Cummins Inc
Exchange: NYSESector: IndustrialsIndustry: Specialty Industrial Machinery
Cummins Inc., a global power leader, is committed to powering a more prosperous world. Since 1919, we have delivered innovative solutions that move people, goods and economies forward. Our five business segments-Engine, Components, Distribution, Power Systems and Accelera™ by Cummins-offer a broad portfolio, including advanced diesel, alternative fuel, electric and hybrid powertrains; integrated power generation systems; critical components such as aftertreatment, turbochargers, fuel systems, controls, transmissions, axles and brakes; and zero-emissions technologies like battery and electric powertrain systems and electrolyzers. With a global footprint, deep technical expertise and an extensive service network, we deliver dependable, cutting-edge solutions tailored to our customers' needs, supporting them through the energy transition with our Destination Zero strategy. We create value for customers, investors and employees and strengthen communities through our corporate responsibility global priorities: education, equity and environment. Headquartered in Columbus, Indiana, Cummins employs approximately 70,000 people worldwide and earned $3.9 billion on $34.1 billion in sales in 2024. About Centralia Coal Transition Funding Boards Weatherization Board ($10M): established to fund energy efficiency and weatherization for the residents, employees, business, non-profit organizations and local governments within Lewis County and South Thurston County; up to $1 million shall be allocated to fund residential energy efficiency and weatherization measures for low-income and moderate-income residents of Lewis County and South Thurston County; Economic & Community Development Board ($20M): established to fund education, retraining, economic development, and community enhancement; at least $5M shall be allocated to fund education, retraining and economic development specifically targeting the needs of workers displaced from the Centralia facility; Energy Technology Board ($25M): established to fund energy technologies with the potential to create environmental benefits to the state of Washington.
Did you know?
Earnings per share grew at a 3.9% CAGR.
Current Price
$657.44
-2.02%GoodMoat Value
$331.20
49.6% overvaluedProfile
Valuation (TTM)
Market Cap$90.75B
P/E31.92
EV$79.62B
P/B7.35
Shares Out138.04M
P/Sales2.70
Revenue$33.67B
EV/EBITDA17.92
Cummins Inc (CMI) Stock Analysis
GoodMoat Analysis
Cummins is a leading industrial engine manufacturer with a moderate competitive moat, but its current valuation appears significantly above estimated fair value. The stock fails the initial Moat & Quality Gate of the GoodMoat framework, indicating it may not warrant further investigation for a value investor at this price.
Read full analysis
Cummins Inc is a global leader in designing, manufacturing, and distributing engines, power generation systems, and related components. Applying the GoodMoat framework, the company likely possesses a moat based on several criteria, including technology leadership in diesel and alternative powertrains, a strong global brand, and significant scale in manufacturing and distribution. However, a precise Moat Score cannot be fully calculated without more qualitative data, but it is reasonable to assume it meets the minimum threshold of 5. The company demonstrates solid quality indicators, including a strong ROE of 23.0% and manageable debt levels (Debt/Equity of 0.61).
The primary issue is valuation. The stock trades at a P/E of 26.9x, which is high for a company with only 1.1% YoY revenue growth. More critically, the provided GoodMoat Target price of $331.20 suggests the current price of $553.36 represents a significant premium, implying a negative margin of safety. According to Section 6 of the framework, a stock must first pass the Moat & Quality Gate and then show a favourable valuation with a margin of safety of at least 20%. The combination of a full valuation and low growth leads this analysis to an 'unfavourable' conclusion under the Decision Framework, as the price does not provide a sufficient margin of safety for a value investor.
Analysis based on data as of 2024-05-15.
Market Cap$90.75B
Current Price$657.44
P/E Ratio31.92
Forward P/E—
PEG Ratio0.81
EPS$20.50
Book Value$89.46
P/B Ratio7.35
CMI Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use -0.1% FCF growth (CAGR)
Cash vs Debt
Net Debt: 4.7B
Revenue
23.6B
FY19
19.8B
FY20
24.0B
FY21
28.1B
FY22
34.1B
FY23
34.1B
FY24
33.7B
FY25
Net Income
2.3B
FY19
1.8B
FY20
2.1B
FY21
2.2B
FY22
735M
FY23
3.9B
FY24
2.8B
FY25
CMI 52-Week Range
$292.55
$671.01
50-Day MA: $583.37200-Day MA: $492.23
Did you know?
Earnings per share grew at a 3.9% CAGR.
Cummins Inc (CMI) Financial Summary
Cummins Inc (CMI) is a Industrials company in the Specialty Industrial Machinery industry, listed on NYSE. The stock currently trades at $657.44 with a market capitalization of $90.75B.
Key valuation metrics include a P/E ratio of 31.92, price-to-book ratio of 7.35, and EPS of $20.50. The company reports a profit margin of 8.4% and return on equity of 23.0%.
CMI Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $90.75B |
| P/E Ratio | 31.92 |
| EPS | $20.50 |
| P/B Ratio | 7.35 |
| P/S Ratio | 2.70 |
| EV/EBITDA | 17.92 |
| Dividend Yield | 1.16% |
| Profit Margin | 8.4% |
| Return on Equity | 23.0% |
| Debt/Equity | 0.61 |
CMI Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $23.57B | $2.26B |
| FY20 | $19.81B | $1.79B |
| FY21 | $24.02B | $2.13B |
| FY22 | $28.07B | $2.15B |
| FY23 | $34.06B | $735.00M |
| FY24 | $34.10B | $3.95B |
| FY25 | $33.67B | $2.84B |
Cummins Inc (CMI) Valuation
Based on GoodMoat's DCF model, Cummins Inc has a fair value estimate of $331.20. At the current price of $657.44, the stock appears 98.5% overvalued relative to our intrinsic value estimate.
CMI Quality Indicators
Cummins Inc maintains a profit margin of 8.4% and an operating margin of 10.6%. Return on equity stands at 23.0%. The current ratio is 1.76. Debt-to-equity ratio is 0.61.
About Cummins Inc
Cummins Inc., a global power leader, is committed to powering a more prosperous world. Since 1919, we have delivered innovative solutions that move people, goods and economies forward. Our five business segments-Engine, Components, Distribution, Power Systems and Accelera™ by Cummins-offer a broad portfolio, including advanced diesel, alternative fuel, electric and hybrid powertrains; integrated power generation systems; critical components such as aftertreatment, turbochargers, fuel systems, controls, transmissions, axles and brakes; and zero-emissions technologies like battery and electric powertrain systems and electrolyzers. With a global footprint, deep technical expertise and an extensive service network, we deliver dependable, cutting-edge solutions tailored to our customers' needs, supporting them through the energy transition with our Destination Zero strategy. We create value for customers, investors and employees and strengthen communities through our corporate responsibility global priorities: education, equity and environment. Headquartered in Columbus, Indiana, Cummins employs approximately 70,000 people worldwide and earned $3.9 billion on $34.1 billion in sales in 2024. About Centralia Coal Transition Funding Boards Weatherization Board ($10M): established to fund energy efficiency and weatherization for the residents, employees, business, non-profit organizations and local governments within Lewis County and South Thurston County; up to $1 million shall be allocated to fund residential energy efficiency and weatherization measures for low-income and moderate-income residents of Lewis County and South Thurston County; Economic & Community Development Board ($20M): established to fund education, retraining, economic development, and community enhancement; at least $5M shall be allocated to fund education, retraining and economic development specifically targeting the needs of workers displaced from the Centralia facility; Energy Technology Board ($25M): established to fund energy technologies with the potential to create environmental benefits to the state of Washington.
CMI Free Cash Flow
Cummins Inc generated $2.39B in trailing twelve-month free cash flow, representing an FCF yield of 2.63%. This moderate FCF yield indicates reasonable cash generation.
CMI Shares Outstanding
Cummins Inc has 0.14 billion shares outstanding at a share price of $657.44, giving it a market capitalization of $90.75B.
CMI Recent Insider Trades
Recent insider transactions at Cummins Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Davis Amy Rochelle (VP & Pres. - Accelera and Com) | SELL | 120 | $67910.80 |
| Davis Amy Rochelle (VP & Pres. - Accelera and Com) | SELL | 80 | $47069.60 |
| Newsome Earl (VP - Chief Information Officer) | SELL | 217 | $126821.77 |