On July 16, 2026, Caterpillar Inc CAT shares fell 4.1% to a current price of $877.17. The stock has experienced a notable decline in recent weeks, with a 1-week drop of 6.5% and a 1-month decrease of 7.2%. Over the last year, however, CAT has shown significant growth, with a remarkable increase of 114.8%.
- GF Valueâ„¢ verdict: The current price is $877.17, which is 108.3% above the estimated fair value of $421.19, indicating that CAT is overvalued.
- GF Scoreâ„¢: CAT has a GF Scoreâ„¢ of 81/100, indicating a strong overall performance.
- Most notable signal: Insider activity has shown a net sell of $87.6 million against $0.2 million in buys over the last three months.
Is CAT Overvalued or Undervalued?
The current price of Caterpillar Inc CAT at $877.17 is significantly above the GF Value™ of $421.19, marking an overvaluation of 108.3%. This substantial difference highlights a lack of margin of safety for potential investors. The GF Valuation label categorizes CAT as "Significantly Overvalued," suggesting that the stock’s price does not align with its intrinsic value. Such a disparity raises concerns about the potential risks for investors, particularly if the market corrects itself to align with the underlying fundamentals.
GF Valueâ„¢ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given the significant overvaluation, investors may face increased risk if the stock price adjusts downward to more accurately reflect its GF Valueâ„¢.
How Does CAT's Valuation Compare to Its History?
| Metric | Current | Historical |
|---|---|---|
| P/E (TTM) | 43.7x | 17.4x |
| Forward P/E | 35.4x | N/A |
The current P/E (TTM) of 43.7x is 151% above its 5-year median P/E of 17.4x, indicating that CAT is trading significantly above its historical valuation. This P/E analysis aligns with the GF Valueâ„¢ verdict, reinforcing the interpretation that the stock is overvalued.
What Does CAT's GF Scoreâ„¢ Tell Us?
| Metric | Rating |
|---|---|
| GF Scoreâ„¢ | 81/100 |
| Financial Strength | 6/10 |
| Profitability | 9/10 |
| Growth | 10/10 |
| Valuation | 1/10 |
| Momentum | 6/10 |
The GF Scoreâ„¢ of 81/100 suggests that CAT is positioned well in several key areas, particularly in growth, where it received a perfect score of 10/10. However, the valuation score of 1/10 indicates significant concern regarding its current price relative to its intrinsic value. Financial strength is rated at 6/10, which is acceptable but not outstanding, while profitability remains a strong point at 9/10, indicating healthy margins.
What Are Insiders Doing with CAT Stock?
Over the last three months, insider activity for Caterpillar Inc has shown significant selling, with insiders selling $87.6 million worth of shares compared to only $0.2 million in purchases. This trend suggests a lack of confidence among insiders regarding the current valuation of the stock. Typically, heavy selling by insiders can be a bearish signal, as it may indicate that those closest to the company expect a decline in the stock price.
What This Means for Investors
Based on the current GF Valueâ„¢ of $421.19 compared to the market price of $877.17, Caterpillar Inc CAT is categorized as significantly overvalued. This suggests caution for potential investors, as the stock price does not reflect its intrinsic value based on the available data.
For the complete analysis, visit the Caterpillar Inc CAT stock page. You can also explore the GF Valueâ„¢ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions
What is CAT's GF Scoreâ„¢?
CAT's GF Scoreâ„¢ is 81/100, indicating a strong overall performance based on key financial metrics.
Is CAT overvalued or undervalued?
CAT is considered significantly overvalued with a GF Valueâ„¢ of $421.19 compared to the current price of $877.17.
What is CAT's P/E ratio?
CAT's P/E ratio (TTM) is 43.7x, which is significantly above its 5-year median P/E of 17.4x, indicating that the stock is trading at a much higher valuation than historical averages.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
