Caterpillar Inc (CAT) is overvalued and Federal Signal Corp (FSS) is slightly overvalued.
Both trade above our estimate of their intrinsic value. FSS is the closer of the two: -16%, against -138% for CAT.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 11.1% (average of 3 methods) values the shares at $339.81; the price of $808.01 is 138% above that value, and 70% of that value comes from beyond year five.
Leak Score 65/100 on 10 of 12 signals
Discounting its cash flows at 10.5% (average of 3 methods) values the shares at $99.88; the price of $115.69 is 16% above that value, and 72% of that value comes from beyond year five.
Leak Score 59/100 on 3 of 12 signals
| Metric | CAT | FSS |
|---|---|---|
| Verdict | Overvalued | Slightly overvalued |
| Price | $808.01 | $115.69 |
| Intrinsic value | $339.81 | $99.88 |
| Margin of safety | -138% | -16% |
| Leak Score | 65/100 (10/12) | 59/100 (3/12) |
| Market cap | $371.4B | $7.1B |
| Revenue growth, 5 years | 10.1% | 14.0% |
| Operating margin | 18.3% | 16.8% |
| Net margin | 14.5% | 11.7% |
| Return on equity | 57.0% | 20.6% |
| Debt to equity | 2.33 | 0.32 |
| P/E | 34.8x | 24.9x |
| Forward P/E | 24.9x | 20.0x |
| P/B | 19.1x | 4.7x |
| Dividend yield | 0.8% | 0.5% |