One-glance verdict
Overvalued
$187.95 our estimate vs market $801.19
Wall Street consensus: $975.61 (419.1% higher than our fair-value estimate)
326% above our estimate, beyond the bull case
Fundamentals snapshot
Caterpillar Inc.
CAT · NYQ · Industrials · Farm & Heavy Construction Machinery
Current price
$801.19
52-week range
$423.32 - $1,073.46
Market cap
$368.29B
Balance sheet
Stretched
22.21x Strong cushion
Net debt $39.20B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 10.6% last year.
- Reward Returns 57.0% on equity, ahead of 83% of its peers.
- Risk Stock trades 71.2% above its 5-year average P/E.
- Risk Net debt grew 11.2% over 3 years.
What this company does
Caterpillar Inc.
Caterpillar is the company behind the iconic yellow construction and mining machines used to build roads, mine for materials, and support energy projects. They primarily earn money by selling this heavy equipment, but also profit from financing (offering loans so customers can afford the expensive machines) and selling replacement parts and services. Because their products are essential for major global projects, Caterpillar's sales are often seen as a signal for the overall health of the world economy.
How the company got here
Caterpillar was formed in 1925 through the merger of two tractor companies, Holt Manufacturing and C. L. Best Tractor Co. For nearly a century, it has grown to become the world's largest manufacturer of construction and mining equipment. A key to its success has been its global network of independent dealers, which sell and service its products in over 190 countries. This powerful distribution and support system helps lock in customers for the long term, making the company a dominant force in its industry.
What it actually does
You've likely seen Caterpillar's iconic yellow machines at construction sites. The company makes heavy equipment used to build everything from roads and buildings to massive mining and infrastructure projects. Beyond the familiar bulldozers and excavators, Caterpillar also produces large engines for ships and trains, power generators, and industrial gas turbines. Essentially, Caterpillar provides the heavy-duty tools and power systems that help build and power the modern world.
Construction Industries
This is Caterpillar's largest and most recognizable business, making up about 41% of its revenue. This segment builds and sells the machines you see at construction sites, like excavators, bulldozers, and asphalt pavers. Customers are typically construction contractors and rental companies who use this equipment for building houses, skyscrapers, roads, and other infrastructure projects.
Resource Industries
This division focuses on even bigger equipment for the mining and quarrying industries, contributing about 20% of the company's revenue. Think giant mining trucks, electric rope shovels, and large bulldozers used to extract raw materials like coal, copper, and iron ore from the earth. Customers are large mining companies that rely on this machinery to operate their mines efficiently and safely.
Energy & Transportation
This is another major part of the company, responsible for about 42% of total revenue. This segment doesn't just make construction vehicles; it produces powerful reciprocating engines, turbines, and diesel-electric locomotives. Its customers include the oil and gas industry, shipbuilders, railroad companies, and businesses that need reliable power generation.
Financial Products
This smaller segment, representing about 6% of revenue, acts like a bank for Caterpillar customers. It provides financing and leasing options to help businesses afford Caterpillar's expensive equipment. It also offers insurance and other financial services, making it easier for customers to purchase, manage, and protect their machinery.
What management is betting on now
Caterpillar's strategy focuses heavily on growing its services business, which includes selling parts, providing maintenance, and offering digital monitoring for its equipment. The goal is to increase recurring revenue (income that is predictable and likely to continue in the future) so the company is less dependent on the cyclical nature of new equipment sales. The company is also investing in technology, such as autonomous (self-driving) hauling systems for mines and developing equipment that can run on alternative fuels to meet sustainability goals.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$3.12B
FY2024 Q4
$2.69B
FY2025 Q1
$579.00M
FY2025 Q2
$2.57B
FY2025 Q3
$3.08B
FY2025 Q4
$2.69B
FY2026 Q1
$1.14B
FY2026 Q2
$3.78B
Revenue
$20.54B
Net income
—
Diluted EPS
7.77
Operating cash flow
$4.37B
Free cash flow
$3.78B
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Sources
Revenue
$17.41B
Net income
—
Diluted EPS
5.47
Operating cash flow
$1.87B
Free cash flow
$1.14B
Fetching…
Sources
Revenue
$19.13B
Net income
—
Diluted EPS
5.11
Operating cash flow
$3.59B
Free cash flow
$2.69B
Fetching…
Sources
Revenue
$17.64B
Net income
—
Diluted EPS
4.88
Operating cash flow
$3.74B
Free cash flow
$3.08B
Fetching…
Sources
Revenue
$16.57B
Net income
—
Diluted EPS
4.62
Operating cash flow
$3.12B
Free cash flow
$2.57B
Fetching…
Sources
Revenue
$14.25B
Net income
—
Diluted EPS
4.20
Operating cash flow
$1.29B
Free cash flow
$579.00M
Fetching…
Sources
Revenue
$16.21B
Net income
—
Diluted EPS
5.76
Operating cash flow
$3.39B
Free cash flow
$2.69B
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Sources
Revenue
$16.11B
Net income
—
Diluted EPS
5.06
Operating cash flow
$3.57B
Free cash flow
$3.12B
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Sources
Is it cheap or expensive?
Fair value $187.95 vs current price $801.19
Wall Street consensus is the average analyst price target: $975.61 (419.1% higher than our fair-value estimate).
Our most-likely fair value is $187.95 a share — about 76.5% below today's price of $801.19, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $39.2B. Interest coverage 22.2x.
Net debt
$39.20B
Interest coverage
22.21x
Caterpillar Inc.'s profit covers its interest bill about 22.2 times over. which is stronger than every peer shown here.
Stretched
Worse cushion
Baseline
Better cushion
CAT
BASELINE
Caterpillar Inc.
Total debt $45.15B Interest coverage 22.21x This is the baseline the peer rows are being compared against.
Total debt $48.47B Interest coverage 2.65x -88% vs CAT Carries about 8.4x less debt cushion than CAT.
Total debt $14.82B Interest coverage 10.42x -53% vs CAT Carries about 2.1x less debt cushion than CAT.
Total debt $11.23B Interest coverage 10.71x -52% vs CAT Carries about 2.1x less debt cushion than CAT.
Total debt $26.31B Interest coverage 1.89x -91% vs CAT Carries about 11.7x less debt cushion than CAT.
Total debt $2.89B Interest coverage 5.68x -74% vs CAT Carries about 3.9x less debt cushion than CAT.
What you should know
The case for and against CAT
3 Rewards
3 Risks
Rewards
-
Revenue grew 10.6% last year.
-
Returns 57.0% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 71.2% above its 5-year average P/E.
-
Net debt grew 11.2% over 3 years.
-
Insider ownership is only 0.2% (peer median: 1.9%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
34.47x
Forward P/E
24.75x
P/B
18.99x
P/S
4.93x
EV/EBITDA
25.48x
PEG ratio
1.42x
Profitability
How much profit each dollar creates
Gross margin
29.7%
Operating margin
22.2%
Net margin
14.5%
ROE
57.0%
ROA
9.0%
Health
Liquidity and balance-sheet strength
Debt / equity
2.33x
Current ratio
1.37x
Quick ratio
0.78x
Total debt
$45.15B
Total cash
$5.94B
Growth
How the business has been compounding
Revenue TTM
$74.73B
Revenue 5Y CAGR
7.3%
EPS TTM
23.24
EPS 5Y CAGR
14.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$13.57B
Free CF TTM
$8.92B
FCF margin
11.9%
Dividend
Shareholder payout
Yield
0.8%
Payout ratio
26.0%
Last ex-div date
2026-07-20