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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% overvalued
Profile
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) Valuation

GoodMoat Analysis

Based on data as of March 26, 2026

Cummins Inc appears unfavourable from a value investing perspective. The current price of $553.36 is 67% above the GoodMoat Target of $331.20, indicating a negative margin of safety. The stock's P/E of 26.9x is high relative to its minimal revenue growth of 1.1%.

Read full analysis
Based on the GoodMoat Investment Framework's valuation assessment, Cummins does not present an attractive opportunity. The primary valuation tool, a Discounted Cash Flow (DCF) model, yields a GoodMoat Target of $331.20. The current price of $553.36 represents a -67% margin of safety, which falls deep into the framework's 'Unfavourable' band (less than 10%). This suggests the stock is trading significantly above its estimated intrinsic value. Comparing the forward P/E of 26.9x to the company's fundamentals reveals a disconnect; this multiple is typically reasonable for a company growing at 50%, not 1.1% YoY revenue growth. The P/E also appears elevated relative to the industrials sector average, which often trades at a lower multiple. While the company shows some quality indicators like a strong ROE of 23.0% and a manageable debt level, the valuation metrics do not justify the price. The low free cash flow yield of 3.1% further supports the view that the stock is richly priced. For a value investor seeking a margin of safety, the current price offers none based on this analysis.

CMI Fair Value Estimate

$331.2049.6% overvalued

Blended fair value estimate based on DCF, Graham Number, and earnings-based models.

CMI Valuation Metrics

FCF$2.39B
FCF Growth Rate-0.14%
EPS Growth (CAGR)3.90%
WACC10.00%

CMI Valuation & Fair Value Analysis

Cummins Inc (CMI) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.

The GoodMoat Fair Value target for Cummins Inc is $331.20. The current stock price is $657.44, suggesting the stock is 98.5% overvalued.

The price-to-earnings (P/E) ratio is 31.92. Price-to-book ratio is 7.35. Price-to-sales ratio is 2.70. Enterprise value to EBITDA is 17.92. PEG ratio is 0.81.

GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of Cummins Inc's intrinsic value.