Start here if you're new
what it is
Caterpillar sells the giant machines and engines that keep construction sites, mines, and energy projects moving.
how it gets paid
Last year Caterpillar made $67.6B in revenue. Construction Industries was the main engine at $25.3B, or 37% of sales.
why it's growing
Revenue grew 4.3% last year. Ai-induced demand helped boost caterpillar’s backlog to a record of $39.8 billion in the third quarter.
what just happened
Caterpillar's latest report beat estimates, with EPS at $5.16 versus the $4.78 consensus.
At a glance
A+ balance sheet — rock-solid finances — built to survive anything
65/100 earnings predictability — reasonably predictable
34.0x trailing p/e — you're paying up for this one
1.0% dividend yield — cash in your pocket every quarter
21.0% return on capital — every dollar works hard here
xvary composite: 90/100 — above average
What they do
Caterpillar sells the giant machines and engines that keep construction sites, mines, and energy projects moving.
Caterpillar wins because size turns into uptime. It is the world's largest earthmoving equipment maker, runs at a 26.5% operating margin, and spends 3.3% of sales on R&D. When your jobsite cannot stop, you buy the machine with parts, service, and dealer support already everywhere.
How they make money
$67.6B
annual revenue · their business grew +4.3% last year
Construction Industries
$25.3B
Resource Industries
$14.0B
Energy & Transportation
$24.3B
Financial Products
$4.0B
The products that matter
construction equipment
Construction Industries
$28.4B · 42% of revenue
it is the largest segment at $28.4B, so changes in dealer orders and public works spending show up here first.
largest segment
engines and power systems
Energy & Transportation
$24.7B · +8% growth
this $24.7B segment grew faster than the rest of the company. the important part is mix: power generation and transport demand give CAT growth that does not rely only on excavators.
fastest grower
customer financing
Cat Financial
supports $67.6B equipment sales
it supports purchases tied to $67.6B in equipment sales. in human-speak: CAT does not just sell the machine, it helps close the deal.
sticky channel
Key numbers
34.0x
trailing p/e
P/E → price compared with annual profit → so what: at 34x, you are paying growth-stock pricing for a heavy-equipment company projected to grow sales 6.0%.
26.5%
operating margin
Operating margin → profit after running the business → so what: Caterpillar keeps about 27 cents of every sales dollar before interest and taxes.
21.0%
return on capital
Return on capital → profit earned on money invested in the business → so what: Caterpillar is getting $0.21 back for every $1 it puts to work.
$67.6B
annual revenue
Revenue → total money collected from customers → so what: this is a giant installed base business, not a niche equipment story.
Financial health
A+
strength
- balance sheet grade A+ — near the highest rating possible
- risk rank 2 — safer than 80% of stocks
- price stability 70 / 100
- long-term debt $27.7B (10% of capital)
- net profit margin 16.8% — keeps 17 cents of every dollar in revenue
- return on equity 33% — $0.33 profit for every $1 investors have put in
A+ with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in CAT 3 years ago → it's now worth $25,470.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Caterpillar's latest report beat estimates, with EPS at $5.16 versus the $4.78 consensus.
The beat was 7.95%. Full-year revenue was $67.6B, up 4.3%, while management also pointed to favorable conditions, infrastructure funding, autonomous traction, and a robust backlog.
$48.5B
revenue
$5.16
eps
7.95%
surprise
the number that mattered
The key number was the 7.95% EPS beat, because it showed Caterpillar still has pricing power and backlog support even with expectations already high.
-
various facets of caterpillar’s operations are experiencing favorable conditions.orders for equipment sold by the construction industries unit are flowing in from numerous regions, especially north america.
-
this is primarily due to funding provided by the infrastructure investment and jobs act.elsewhere, there is positive momentum in china, especially in the excavator market, while a long line of projects in the middle east augurs well for business there. concurrently, conditions within the resources industries division are improving as customers are loosening their purse strings. many commodities are trading at price levels that are attracting investment, especially in mining trucks and tractors.
-
too, autonomous solutions continue to gain ground.lastly, the energy & transportation segment is being driven by data center growth related to cloud computing and generative artificial intelligence (ai).
-
a robust backlog is leading to impressive levels of liquidity.
-
ai-induced demand helped boost caterpillar’s backlog to a record of $39.8 billion in the third quarter. (december-period results were due shortly after we went to press with this report.) higher volumes should help mitigate the negative impact of tariffs (estimated at between $1.5 billion and $2.0 billion, annually), resulting in impressive cash flow levels and shareholder-friendly policies.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
the #1 risk is orders rolling over after the $39.8B backlog peak.
high
backlog reversal
the stock is getting credit for breaking a six-quarter revenue slump. if backlog starts falling from the $39.8B peak, the market stops treating this like a clean reacceleration story.
pressure point: revenue and valuation at the same time
med
tariff cost drag
management estimated annual tariff costs at $1.5B–$2.0B. against a 16.8% net margin, that is not a footnote.
pressure point: margin compression
med
construction and mining cycle whiplash
construction industries is 42% of revenue and resource industries is another 21.5%. together, 63.5% of the company still depends on customers who cut orders fast when confidence drops.
pressure point: dealer inventory and new orders
med
global project timing
china excavator demand and middle east projects are helping now. they also make the rebound more exposed to trade friction and delayed customer spending.
pressure point: regional demand fade
$1.5B–$2.0B of tariff cost plus even a modest backlog drop would hit a stock trading at 34.0x trailing earnings and counting on 63.5% of revenue tied to construction and mining to stay firm.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
backlog versus the $39.8B peak
if backlog holds near record levels, the premium multiple has a case. if it slips for two straight reports, the story changes fast.
calendar
q1 2026 earnings report
due late april 2026. you want to know whether q4 was the start of a turn or one strong quarter inside a still-cyclical business.
risk
tariff costs staying at $1.5B–$2.0B
volume can offset some of it. margins still have to do the actual work.
trend
power demand inside energy & transportation
that segment grew 8% last year. if ai-related power spending stays real, CAT gets growth that looks different from its usual construction cycle.
Analyst rankings
earnings predictability
65 / 100
in human-speak, analysts think the numbers are decent for a cyclical industrial, but you should still expect earnings to swing when the equipment cycle swings.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 1,400 buyers vs. 1,281 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$349
$767
$636
current price
$558
target midpoint · 12% from current · 3-5yr high: $735 (+15% · 5% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive