Caterpillar Inc. (CAT)

FairStock Score: 63/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Caterpillar as a cyclical industrial franchise rather than a bond substitute. The business is clearly profitable: in fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $20.5 billion, net income $3.6 billion, and diluted EPS $7.77, up from $16.6 billion, $2.2 billion, and $4.62 in fiscal Q2 2025. The latest quarter's net margin was 17.49%. FairStock's calculated ROE is 56.97%, Piotroski F-Score is 9/9, and Altman Z-Score is 3.74, while trailing free cash flow is $9.0 billion. That suggests a strong operating engine and healthy accounting signals. But the Lynch category is cyclical, and the annual record shows why: FY2025 revenue was $67.6 billion and net income $8.9 billion, down from FY2024 net income of $10.8 billion on $64.8 billion revenue. Leverage is meaningful, with D/E 2.33, and ROCE is only 9.03%. At the 2026-10-26 close of $692.13, FairStock shows a $318.2 billion market cap, P/E 29.81, P/B 16.41, FCF yield 2.8%, Graham Number $148.47, and margin of safety -362.72%. The earnings-based PEG is 0.46 and EV/EBITDA is 21.05, but Graham would focus on the lack of asset protection and the demanding price. The 0.81% dividend yield offers little income cushion, and the 52-week range of $521.67 to $1073.46 reminds me that the shares can swing. I see a high-quality industrial business, but the margin of safety is absent at this quote.

In plain English: Caterpillar makes heavy machinery for construction, mining, energy, and rail. The business looks strong, with rising sales and profits in the latest quarter and a lot of cash coming in, but it is a cyclical company and carries significant debt. At the 2026-10-26 close, the price looks expensive compared with the company's assets and a conservative estimate of what the shares may be worth, even though earnings are growing quickly.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer