Caterpillar (CAT)
Industrials · $265B market cap · SEC CIK 0000018230
ahead of 75% of the S&P 500 · #18 of 79 in Industrials
Next reports on Feb 2, 2027, before the open, with analysts expecting $6.54 in earnings per share.
52-week range $537.08 to $1,073. 46% below its 52-week high and 9% above its low.
The case for CAT
- Revenue up 20.3% on the year.
- Cheap for its growth: 22.4× earnings, where 19% a year of growth plus a 2.1% dividend would justify about 40×.
- Earns 59% back on shareholder equity.
- Earnings per share up 30.8%.
- Has compounded revenue at 10.1% a year over five years.
- Pays a modest 2.1% dividend.
The case against
- Near the bottom of its 52-week range, 46% below the high. Falling prices usually have a reason; find it first.
- Swings harder than the market (beta 1.64).
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 82 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 81 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 72 |
| Momentumhow the price has behaved lately | 25 |
| Stabilityhow violently it moves, what it owes and what it pays you | 36 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +20.3% |
|---|---|
| Over 5 years | +10.1% a year |
| FY2025 revenue | $67.6B (+4%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $8.9B |
|---|---|
| Of revenue | 13% |
| Of profit | 100% |
Profit margins
Is profitability improving? No, slipping
| Gross margin | 35% |
|---|---|
| Operating margin | 18% |
| Net margin, FY24 → FY25 → now | 16.6% → 13.1% → 15.2% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $10.0B |
|---|---|
| Long-term debt | $30.7B |
| Net debt | $20.7B |
| Years to repay | 2.6 yrs |
Valuation
Is the stock price reasonable? Yes, it looks cheap
| P/E | 22.4× |
|---|---|
| Fair P/E for its growth | 40× |
| P/FCF | 29.7× |
| Forward P/E | 19.7× |
| EV / EBITDA | 18.1× |
At 22.4× earnings it trades well below the 40× that 19% a year of growth plus a 2.1% dividend would justify. At 29.7× free cash flow it trades below that same mark.
The financials, five years deep
Pulled from Caterpillar's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $67.6B | $64.8B | $67.1B | $59.4B | $51.0B |
| Change on the year | +4% | −3% | +13% | +17% | — |
| Free cash flow | |||||
| Free cash flow | $8.9B | $10.0B | $11.3B | $6.5B | $6.1B |
| Of revenue | 13% | 16% | 17% | 11% | 12% |
| Profit margins | |||||
| Operating margin | 16.5% | 20.2% | 19.3% | 13.3% | 13.5% |
| Net margin | 13.1% | 16.6% | 15.4% | 11.3% | 12.7% |
| Debt vs. cash | |||||
| Cash | $10.0B | $6.9B | $7.0B | $7.0B | $9.3B |
| Long-term debt | $30.7B | $27.4B | $24.5B | $25.7B | $26.0B |
| Net cash (debt) | −$20.7B | −$20.5B | −$17.5B | −$18.7B | −$16.8B |
What Caterpillar says it does
Originally organized as Caterpillar Tractor Co. in 1925 in the State of California, our company was reorganized as Caterpillar Inc. in 1986 in the State of Delaware. As used herein, the term “Caterpillar,” “we,” “us,” “our” or “the company” refers to Caterpillar Inc. and its subsidiaries unless designated or identified otherwise. Overview With 2025 sales and revenues of $67.589 billion, Caterpillar Inc. is shaping the future as the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Backed by one of the largest independent global dealer networks and financing services through Cat Financial, the company’s primary business segments: Power & Energy, Construction Industries and Resource Industries are solving customers’ toughest challenges through commercial excellence and advanced technology, driven by a highly skilled,…