Deere & Co. (DE) — Company Profile & Fundamentals Deere & Co. manufactures agricultural, construction and forestry equipment and related services and presents a capital‑intensive but highly profitable profile, with trailing twelve‑month operating cash flow of $7.70B and a recent ROE of 18.3% . Profitability & Cash Conversion The company is performing well on profitability and cash conversion: trai
Deere & Co. manufactures agricultural, construction and forestry equipment and related services and presents a capital‑intensive but highly profitable profile, with trailing twelve‑month operating cash flow of $7.70B and a recent ROE of 18.3%.
The company is performing well on profitability and cash conversion: trailing twelve‑month operating margin remains elevated at 27.2% and gross margin is 37.2%, while average net margin over recent periods is about 13.7% and the most recent net margin is 10.3%. Deere converts earnings into cash consistently — operating cash flow of $7.70B exceeds trailing twelve‑month net income of $4.81B and free cash flow margin is roughly 12.1%. Shareholder capital has compounded as well: five‑year book value per share CAGR was about 12.7% and measured net income stability (avg/stdev) is 3.73, indicating predictable earnings.
There are meaningful areas of weakness to monitor. Revenue and EPS have weakened from mid‑2023 peaks: revenue per share is down from roughly $226 to $172.41 (about a 24% drop) and diluted EPS fell from around $37 to $17.74 (about a 52% decline). One‑year growth rates remain negative with revenue per share growth at -2.6% and diluted EPS growth at -22.6%. Margins and returns have trended lower over the past year — gross margin slid from 40.6% to 37.2%, operating margin from 30.3% to 27.2%, net margin from 12.4% to 10.3%, and ROE has declined from a 46.7% peak to 18.3%.
Key fundamentals to watch going forward are top‑line and profitability dynamics and their translation into cash and returns: quarterly revenue and net income trends (Revenue & Net Income), per‑share revenue and diluted EPS (EPS Diluted & Revenue per Share) and their growth rates (Revenue & EPS Growth); gross, operating and net margin trajectories (Profit Margin Trends); the path of ROE (Return on Equity (ROE)); the relationship of operating cash flow to net income and free cash flow margin (Earnings Quality Analysis, Strategic Capital Allocation); and the evolving price‑to‑earnings multiple (Price-to-Earnings (PE) Ratio Trend).
The foundation of business quality and long-term value creation
DEERE & CO’s revenue and net income showed multi-quarter highs in early-to-mid 2023, with revenue reaching $17.39B (2023-04-30) and net income peaking at $2.98B (2023-07-30). After those peaks both metrics trended downward with intermittent recoveries through 2024 and 2025; notable higher points include revenue of $15.23B (2024-04-28) and net income of $2.37B (2024-04-28 and 2023-10-29).
More recently the series exhibits volatility: revenue fell to $8.51B (2025-01-26) with net income of $869.0M, recovered to roughly $12B–$12.8B and $1.06B–$1.80B across mid-to-late 2025, and then declined again in the latest quarter. The most recent quarterly revenue was $9.61B. The most recent quarterly net income was $656.0M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Feb 2026
Revenue composition by disclosure category for the latest period
Revenue is generated from multiple channels, including sales of agricultural, turf, construction, and forestry equipment and related implements. This encompasses tractors of various types, harvesters, loaders, excavators, dozers and loaders, backhoe loaders, skid steers, mowers, rotary mowers, utility vehicles, riding lawn and commercial mowing equipment, sugarcane harvesters and loaders, cotton pickers and strippers, hay and forage equipment, soil preparation, tillage, seeding, crop care equipment, and roadbuilding and rehabilitation machinery.
Additional revenue comes from sales of attachments and parts for equipment, along with aftermarket support services designed to manage customer equipment and service needs throughout the product lifecycle.
Financial Services revenue is derived from products identified as retail notes, revolving charge accounts, wholesale receivables, leases, and extended warranties.
Technology- and data-related offerings contribute revenue through hardware and devices, embedded software, connectivity, data platforms, applications, and Solutions as a Service (SaaS).
Value-add services and precision upgrades are offered as part of lifecycle solutions and aftermarket/support capabilities.
Customers are operated in specified crop and function end markets, including corn and soy, small grain, cotton, sugarcane, high-value crops, and small acreage crops.
Other customer segments include those in agricultural production such as dairy and livestock, turf and grounds maintenance (including lawn, property, and golf course maintenance), forestry, timber-harvesting operations, and construction and roadbuilding markets, with specific mention of earthmoving and road rehabilitation activities.
The company relies on a dealer channel considered foundational and best-in-class for sales and service delivery.
Enterprise integration of aftermarket and support capabilities ensures management of customer equipment, service, and technology needs across the full product lifecycle, supporting the dealer network.
Financial Services offerings are explicitly categorized into retail notes, revolving charge accounts, wholesale receivables, leases, and extended warranties, marking a distinct product category.
Aftermarket and support services represent lifecycle solutions that encompass proactive and reactive support, parts access, value-add services, and precision upgrades throughout a product's lifecycle.
Core product offerings consist of equipment and implements across highlighted segments and categories.
The dealer channel is identified as a foundational element supporting product and service delivery.
Employees dedicated to manufacturing quality, innovative solutions—including automation, autonomy, digitalization, lifecycle management, and SaaS—are core to the company's strategic framework and ambitions.
Analyzing long-term margin stability and competitive positioning
Over the past four reported quarters, DEERE & CO’s margins have moved lower.
Gross margin declined sequentially from 40.6% (2025-04-27) to 39.7% (2025-07-27), 38.4% (2025-11-02), and 37.2% (2026-02-01).
Operating margin followed a similar path, falling from 30.3% to 29.3%, 28.2%, and 27.2% over the same quarters.
Net profit margin also trended down, from 12.4% to 11.7%, 11.0%, and 10.3%.
Looking back further, there was a notable inflection in late 2023 when gross margin rose from 26.4% (2023-07-30) to 38.4% (2023-10-29), after which gross and operating margins stayed generally in the high-30s/low-30s range until the recent quarterly declines.
The most recent observed values are: gross margin 37.2%, operating margin 27.2%, net profit margin 10.3%.
Understanding Profit Margins
Between Jan 2025 and Feb 2026, Deere Co converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
DEERE & CO shows a multi-year rise in both reported net income and operating cash flow through 2022–2023, with net income reaching double-digit billions while operating cash flow lagged. Beginning in 2023 and into 2024 both series rolled over and trended lower; the decline is larger in net income from its peak, while operating cash flow also fell from highs around $9B. A clear inflection appears in late 2024/early 2025 when operating cash flow began to consistently exceed trailing twelve-month net income.
Over the most recent quarters the trailing twelve-month operating cash flow has remained above net income by roughly $2–3 billion, with both metrics down versus the 2024–2025 highs. The latest reported TTM figures are: Operating Cash Flow (TTM) $7.70B and Net Income (TTM) $4.81B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
DEERE & CO's trailing twelve-month ROE has moved lower over the past several quarters. After a peak of 46.7% in the quarter ended 2023-10-29, ROE declined to 35.7% (2024-07-28), then to 27.7% (2025-01-26) and continued downward through 2025 to 20.7% (2025-07-27), 19.4% (2025-11-02) and 18.3% (2026-02-01). The most pronounced inflection occurred in late 2023, marking a shift from the high‑30s/40s range into a steady descent.
Over the longer term, the series shows sustained elevated ROE through the 2010s and early 2020s with many quarters in the 30% range before the late‑2023 peak and subsequent decline. The most recent trailing twelve-month Return on Equity (ROE) for DEERE & CO was 18.3%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
DEERE & CO’s operating cash flow (TTM) has moderated in the most recent quarters after peaking in late 2024/early 2025. Operating cash rose to about $9.23B at the 2024-10-27 period and remained near $9.0B into early 2025, then trended downward through 2025 to $7.46B (2025-11-02) before a slight uptick to $7.70B in the latest 2026-02-01 reading. Operating cash remains positive and is the largest cash inflow of the three categories.
Investing cash flow (TTM) has become markedly less negative over the same span, moving from large outflows around -$8.75B to -$8.29B in 2023/early 2024 and stepping down through 2025 to -$2.06B (2025-11-02) and -$1.65B most recently (2026-02-01).
Financing cash flow (TTM) has shifted from net inflows in 2023 (e.g., $2.81B at 2023-10-29) to progressively larger net outflows across 2024–2026, reaching -$6.15B in the latest period.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
DEERE & CO's trailing P/E ratio has expanded sharply over the last two years, rising from 10.8x on 2024-01-28 to 30.0x on 2026-02-01. The increase was gradual through 2024 (11.5x on 2024-04-28, 12.4x on 2024-07-28, 15.8x on 2024-10-27) before larger quarter-to-quarter moves in 2025 (21.1x on 2025-01-26, 22.1x on 2025-04-27, 26.6x on 2025-07-27), a modest dip to 24.9x on 2025-11-02, and a subsequent rise to 30.0x on 2026-02-01.
Over the full series, the P/E has moved from low single-digit and low-teen levels in the early 2010s (6–8x in 2012–2013) into the mid-teens and occasional spikes (notably 32.1x on 2018-01-28). The most recent Price-to-Earnings (P/E) ratio for DEERE & CO was 30.0x (period ending 2026-02-01).
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.