Intrinsic value of Paccar - PCAR

Previous Close

$62.75

  Intrinsic Value

$319.16

stock screener

  Rating & Target

str. buy

+409%

Previous close

$62.75

 
Intrinsic value

$319.16

 
Up/down potential

+409%

 
Rating

str. buy

We calculate the intrinsic value of PCAR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 22.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.20
  13.28
  12.45
  11.71
  11.04
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.82
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
Revenue, $m
  22,219
  25,169
  28,303
  31,617
  35,106
  38,769
  42,603
  46,607
  50,784
  55,133
  59,658
  64,363
  69,254
  74,336
  79,617
  85,106
  90,813
  96,746
  102,920
  109,345
  116,035
  123,005
  130,270
  137,845
  145,749
  153,999
  162,614
  171,615
  181,022
  190,858
Variable operating expenses, $m
  12,531
  14,196
  15,963
  17,832
  19,800
  21,866
  24,028
  26,287
  28,642
  31,095
  33,647
  36,301
  39,059
  41,926
  44,904
  48,000
  51,218
  54,565
  58,047
  61,670
  65,444
  69,375
  73,472
  77,745
  82,202
  86,856
  91,715
  96,791
  102,097
  107,644
Fixed operating expenses, $m
  6,437
  6,578
  6,723
  6,871
  7,022
  7,176
  7,334
  7,496
  7,661
  7,829
  8,001
  8,177
  8,357
  8,541
  8,729
  8,921
  9,117
  9,318
  9,523
  9,732
  9,947
  10,165
  10,389
  10,618
  10,851
  11,090
  11,334
  11,583
  11,838
  12,098
Total operating expenses, $m
  18,968
  20,774
  22,686
  24,703
  26,822
  29,042
  31,362
  33,783
  36,303
  38,924
  41,648
  44,478
  47,416
  50,467
  53,633
  56,921
  60,335
  63,883
  67,570
  71,402
  75,391
  79,540
  83,861
  88,363
  93,053
  97,946
  103,049
  108,374
  113,935
  119,742
Operating income, $m
  3,251
  4,396
  5,617
  6,914
  8,284
  9,727
  11,240
  12,825
  14,481
  16,209
  18,010
  19,885
  21,837
  23,869
  25,984
  28,185
  30,477
  32,864
  35,350
  37,942
  40,645
  43,465
  46,409
  49,483
  52,695
  56,054
  59,566
  63,241
  67,088
  71,116
EBITDA, $m
  3,964
  5,204
  6,526
  7,929
  9,411
  10,971
  12,608
  14,321
  16,111
  17,979
  19,925
  21,951
  24,060
  26,256
  28,540
  30,917
  33,392
  35,969
  38,654
  41,452
  44,369
  47,413
  50,590
  53,908
  57,374
  60,997
  64,786
  68,750
  72,898
  77,242
Interest expense (income), $m
  108
  479
  598
  724
  858
  999
  1,148
  1,305
  1,469
  1,640
  1,818
  2,004
  2,197
  2,398
  2,607
  2,824
  3,050
  3,284
  3,528
  3,782
  4,045
  4,320
  4,606
  4,903
  5,214
  5,537
  5,875
  6,227
  6,596
  6,980
  7,382
Earnings before tax, $m
  2,771
  3,798
  4,894
  6,057
  7,285
  8,578
  9,936
  11,357
  12,841
  14,391
  16,006
  17,688
  19,439
  21,262
  23,160
  25,135
  27,193
  29,335
  31,569
  33,897
  36,325
  38,859
  41,505
  44,269
  47,158
  50,179
  53,339
  56,645
  60,108
  63,734
Tax expense, $m
  748
  1,025
  1,321
  1,635
  1,967
  2,316
  2,683
  3,066
  3,467
  3,886
  4,322
  4,776
  5,249
  5,741
  6,253
  6,787
  7,342
  7,921
  8,523
  9,152
  9,808
  10,492
  11,206
  11,953
  12,733
  13,548
  14,401
  15,294
  16,229
  17,208
Net income, $m
  2,023
  2,773
  3,572
  4,421
  5,318
  6,262
  7,253
  8,290
  9,374
  10,505
  11,684
  12,912
  14,191
  15,521
  16,907
  18,349
  19,851
  21,415
  23,045
  24,745
  26,517
  28,367
  30,299
  32,317
  34,425
  36,630
  38,937
  41,351
  43,879
  46,526

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  25,926
  29,369
  33,026
  36,893
  40,964
  45,238
  49,711
  54,384
  59,257
  64,332
  69,613
  75,103
  80,810
  86,740
  92,902
  99,307
  105,966
  112,890
  120,093
  127,590
  135,397
  143,530
  152,006
  160,846
  170,069
  179,696
  189,749
  200,251
  211,228
  222,705
Adjusted assets (=assets-cash), $m
  25,926
  29,369
  33,026
  36,893
  40,964
  45,238
  49,711
  54,384
  59,257
  64,332
  69,613
  75,103
  80,810
  86,740
  92,902
  99,307
  105,966
  112,890
  120,093
  127,590
  135,397
  143,530
  152,006
  160,846
  170,069
  179,696
  189,749
  200,251
  211,228
  222,705
Revenue / Adjusted assets
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
Average production assets, $m
  7,132
  8,079
  9,085
  10,149
  11,269
  12,445
  13,675
  14,961
  16,302
  17,698
  19,150
  20,661
  22,230
  23,862
  25,557
  27,319
  29,151
  31,056
  33,037
  35,100
  37,247
  39,485
  41,817
  44,248
  46,785
  49,434
  52,199
  55,088
  58,108
  61,265
Working capital, $m
  -2,400
  -2,718
  -3,057
  -3,415
  -3,791
  -4,187
  -4,601
  -5,034
  -5,485
  -5,954
  -6,443
  -6,951
  -7,479
  -8,028
  -8,599
  -9,191
  -9,808
  -10,449
  -11,115
  -11,809
  -12,532
  -13,285
  -14,069
  -14,887
  -15,741
  -16,632
  -17,562
  -18,534
  -19,550
  -20,613
Total debt, $m
  11,068
  13,403
  15,882
  18,503
  21,264
  24,161
  27,194
  30,363
  33,667
  37,108
  40,688
  44,410
  48,279
  52,300
  56,478
  60,821
  65,335
  70,029
  74,913
  79,996
  85,289
  90,803
  96,551
  102,544
  108,797
  115,324
  122,140
  129,260
  136,703
  144,484
Total liabilities, $m
  17,578
  19,912
  22,392
  25,013
  27,774
  30,671
  33,704
  36,873
  40,176
  43,617
  47,197
  50,920
  54,789
  58,810
  62,988
  67,330
  71,845
  76,539
  81,423
  86,506
  91,799
  97,313
  103,060
  109,054
  115,307
  121,834
  128,650
  135,770
  143,212
  150,994
Total equity, $m
  8,348
  9,457
  10,634
  11,879
  13,190
  14,567
  16,007
  17,512
  19,081
  20,715
  22,415
  24,183
  26,021
  27,930
  29,915
  31,977
  34,121
  36,350
  38,670
  41,084
  43,598
  46,217
  48,946
  51,792
  54,762
  57,862
  61,099
  64,481
  68,015
  71,711
Total liabilities and equity, $m
  25,926
  29,369
  33,026
  36,892
  40,964
  45,238
  49,711
  54,385
  59,257
  64,332
  69,612
  75,103
  80,810
  86,740
  92,903
  99,307
  105,966
  112,889
  120,093
  127,590
  135,397
  143,530
  152,006
  160,846
  170,069
  179,696
  189,749
  200,251
  211,227
  222,705
Debt-to-equity ratio
  1.330
  1.420
  1.490
  1.560
  1.610
  1.660
  1.700
  1.730
  1.760
  1.790
  1.820
  1.840
  1.860
  1.870
  1.890
  1.900
  1.910
  1.930
  1.940
  1.950
  1.960
  1.960
  1.970
  1.980
  1.990
  1.990
  2.000
  2.000
  2.010
  2.010
Adjusted equity ratio
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,023
  2,773
  3,572
  4,421
  5,318
  6,262
  7,253
  8,290
  9,374
  10,505
  11,684
  12,912
  14,191
  15,521
  16,907
  18,349
  19,851
  21,415
  23,045
  24,745
  26,517
  28,367
  30,299
  32,317
  34,425
  36,630
  38,937
  41,351
  43,879
  46,526
Depreciation, amort., depletion, $m
  713
  808
  909
  1,015
  1,127
  1,244
  1,368
  1,496
  1,630
  1,770
  1,915
  2,066
  2,223
  2,386
  2,556
  2,732
  2,915
  3,106
  3,304
  3,510
  3,725
  3,948
  4,182
  4,425
  4,679
  4,943
  5,220
  5,509
  5,811
  6,127
Funds from operations, $m
  2,736
  3,580
  4,481
  5,436
  6,445
  7,507
  8,621
  9,786
  11,004
  12,275
  13,599
  14,978
  16,414
  17,908
  19,462
  21,081
  22,766
  24,520
  26,349
  28,254
  30,242
  32,316
  34,480
  36,741
  39,104
  41,574
  44,157
  46,860
  49,689
  52,652
Change in working capital, $m
  -298
  -319
  -338
  -358
  -377
  -396
  -414
  -433
  -451
  -470
  -489
  -508
  -528
  -549
  -570
  -593
  -616
  -641
  -667
  -694
  -723
  -753
  -785
  -818
  -854
  -891
  -930
  -972
  -1,016
  -1,062
Cash from operations, $m
  3,035
  3,899
  4,819
  5,794
  6,822
  7,902
  9,035
  10,219
  11,455
  12,745
  14,088
  15,486
  16,942
  18,457
  20,033
  21,674
  23,382
  25,161
  27,015
  28,948
  30,964
  33,068
  35,265
  37,560
  39,958
  42,465
  45,088
  47,832
  50,705
  53,714
Maintenance CAPEX, $m
  -625
  -713
  -808
  -909
  -1,015
  -1,127
  -1,244
  -1,368
  -1,496
  -1,630
  -1,770
  -1,915
  -2,066
  -2,223
  -2,386
  -2,556
  -2,732
  -2,915
  -3,106
  -3,304
  -3,510
  -3,725
  -3,948
  -4,182
  -4,425
  -4,679
  -4,943
  -5,220
  -5,509
  -5,811
New CAPEX, $m
  -880
  -947
  -1,006
  -1,064
  -1,120
  -1,176
  -1,231
  -1,286
  -1,341
  -1,396
  -1,453
  -1,510
  -1,570
  -1,631
  -1,695
  -1,762
  -1,832
  -1,905
  -1,982
  -2,062
  -2,148
  -2,237
  -2,332
  -2,432
  -2,537
  -2,648
  -2,766
  -2,889
  -3,020
  -3,157
Cash from investing activities, $m
  -1,505
  -1,660
  -1,814
  -1,973
  -2,135
  -2,303
  -2,475
  -2,654
  -2,837
  -3,026
  -3,223
  -3,425
  -3,636
  -3,854
  -4,081
  -4,318
  -4,564
  -4,820
  -5,088
  -5,366
  -5,658
  -5,962
  -6,280
  -6,614
  -6,962
  -7,327
  -7,709
  -8,109
  -8,529
  -8,968
Free cash flow, $m
  1,529
  2,239
  3,005
  3,822
  4,687
  5,600
  6,560
  7,566
  8,619
  9,719
  10,866
  12,061
  13,306
  14,602
  15,951
  17,356
  18,818
  20,341
  21,928
  23,582
  25,307
  27,106
  28,985
  30,946
  32,996
  35,138
  37,379
  39,723
  42,177
  44,746
Issuance/(repayment) of debt, $m
  2,189
  2,334
  2,479
  2,621
  2,760
  2,897
  3,033
  3,168
  3,304
  3,441
  3,580
  3,722
  3,869
  4,021
  4,178
  4,343
  4,514
  4,695
  4,884
  5,083
  5,293
  5,514
  5,747
  5,993
  6,253
  6,527
  6,816
  7,121
  7,442
  7,781
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,189
  2,334
  2,479
  2,621
  2,760
  2,897
  3,033
  3,168
  3,304
  3,441
  3,580
  3,722
  3,869
  4,021
  4,178
  4,343
  4,514
  4,695
  4,884
  5,083
  5,293
  5,514
  5,747
  5,993
  6,253
  6,527
  6,816
  7,121
  7,442
  7,781
Total cash flow (excl. dividends), $m
  3,718
  4,573
  5,485
  6,443
  7,447
  8,497
  9,593
  10,734
  11,923
  13,159
  14,446
  15,783
  17,175
  18,623
  20,130
  21,698
  23,333
  25,036
  26,812
  28,665
  30,600
  32,620
  34,732
  36,939
  39,249
  41,665
  44,195
  46,844
  49,619
  52,527
Retained Cash Flow (-), $m
  -1,037
  -1,109
  -1,178
  -1,245
  -1,311
  -1,376
  -1,441
  -1,505
  -1,569
  -1,634
  -1,700
  -1,768
  -1,838
  -1,910
  -1,984
  -2,062
  -2,144
  -2,230
  -2,319
  -2,414
  -2,514
  -2,619
  -2,730
  -2,846
  -2,970
  -3,100
  -3,237
  -3,382
  -3,535
  -3,695
Prev. year cash balance distribution, $m
  740
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  3,421
  3,464
  4,307
  5,198
  6,136
  7,121
  8,152
  9,229
  10,354
  11,525
  12,745
  14,016
  15,338
  16,713
  18,145
  19,636
  21,189
  22,806
  24,493
  26,251
  28,086
  30,002
  32,002
  34,093
  36,279
  38,565
  40,958
  43,462
  46,085
  48,832
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  3,280
  3,172
  3,749
  4,280
  4,756
  5,168
  5,507
  5,769
  5,948
  6,042
  6,053
  5,981
  5,832
  5,611
  5,327
  4,990
  4,610
  4,200
  3,771
  3,336
  2,905
  2,489
  2,097
  1,736
  1,411
  1,125
  879
  672
  503
  368
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

PACCAR Inc (PACCAR) is a technology company. The Company's segments include Truck, Parts and Financial Services. The Truck segment includes the design, manufacture and distribution of light-, medium- and heavy-duty commercial trucks. The Company's trucks are marketed under the Kenworth, Peterbilt and DAF nameplates. It also manufactures engines, primarily for use in the Company's trucks, at its facilities in Columbus, Mississippi; Eindhoven, the Netherlands, and Ponta Grossa, Brazil. The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. The Financial Services segment includes finance and leasing products and services provided to customers and dealers. Its Other business includes the manufacturing and marketing of industrial winches. The Company operates in Australia and Brazil and sells trucks and parts to customers in Asia, Africa, Middle East and South America.

FINANCIAL RATIOS  of  Paccar (PCAR)

Valuation Ratios
P/E Ratio 42.2
Price to Sales 1.3
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 9.6
Price to Free Cash Flow 65.5
Growth Rates
Sales Growth Rate -10.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.9%
Cap. Spend. - 3 Yr. Gr. Rate 1%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 125%
Total Debt to Equity 125%
Interest Coverage 11
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 5.9%
Return On Total Capital 3.4%
Ret/ On T. Cap. - 3 Yr. Avg. 7.7%
Return On Equity 7.6%
Return On Equity - 3 Yr. Avg. 17.1%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 19.7%
Gross Margin - 3 Yr. Avg. 19%
EBITDA Margin 13.1%
EBITDA Margin - 3 Yr. Avg. 15.6%
Operating Margin 6.4%
Oper. Margin - 3 Yr. Avg. 9.7%
Pre-Tax Margin 6.6%
Pre-Tax Margin - 3 Yr. Avg. 9.8%
Net Profit Margin 3.1%
Net Profit Margin - 3 Yr. Avg. 6.2%
Effective Tax Rate 53.8%
Eff/ Tax Rate - 3 Yr. Avg. 39.3%
Payout Ratio 158.8%

PCAR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PCAR stock intrinsic value calculation we used $19456 million for the last fiscal year's total revenue generated by Paccar. The default revenue input number comes from 2017 income statement of Paccar. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PCAR stock valuation model: a) initial revenue growth rate of 14.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for PCAR is calculated based on our internal credit rating of Paccar, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Paccar.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PCAR stock the variable cost ratio is equal to 56.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6298 million in the base year in the intrinsic value calculation for PCAR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Paccar.

Corporate tax rate of 27% is the nominal tax rate for Paccar. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PCAR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PCAR are equal to 32.1%.

Life of production assets of 10 years is the average useful life of capital assets used in Paccar operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PCAR is equal to -10.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8051 million for Paccar - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 352 million for Paccar is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Paccar at the current share price and the inputted number of shares is $22.1 billion.

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PAG Penske Automot 48.90 31.87  sell

COMPANY NEWS

▶ Company News For Jul 11, 2018   [Jul-11-18 10:04AM  Zacks]
▶ After-hours buzz: PCAR, WHD & more   [Jul-09-18 05:43PM  CNBC]
▶ 5 Cheap Large Cap Stocks to Buy Now   [Jun-28-18 11:10AM  InvestorPlace]
▶ Macquarie Finds Plenty Of Reasons To Like Paccar   [Jun-05-18 11:52AM  Benzinga]
▶ Paccar Stock Falls After Goldman Sachs Downgrade   [May-31-18 04:18PM  TheStreet.com]
▶ Why Paccar Won't Keep on Trucking   [10:53AM  Barrons.com]
▶ PACCAR Investor Conference   [May-16-18 05:00PM  Business Wire]
▶ Peterbilt to make an all-electric truck as Tesla's semi faces uncertainty   [May-11-18 07:18AM  American City Business Journals]
▶ Why More Companies Might Issue 'Special Dividends' Soon   [May-05-18 12:00PM  TheStreet.com]
▶ 5 Stock Picks That Would Attract Warren Buffett   [May-04-18 06:00AM  Investopedia]
▶ PACCAR Increases Regular Quarterly Cash Dividend   [May-01-18 03:10PM  Business Wire]
▶ PACCAR Inc to Host Earnings Call   [09:00AM  ACCESSWIRE]
▶ Paccar: 1Q Earnings Snapshot   [08:14AM  Associated Press]
▶ Auto Industry Stock Outlook - April 2018   [Apr-23-18 05:00PM  Zacks]
▶ PACCAR Inc (NASDAQ:PCAR): Will The Growth Last?   [Apr-12-18 03:11PM  Simply Wall St.]
▶ Time to Get Greedy With Trucking Stocks?   [07:16AM  Motley Fool]
▶ New Strong Buy Stocks for March 14th   [Mar-14-18 09:42AM  Zacks]
▶ PACCAR And Other Top Dividend Stocks   [Mar-08-18 08:02AM  Simply Wall St.]
▶ Buy The Dip In PACCAR, Says Longbow Research   [Mar-06-18 04:11PM  Benzinga]
▶ Help! My Stock is Stuck in No Man's Land   [Feb-22-18 11:00AM  Zacks]
▶ PACCAR Elects New Director   [Feb-16-18 11:00AM  Business Wire]
▶ PACCAR Inc to Host Earnings Call   [09:00AM  ACCESSWIRE]
▶ Paccar tops Street 4Q forecasts   [08:12AM  Associated Press]
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