While the S&P 500 is up 33.2% since April 2025, PACCAR (currently trading at $98.20 per share) has lagged behind, posting a return of 11.4%. This might have investors contemplating their next move.
Is now the time to buy PACCAR, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free for active Edge members.
Why Is PACCAR Not Exciting?
We're cautious about PACCAR. Here are three reasons why PCAR doesn't excite us and a stock we'd rather own.
1. Core Business Falling Behind as Demand Declines
Investors interested in Heavy Transportation Equipment companies should track organic revenue in addition to reported revenue. This metric gives visibility into PACCAR’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, PACCAR’s organic revenue averaged 2.6% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests PACCAR might have to lean into acquisitions to grow, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus). 
2. Revenue Projections Show Stormy Skies Ahead
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect PACCAR’s revenue to drop by 4.8%, a decrease from its 8.1% annualized growth for the past five years. This projection is underwhelming and suggests its products and services will face some demand challenges.
3. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for PACCAR, its EPS declined by more than its revenue over the last two years, dropping 9.9%. This tells us the company struggled to adjust to shrinking demand.
Final Judgment
PACCAR isn’t a terrible business, but it isn’t one of our picks. With its shares trailing the market in recent months, the stock trades at 18.3× forward P/E (or $98.20 per share). Beauty is in the eye of the beholder, but we don’t really see a big opportunity at the moment. We're fairly confident there are better investments elsewhere. Let us point you toward one of our top digital advertising picks.
Stocks We Would Buy Instead of PACCAR
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.