One-glance verdict
Overvalued
$276.41 our estimate vs market $532.23
Wall Street consensus: $757.02 (173.9% higher than our fair-value estimate)
93% above our estimate, beyond the bull case
Fundamentals snapshot
Cummins Inc.
CMI · NYQ · Industrials · Specialty Industrial Machinery
Current price
$532.23
52-week range
$400.72 - $737.76
Market cap
$73.27B
Balance sheet
Watch
11.75x Adequate
Net debt $4.36B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 3.1% last year.
- Reward Returns 21.1% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 9.0% above its 5-year average P/E.
What this company does
Cummins Inc.
Cummins is a major producer of engines and power systems for everything from big rigs and construction machinery to backup generators. The company's main business is selling these engines to equipment manufacturers, but it also generates steady sales from repairs and replacement parts. This matters because their technology is a key part of the supply chain (the network of companies that get products from raw material to the customer) for global trade, and they are also developing future-focused products like electric and hydrogen power.
How the company got here
Founded in 1919 by Clessie Cummins and William Irwin, the company initially focused on developing the diesel engine, a relatively new technology at the time. A key moment came in 1933 with the success of their Model H engine, which became popular in railroad switchers and later dominated the heavy-duty truck market after World War II. Over the decades, Cummins grew by expanding internationally, opening its first overseas plant in 1956, and by acquiring companies that made key components like filters and turbochargers. This strategy of owning the technologies that support its engines helped it become a global power leader. The company changed its name from Cummins Engine Company to Cummins Inc. in 2001 to reflect its broader range of power solutions.
What it actually does
Cummins is a company that makes a wide variety of power solutions for customers all over the world. You might not buy from them directly, but you've almost certainly used something they've powered, like a city bus, a delivery truck, or even a large boat. They are best known for their diesel and natural gas engines that go into everything from Ram pickup trucks to massive mining equipment. Beyond engines, they also make the critical parts that help engines run cleanly and efficiently, as well as large generator sets that provide backup power for places like hospitals and data centers (the buildings that power the internet).
Engine
This is the company's original and most well-known business, making up about a quarter of its sales. This segment designs and manufactures a wide range of diesel and natural gas engines for many different uses. Customers are typically large vehicle and equipment makers, such as those who build heavy-duty trucks, buses, construction machinery, and agricultural equipment. For example, the powerful engine in a Dodge Ram heavy-duty pickup truck is a famous product from this division.
Distribution
This segment is the company's sales, service, and support arm, and it's the largest part of the business, bringing in about a third of total revenue. Think of this as the face of Cummins to the end-user; it's a global network of hundreds of company-owned and independent locations that sell engines, power generation systems, and parts. They also provide the crucial service and repair to keep all that equipment running, whether it's in a truck, a boat, or a factory. This creates a long-term relationship with customers who need reliable support.
Components
This division builds the essential parts that make engines and power systems work better, cleaner, and more efficiently, and it accounts for roughly a quarter of the company's revenue. These aren't just simple parts; they are advanced technologies like turbochargers (devices that force more air into the engine to boost power), fuel systems, and emission solutions that help clean the engine's exhaust. By making these critical components themselves, Cummins can ensure all the pieces work together perfectly to meet performance and environmental standards.
Power Systems
This segment focuses on making very large, high-horsepower engines and complete power generation systems, representing a significant portion of sales. These are not the engines you'd find in a typical truck; they are giants used in mining equipment, marine vessels, and trains. A major part of this business is building generator sets, which are essentially self-contained power plants that provide either primary or backup power for large facilities like data centers, hospitals, and industrial buildings.
Accelera
This is Cummins' newest and smallest business segment, focused entirely on zero-emissions technologies. Launched in 2023, Accelera develops and produces things like batteries, electric powertrains for trucks and buses, and fuel cells that run on hydrogen. It also makes electrolyzers, which are devices that produce clean hydrogen fuel. While it's currently a very small slice of the company's total revenue, it represents Cummins' bet on a future where industries move away from traditional fuels toward more sustainable energy sources.
What management is betting on now
Cummins is focused on a dual strategy it calls "Destination Zero," which aims to reduce emissions from its products and reach net-zero emissions by 2050. This means they are continuing to improve the efficiency and reduce the environmental impact of their traditional diesel and natural gas engines, which still make up the vast majority of their business. At the same time, they are heavily investing in future technologies through their Accelera brand, such as hydrogen fuel cells and battery electric systems, to lead in the transition to cleaner power. The company is also expanding its capacity to build power generation systems to meet the growing demand from data centers and other industries that need reliable, uninterrupted power.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$381.00M
FY2024 Q4
$882.00M
FY2025 Q1
$-165.00M
FY2025 Q2
$554.00M
FY2025 Q3
$1.01B
FY2025 Q4
$990.00M
FY2026 Q1
$120.00M
FY2026 Q2
$1.25B
Revenue
$9.46B
Net income
—
Diluted EPS
6.73
Operating cash flow
$1.50B
Free cash flow
$1.25B
Fetching…
Sources
Revenue
$8.40B
Net income
—
Diluted EPS
4.71
Operating cash flow
$309.00M
Free cash flow
$120.00M
Fetching…
Sources
Revenue
$8.54B
Net income
—
Diluted EPS
4.25
Operating cash flow
$1.53B
Free cash flow
$990.00M
Fetching…
Sources
Revenue
$8.32B
Net income
—
Diluted EPS
3.86
Operating cash flow
$1.30B
Free cash flow
$1.01B
Fetching…
Sources
Revenue
$8.64B
Net income
—
Diluted EPS
6.43
Operating cash flow
$785.00M
Free cash flow
$554.00M
Fetching…
Sources
Revenue
$8.17B
Net income
—
Diluted EPS
5.96
Operating cash flow
$-3.00M
Free cash flow
$-165.00M
Fetching…
Sources
Revenue
$8.45B
Net income
—
Diluted EPS
3.22
Operating cash flow
$1.42B
Free cash flow
$882.00M
Fetching…
Sources
Revenue
$8.46B
Net income
—
Diluted EPS
5.86
Operating cash flow
$640.00M
Free cash flow
$381.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $276.41 vs current price $532.23
Wall Street consensus is the average analyst price target: $757.02 (173.9% higher than our fair-value estimate).
Our most-likely fair value is $276.41 a share — about 48.1% below today's price of $532.23, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $4.4B. Interest coverage 11.7x.
Net debt
$4.36B
Interest coverage
11.75x
Cummins Inc.'s profit covers its interest bill about 11.7 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
CMI
BASELINE
Cummins Inc.
Total debt $8.29B Interest coverage 11.75x This is the baseline the peer rows are being compared against.
Total debt $45.15B Interest coverage 22.21x +89% vs CMI Carries about 1.9x more debt cushion than CMI.
Total debt $64.58B Interest coverage 2.65x -77% vs CMI Carries about 4.4x less debt cushion than CMI.
Total debt $14.82B Interest coverage 10.42x -11% vs CMI Has roughly the same debt cushion as CMI.
Total debt $21.33B Interest coverage 21.61x +84% vs CMI Carries about 1.8x more debt cushion than CMI.
Total debt $8.73B Interest coverage 11.56x -2% vs CMI Has roughly the same debt cushion as CMI.
What you should know
The case for and against CMI
3 Rewards
1 Risk
Rewards
-
Revenue grew 3.1% last year.
-
Returns 21.1% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 9.0% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
27.17x
Forward P/E
15.43x
P/B
5.70x
P/S
2.11x
EV/EBITDA
15.68x
PEG ratio
1.07x
Profitability
How much profit each dollar creates
Gross margin
25.8%
Operating margin
11.9%
Net margin
7.8%
ROE
21.1%
ROA
7.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.60x
Current ratio
1.73x
Quick ratio
0.98x
Total debt
$8.29B
Total cash
$3.92B
Growth
How the business has been compounding
Revenue TTM
$34.71B
Revenue 5Y CAGR
8.8%
EPS TTM
19.59
EPS 5Y CAGR
10.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.65B
Free CF TTM
$2.39B
FCF margin
6.9%
Dividend
Shareholder payout
Yield
1.7%
Payout ratio
40.9%
Last ex-div date
2026-08-21