One-glance verdict
Overvalued
$275.10 our estimate vs market $688.55
Wall Street consensus: $945.76 (243.8% higher than our fair-value estimate)
150% above our estimate, beyond the bull case
Fundamentals snapshot
Caterpillar Inc.
CAT · NYQ · Industrials · Farm & Heavy Construction Machinery
Current price
$688.55
52-week range
$521.43 - $1,073.46
Market cap
$316.51B
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 47.2% above its 5-year average P/E.
- Risk Net debt grew 11.2% over 3 years.
What this company does
Caterpillar Inc.
Caterpillar makes big machines for construction and mining, like bulldozers and excavators, and also engines and parts. Most of their money comes from selling these big-ticket items to businesses around the world, which helps them make money when those industries are busy.
How the company got here
Caterpillar Tractor Co. was formed in 1925 through the merger of two companies that made farm tractors. It quickly became known for its sturdy yellow machines used in construction and agriculture. Over the decades, Caterpillar expanded its product line to include a wider range of heavy equipment and engines, becoming a global leader in industries like mining and energy. The company, now headquartered in Irving, Texas, has grown into a massive industrial conglomerate with a long history of providing essential machinery worldwide.
What it actually does
Caterpillar makes and sells the big, powerful machines you see on construction sites, mines, and sometimes even large farms. Think of the giant yellow bulldozers, excavators, and trucks that move earth and build roads. They also produce the engines that power these machines, as well as engines for ships, trains, and power generation. Essentially, Caterpillar provides the heavy-duty equipment and power solutions that are fundamental to building infrastructure, extracting resources, and powering transportation.
Construction Industries
This is Caterpillar's largest business, focusing on equipment used for building roads, buildings, and other infrastructure. It includes a vast array of machines like excavators, bulldozers, wheel loaders, and asphalt pavers. These are the machines that dig, lift, move, and compact materials on job sites. Customers in this segment are typically construction companies, road builders, and infrastructure developers who need reliable equipment to complete their projects. This segment represents a significant portion of Caterpillar's overall revenue.
Resource Industries
This segment provides heavy machinery specifically designed for mining and quarrying operations. It includes large mining trucks, shovels, and drills used to extract minerals and other resources from the earth. Caterpillar also offers technology and services to help mining companies manage their fleets more efficiently and safely, including autonomous (self-driving) machine capabilities. This business is crucial for companies involved in extracting raw materials like coal, metals, and aggregates.
Energy & Transportation
This part of Caterpillar focuses on engines and power systems for various applications beyond construction and mining. It includes large diesel and natural gas engines used for power generation (like backup generators for buildings), as well as engines and components for locomotives (trains) and marine vessels. They also offer services related to these power systems. This segment serves customers in industries like power generation, oil and gas, and rail transportation.
Financial Products
To help customers afford their expensive machinery, Caterpillar offers financing solutions through its Financial Products segment. This includes offering loans, leases, and insurance for the equipment they sell. Essentially, this business acts like a bank for Caterpillar's customers, making it easier for them to purchase or rent the necessary machinery by providing various financial services and payment plans. This segment supports the sales of equipment across the other business lines.
What management is betting on now
Caterpillar's leadership is focused on leveraging technology to improve efficiency and sustainability for its customers. This includes investing in digital solutions for fleet management and autonomous (self-driving) machinery, particularly in mining. They are also prioritizing services, which involve offering maintenance, repairs, and parts to existing equipment owners, as this can provide a steady stream of revenue. Additionally, management is looking to expand offerings in energy and transportation, adapting to changing energy needs and transportation infrastructure demands.
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 $275.10 vs current price $688.55
Wall Street consensus is the average analyst price target: $945.76 (243.8% higher than our fair-value estimate).
Our most-likely fair value is $275.10 a share — about 60.0% below today's price of $688.55, 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 $64.58B 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 $11.00B 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 47.2% 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)
29.64x
Forward P/E
21.13x
P/B
16.32x
P/S
4.24x
EV/EBITDA
21.84x
PEG ratio
1.20x
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
23.23
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
0.9%
Payout ratio
26.0%
Last ex-div date
2026-10-26