Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 6.23%, lower than industry average of 6.56%.

Growth Trajectory

Profitability

In the growth phase company makes 17.96% profit on every dollar of sales, higher than industry average of 10.25%.

Profitability Trajectory

Risk Profile

Investors expect at least 9.81% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
124.39B USD
Equity Value
89.09B USD
FCF Yield
52.29%
Average ROIC
17.66%
Cost of Capital
9.45%
P/E Ratio
20.02x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues63.14B USD64.81B USD
Operating Income or EBIT12.20B USD13.88B USD
Interest Expense474M USD512M USD
Book Value Of Equity18.66B USD19.49B USD
Book Value Of Debt40.75B USD38.41B USD
Cash and Marketable Securities5.44B USD6.89B USD
Number of Shares Outstanding468.48M--
Minority interests3M USD0 USD
Current Stock Price417.33 USD--
Effective Tax Rate20.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-9.13%
-2.58%Company
vs
6.55%Industry
Below Industry
Operating Margin
+9.08%
19.32%Company
vs
10.24%Industry
Above Industry
Caterpillar Inc. demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.82%
Reinvestment Rate
52.09%
Terminal value represents 54% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 66.97B USD Add
Present Value (Cash Flow Over Next 10 Years) 57.42B USD Add
Value of Operating Assets 124.39B USD Sub-total
Debt 40.74B USD Subtract
Minority Interests 3.00M USD Subtract
Cash 5.44B USD Add
Value of Equity 89.09B USD Sub-total
Number of Shares 468.48M shares Divisor
Estimated Value per Share (Fair Value) 190.16 USD Total
Current Market Price 417.33 USD Reference

Financial Projections

Total FCF Present Value
57.42B USD
Avg Revenue Growth
5.12%
Avg Operating Margin
17.65%
Avg ROIC
17.66%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue66.72B USD70.88B USD75.30B USD79.99B USD84.97B USD89.99B USD95.01B USD100.00B USD104.93B USD109.76B USD114.80B USD
Growth Rate 5.67% 6.23% 6.23% 6.23% 6.23% 5.90% 5.57% 5.25% 4.92% 4.59% 4.59%
PROFITABILITY
Operating Income12.89B USD13.05B USD13.52B USD13.99B USD14.48B USD15.33B USD16.19B USD17.04B USD17.88B USD18.70B USD19.56B USD
Operating Margin 19.32% 18.41% 17.95% 17.49% 17.04% 17.04% 17.04% 17.04% 17.04% 17.04% 17.04%
EBIT (1-tax)10.31B USD10.44B USD10.81B USD11.19B USD11.58B USD12.11B USD12.62B USD13.12B USD13.59B USD14.02B USD14.67B USD
CASH FLOW
Reinvestment2.14B USD2.28B USD2.42B USD2.57B USD2.59B USD2.55B USD2.53B USD2.50B USD2.45B USD2.56B USD7.64B USD
Free Cash Flow8.16B USD8.15B USD8.39B USD8.62B USD8.99B USD9.56B USD10.09B USD10.61B USD11.13B USD11.46B USD7.02B USD
Terminal Value--------------------166.17B USD
Present Value7.43B USD6.76B USD6.33B USD5.93B USD5.63B USD5.46B USD5.27B USD5.07B USD4.88B USD4.61B USD—
EFFICIENCY
ROIC 19.11% 18.60% 18.52% 18.41% 18.27% 18.35% 18.42% 18.46% 18.46% 18.45% 8.82%
Cost of Capital 9.80% 9.80% 9.80% 9.80% 9.80% 9.61% 9.41% 9.22% 9.02% 8.82% 8.83%
Sales/Capital 1.93x 1.93x 1.93x 1.93x 1.93x 1.96x 1.96x 1.96x 1.96x 1.96x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)