PACCAR (PCAR): Evaluating Valuation Following Recent Drops in Sales and Net Income

PACCAR (PCAR) released its latest earnings report, highlighting a year-over-year drop in both sales and net income for the third quarter as well as for the first nine months of 2025. Investors are keeping a close eye on how these results might influence the company’s long-term performance.

See our latest analysis for PACCAR.

The recent earnings decline appears to have weighed on PACCAR’s momentum, with a year-to-date share price return of -4.85%. However, long-term holders have seen a nearly 96.5% total shareholder return over five years, reflecting solid growth through market cycles.

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Given the stock’s recent pullback but strong long-term returns, investors may be wondering whether PACCAR is now trading at an attractive valuation, or if the market has already factored in all the company’s future gains.

Most Popular Narrative: 8% Undervalued

PACCAR's most widely followed narrative values the stock at $107, which is 8% above the last close of $98.40. This suggests that, despite recent weakness, there is still room for upside according to consensus projections.

Demand for new trucks is likely to rise meaningfully as customers pre-buy ahead of the 2027 NOx and greenhouse gas emissions standards. These new standards will increase truck costs and incentivize earlier fleet upgrades, acting as a catalyst for revenue and earnings acceleration. Increasing infrastructure spending in North America and globally is supporting healthy vocational and freight markets, driving consistent truck and parts orders. This bolsters unit volumes and supports revenue growth.

Read the complete narrative.

Want to know what’s fueling analyst optimism? Discover the critical assumptions about revenue, margins, and long-term industry change that power this valuation. Curious which market shifts and profitability targets set the stage for the next move? Uncover the full thesis behind this number.

Result: Fair Value of $107 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, uncertainty over future truck demand and potential setbacks in margin recovery could still challenge PACCAR’s long-term bullish narrative.

Find out about the key risks to this PACCAR narrative.

Build Your Own PACCAR Narrative

If you think there’s more to the story, or want to dig into the numbers yourself, creating your own PACCAR narrative takes just a few minutes. Do it your way

A great starting point for your PACCAR research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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