Caterpillar Inc. (CAT)
Quantitative Summary
DeterministicCAT trades at 43.7x earnings, roughly in line with its sector average of 44.7x. Financial health is average: Piotroski 6/9, Altman Z 5.1. DCF fair value of $159 implies 80% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of this industrial leader demonstrate a robust capital allocation profile, evidenced by an ROIC-WACC spread of +2.1% that confirms value creation above the cost of equity. This high return is primarily driven by significant financial leverage rather than operational efficiency, as the DuPont decomposition reveals an Equity Multiplier of 4.62x outweighing moderate asset turnover of 0.69x and healthy net margins of 13.1%. Creditworthiness remains solid with a Z-Score of 4.7 and low earnings manipulation risk indicated by a Beneish M-Score of -2.43, while the Piotroski F-Score of 6/9 suggests moderate financial strength despite recent revenue growth deceleration to just 4.3% year-over-year.
Valuation metrics present a stark divergence between current pricing and intrinsic models; trading at 38.2x earnings versus a sector average of 32.1x, the stock commands a significant premium that appears unsupported by discounted cash flow analysis projecting a fair value $77.4% below current levels. This discrepancy implies the market is pricing in aggressive future free cash flow growth averaging 33.7% over ten years, a trajectory inconsistent with the implied downside from standard valuation frameworks. While Fama-French factor data highlights strong alpha generation (57.43%) and a slight value tilt (0.172), these momentum indicators do not necessarily validate the elevated multiple when weighed against conservative DCF outcomes.
Insider activity further complicates the risk-reward assessment, with $105 million in net selling over the last 90 days suggesting internal skepticism regarding near-term prospects despite the company's historical profitability factors remaining neutral. The synthesis of these signals indicates a security where strong underlying capital efficiency and credit quality are currently offset by substantial valuation headwinds and active insider distribution. Investors must weigh whether the market is overly optimistic about sustained high-growth execution or if current prices adequately compensate for the leverage-dependent ROE structure and divergent analyst valuations.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 4% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 11.3% | 13.3% | 15.3% |
|---|---|---|---|
| 2% | $188 | $147 | $118 |
| 3% | $208 | $159 | $127 |
| 4% | $234 | $174 | $136 |
Center = base case. Green = >10% upside, Red = >10% downside vs $909.81.
Pre-computed DCF: WACC=13.3%, terminal growth 3%. Fair value $159 (-79.9%). Not investment advice.
Valuation Context
Currently trading 16% below its 5-year average P/E of 49.9x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedCaterpillar Inc. is currently trading at $888.31, a position that requires contextualization against its moving average envelope to assess relative value. Without specific upper and lower band boundaries provided in the dataset, it is impossible to determine whether this price point represents a statistical deviation suggesting an overextended condition or one aligned with historical means. In the absence of defined mean-reversion parameters such as standard deviations from the simple moving averages, any assertion regarding proximity to support or resistance levels remains speculative rather than factual based solely on the current figure. The technical setup implies that determining potential reversal opportunities necessitates additional data points defining the volatility bands surrounding this price action. If the market were trading significantly outside a calculated envelope, it might suggest a higher probability of mean reversion toward the central trend line; however, confirming such a dynamic requires knowledge of the specific SMA values and their spread at this moment. Consequently, while the stock sits within the Industrials sector contextually, isolating its precise location relative to these statistical limits cannot be achieved with the limited information available. Investors must evaluate whether $888.31 represents an anomaly or a consolidation point by integrating missing volatility metrics into their own analysis frameworks. The current snapshot does not inherently signal extreme undervaluation or overvaluation without comparative band data, leaving the assessment of mean-reversion potential open to interpretation based on future price movements relative to those undefined thresholds.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-04-20 | $1.5100 | 0.0% |
| 2026-01-20 | $1.5100 | 0.0% |
| 2025-10-20 | $1.5100 | 0.0% |
| 2025-07-21 | $1.5100 | +7.1% |
| 2025-04-21 | $1.4100 | 0.0% |
| 2025-01-21 | $1.4100 | 0.0% |
| 2024-10-21 | $1.4100 | 0.0% |
| 2024-07-22 | $1.4100 | +8.5% |
| 2024-04-19 | $1.3000 | 0.0% |
| 2024-01-19 | $1.3000 | 0.0% |
| 2023-10-20 | $1.3000 | 0.0% |
| 2023-07-19 | $1.3000 | +8.3% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
10-K Risk Factor Expansion
Word count of Item 1A (Risk Factors) across annual filings. Rising counts often signal new regulatory, competitive, or operational risks.
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like DIA or XLI, the fund manager is mechanically forced to buy or sell CAT shares regardless of Caterpillar Inc.'s individual fundamentals. We estimate $49.9B of passive capital is structurally linked to CAT through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Caterpillar Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Caterpillar Inc. (CAT) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies GOLDMAN SACHS GROUP INC (GS) as the most exposed collateral stock, sharing 1 ETFs with CAT. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 38 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
CAT Ownership Dynamics
Passive funds hold 1 in every 7 CAT shares, reducing daily market volatility.
Caterpillar Inc. (CAT) exerts measurable gravity on the passive index market, currently representing 10.6% of the DIA (DIA) and 7.6% of the State Street Industrial Select Sector SPDR ETF (XLI). Across 36 tracked ETFs, approximately 62M shares (13.6% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest CAT Exposure
Float lock-up computed from 36 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
CAT Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Caterpillar Inc. over the past year sits near $410.86 (14% of 252-day volume). The current price of $909.81 trades 121.4% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (14% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
CAT Capital Efficiency
How efficiently does Caterpillar Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Caterpillar Inc. converts 52% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. The positive ROIC-WACC spread of 2.0% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 71 | $902.30 | $64,063.3 |
| 2026-05-13 | 6,715 | $912.14 | $6.1M |
| 2026-05-11 | 200 | $897.45 | $179,490 |
| 2026-05-07 | 149 | $926.93 | $138,112.57 |
| 2026-05-04 | 11,349 | $889.67 | $10.1M |
| 2026-05-01 | 781 | $890.11 | $695,175.91 |
| 2026-04-30 | 148 | $810.05 | $119,887.4 |
| 2026-04-27 | 7 | $830.79 | $5,815.53 |
| 2026-04-20 | 5,962 | $794.65 | $4.7M |
| 2026-04-16 | 212 | $770.17 | $163,276.04 |
| 2026-04-15 | 6 | $794.25 | $4,765.5 |
| 2026-04-13 | 2,200 | $790.66 | $1.7M |
| 2026-04-08 | 12,149 | $724.44 | $8.8M |
| 2026-04-06 | 26 | $717.22 | $18,647.72 |
| 2026-04-02 | 23,475 | $730.32 | $17.1M |
| 2026-04-01 | 189 | $708.46 | $133,898.94 |
| 2026-03-27 | 1 | $703.19 | $703.19 |
| 2026-03-25 | 47 | $716.63 | $33,681.61 |
| 2026-03-24 | 183 | $701.70 | $128,411.1 |
| 2026-03-23 | 100 | $680.88 | $68,088 |
| 2026-03-13 | 4,026 | $700.69 | $2.8M |
| 2026-03-11 | 6,143 | $716.68 | $4.4M |
| 2026-03-06 | 284 | $706.08 | $200,526.72 |
| 2026-03-03 | 167 | $752.32 | $125,637.44 |
| 2026-03-02 | 285 | $742.83 | $211,706.55 |
| 2026-02-27 | 393 | $752.93 | $295,901.49 |
| 2026-02-23 | 90,700 | $759.74 | $68.9M |
| 2026-02-20 | 54,410 | $760.53 | $41.4M |
| 2026-02-18 | 10,152 | $764.76 | $7.8M |
| 2026-02-17 | 14,295 | $774.20 | $11.1M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| CMI | 0.756 | 0.771 | High co-movement |
| TER | 0.696 | 0.780 | Moderate |
| ETN | 0.642 | 0.701 | Moderate |
| WAB | 0.625 | 0.671 | Moderate |
| LRCX | 0.619 | 0.646 | Moderate |
| EMR | 0.618 | 0.559 | Moderate |
| AMAT | 0.605 | 0.653 | Moderate |
| MPWR | 0.597 | 0.645 | Moderate |
| TEL | 0.594 | 0.578 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare CAT to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.