Caterpillar, Inc.(CAT) - Stock detail

Caterpillar, Inc.

US
CAT
Caterpillar Inc.(Listing date: 12/02/1929)

Caterpillar Inc. was originally established as Caterpillar Tractor Co. in California in 1925 and renamed Caterpillar Inc. in Delaware in 1986. The company had sales and revenues of $53.8 billion in 2019 and is a global leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. It primarily conducts business through three main segments: Construction Industries, Resource Industries, and Energy & Transportation, and provides financing and related services through its Financial Products segment. The company is also a leading exporter in the United States, establishing long-term cooperative relationships with customers worldwide through its global network of independent dealers and direct sales of certain products.

AI Value AnalystSell
Overall Rating2.7/10
Generated at:2026-03-04 16:36:59
Analysis based on 5 financial reports covering periods: 2025-12-31, 2025-09-30, 2025-06-30, 2025-03-31, and 2024-12-31. Data includes fundamental financial metrics, valuation ratios, profitability indicators, and financial condition assessment. Stock price data as of 2026-03-05. Data completeness: Comprehensive analysis using multiple quarterly and annual reports for thorough assessment.
Overview

Caterpillar Inc. is a leading global manufacturer in the Farm & Heavy Construction Machinery industry with mixed fundamental conditions. The company shows adequate liquidity but high leverage, declining profitability metrics, and significant overvaluation relative to earnings fundamentals. As a cyclical industrial stock, it faces pressure from potential economic slowdowns and margin compression.

Valuation
1/10
Profitability
3/10
Financial health
4/10
Operation Advice
  • Sell recommendation with price target range of $280-$450 based on normalized earnings and sector-appropriate multiples.
  • Current price of $731.97 represents significant overvaluation.
  • Monitor quarterly earnings for margin improvement signs and global construction/mining activity trends.
  • Consider implementing risk management strategies given high volatility and cyclical headwinds.

Valuation

P/E TTM
40.02
P/E LYR
28.85
P/B MRQ
16.68
P/S TTM
--
AI Analysis
  • Caterpillar's valuation metrics indicate significant overvaluation with forward PE of 28.85, TTM PE of 40.02, price/book of 16.68, and price/sales of 5.05, all above historical averages and sector norms. Based on earnings fundamentals, fair value ranges from $280-$550, suggesting current price of $731.97 is substantially overvalued.
  • Forward PE: 28.85
  • TTM PE: 40.02 (significantly above historical averages)
  • Price/Book: 16.68 (elevated relative to industrial sector norms)
  • Price/Sales: 5.05 (above sector median)
  • Stock has traded between $572.05-$789.81 over the past 60 days, with current price near the lower end of this range
  • Using FY2025 EPS of $18.81 and sector-average PE of 20-25: Fair value range $376-$470
  • Using 5-year average PE of ~15: Fair value $282
  • Current price of $731.97 implies significant overvaluation based on earnings fundamentals
  • Conservative price target (based on normalized earnings): $280-$350
  • Moderate price target (sector-average growth): $350-$450
  • Optimistic price target (premium for market position): $450-$550
Valuation trend

Profitability

ROE TTM
43.54%
Net margin
13.14%
Gross margin
33.79%
Total revenue
67.59B
AI Analysis
  • Caterpillar shows exceptional ROE of 43.54% but declining profitability trends with gross margin dropping to 33.79% from 37.97% and net margin compressing to 13.14% from 16.65%. Quarterly results show consistent pressure with net income declining significantly across all quarters in 2025.
  • Exceptional ROE of 43.54% (TTM) indicates efficient use of shareholder equity, though partially amplified by high financial leverage
  • Gross margin declined to 33.79% in FY2025 from 37.97% in FY2024, reflecting input cost pressures
  • Net margin compressed to 13.14% from 16.65% over the same period
  • Quarterly results show consistent pressure with Q1 2025: Net income -29.87% YoY
  • Q2 2025: Net income -24.47% YoY
  • Q3 2025: Net income -18.99% YoY
  • Full Year 2025: Net income -17.68% YoY
  • While annual revenue grew to $67.59B, quarterly growth rates have been negative or minimal, suggesting cyclical headwinds
Profitability
2024Q42025Q12025Q22025Q32025Q4
ROE TTM--10.67%21.92%32.29%43.54%
Earnings
2024Q42025Q12025Q22025Q32025Q4
Total revenue64.81B14.25B30.82B48.46B67.59B

Financial health

Debt/Asset
78.38%
Current ratio
1.44
Quick ratio
0.94
Cash ratio
0.94
AI Analysis
  • Caterpillar's financial health shows mixed signals with adequate liquidity (current ratio 1.44), high leverage (78.38% debt-to-asset ratio), declining profitability metrics, and strong asset utilization (ROA: 9.53%) but requires careful monitoring during economic downturns.
  • Current ratio of 1.44 indicates adequate short-term liquidity
  • Quick ratio of 0.94 suggests some reliance on inventory management
  • High debt levels with 78.38% debt-to-asset ratio, elevated for the industry but typical for capital-intensive heavy machinery companies
  • Despite revenue growth of 4.29% in FY2025, both gross profit (-7.20% YoY) and net income (-17.68% YoY) declined, indicating margin pressure
  • Company maintains strong asset utilization (ROA: 9.53%) but high leverage requires careful monitoring during economic downturns
Leverage
2024Q42025Q12025Q22025Q32025Q4
Debt/Asset77.79%78.73%79.34%77.96%78.38%
Liquidity
2024Q42025Q12025Q22025Q32025Q4
Current ratio1.421.321.341.381.44