Shares of semi-truck manufacturer Paccar (PCAR 0.53%) stock slipped 1.9% through 2:50 p.m. ET Tuesday despite delivering an earnings beat this morning. Analysts forecast Paccar to earn $1.05 per share on sales of $6.1 billion in Q4 2025, but the company actually earned $1.06 per share on sales of $6.8 billion.
So why aren't investors impressed?
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Paccar Q4 earnings
For one thing, while they exceeded expectations, Paccar's Q4 earnings were objectively bad. Sales declined 14% year over year in the quarter, and the company's $1.06 per share profit was 36% worse than a year ago.
For full year 2025, sales declined 16% to $28.4 billion, while earnings collapsed 43% to just $4.51 per share. Despite all these bad numbers, CEO Preston Feight insisted Paccar "reported very good annual revenues and net income in 2025." Investors seem less enthusiastic, however.
Free cash flow held more or less steady at $3.7 billion, which was significantly more than the $2.4 billion the company reported as net income. (Free cash flow was only $3 billion if you count "acquisitions of equipment for operating leases" as a capital investment, which seems the safest choice. Even so, this number, too, was better than the reported profit.)
NASDAQ: PCAR
Key Data Points
Is Paccar stock a sell?
How should investors react to these numbers? At $62.8 billion in market capitalization, Paccar shares cost about 26 times trailing earnings (a bit expensive) but only 21 times free cash flow (less expensive).
Those would be fine numbers if Paccar were a growing business, but (1) right now it's shrinking, (2) Paccar gave no guidance to suggest this will change soon, and (3) analysts forecast only 5% long-term earnings growth for the stock.
As things stand, I fear Paccar stock is a sell.
