risk (lower is worse) at 7.3; the weakest are Growth at 3.1, Technical at 3.6, and Peer rank at 4.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.17 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.