One-glance verdict
Within fair range
$372.85 our estimate vs market $471.84
Wall Street consensus: $708.66 (90.1% higher than our fair-value estimate)
27% above our estimate
Fundamentals snapshot
Cummins Inc.
CMI · NYQ · Industrials · Specialty Industrial Machinery
Current price
$471.84
52-week range
$427.50 - $737.76
Market cap
$64.96B
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 Insider ownership is only 0.2% (peer median: 0.7%).
What this company does
Cummins Inc.
Cummins is a major producer of engines and power generation equipment, selling everything from the diesel engines that power semi-trucks and construction vehicles to newer battery and hydrogen fuel cell systems. The company makes most of its money by supplying these core components to large manufacturers and by selling replacement parts and repair services. This is important because their products are essential to global transportation and industry, and their success will depend on how well they adapt to the world's shift toward cleaner energy.
How the company got here
Cummins Inc. was founded way back in 1919, originally as Cummins Engine Company, and has grown into a global leader in power solutions. The company's journey began with a focus on diesel engines, a technology that powered much of the industrial and transportation growth in the 20th century. Over the decades, Cummins has consistently innovated, expanding its product lines and adapting to changing market needs. A key turning point was its name change to Cummins Inc. in 2001, reflecting a broader scope beyond just engines. This evolution has positioned the company as a significant player in various power-related industries worldwide.
What it actually does
Think of Cummins as a company that makes the "hearts" and "brains" for a lot of heavy-duty machines and equipment. They design and manufacture engines, which are the power sources for everything from big trucks and buses to construction equipment and even some boats. Beyond just the engines, they also create many of the parts that make these engines and the vehicles they power work smoothly and efficiently, like fuel systems and electronic controls. They also offer solutions for generating electricity and are increasingly involved in newer, cleaner energy technologies.
Engine
This is Cummins' core business, where they design and build a wide variety of diesel and natural gas engines. These engines are the powerhouses for many different types of vehicles and equipment, including heavy-duty trucks, buses, agricultural machinery, and construction equipment. Customers who buy these engines are typically manufacturers of these vehicles and machines, who then incorporate them into their final products. This segment is a significant portion of Cummins' overall business, representing the foundational technology the company is known for.
Distribution
The Distribution segment acts like Cummins' extended arm, providing sales and support for the company's products and services. This includes selling genuine Cummins parts and offering repair and maintenance services through a network of branches and independent dealers. They also provide services like application engineering, which helps customers figure out the best Cummins power solution for their specific needs. This segment is crucial for ensuring customers have ongoing support and access to the parts they need to keep their Cummins-powered equipment running.
Components
This segment focuses on the specialized parts and technologies that enhance engine performance and emissions control. It includes a range of products such as turbochargers, fuel systems, filtration systems, and aftertreatment solutions like catalytic converters that reduce pollution. These components are vital for making engines more efficient, reliable, and compliant with environmental regulations. While not as large as the engine segment, it's a critical area that adds value and technological sophistication to Cummins' offerings.
Power Systems
The Power Systems segment is where Cummins provides solutions for power generation and large, high-horsepower engines. This includes generating sets that provide electricity for everything from backup power for buildings to primary power in remote locations, often using diesel or natural gas. They also offer engines for specialized applications like mining and marine vessels. This segment caters to customers needing robust and reliable power solutions for demanding industrial and commercial uses.
Accelera
Accelera represents Cummins' commitment to the future of sustainable power. This segment is focused on developing and providing electrified power solutions, including battery systems, fuel cells (which generate electricity from chemical reactions, often using hydrogen), and electric powertrains. These technologies are designed for applications like electric buses, trucks, and other vehicles, aiming to reduce emissions and reliance on fossil fuels. It's a smaller but rapidly growing part of Cummins, reflecting the global shift towards cleaner energy.
What management is betting on now
Cummins' leadership is heavily focused on navigating the transition to a lower-carbon future while maintaining strength in its traditional engine business. A key strategy is investing significantly in new technologies through its Accelera segment, particularly in areas like hydrogen fuel cells and battery-electric systems, to meet growing demand for sustainable power solutions. Simultaneously, they are working to make their existing diesel and natural gas engines more efficient and cleaner. Management is also prioritizing strengthening their distribution and service networks to ensure customers have reliable support for both new and existing power technologies.
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 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
FY2026 Q3
$1.10B
Revenue
$9.44B
Net income
—
Diluted EPS
8.25
Operating cash flow
$1.41B
Free cash flow
$1.10B
Fetching…
Sources
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
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Sources
Revenue
$8.45B
Net income
—
Diluted EPS
3.22
Operating cash flow
$1.42B
Free cash flow
$882.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $372.85 vs current price $471.84
Wall Street consensus is the average analyst price target: $708.66 (90.1% higher than our fair-value estimate).
Our most-likely fair value is $372.85 a share — about 21.0% away from today's price of $471.84, so the stock currently looks fairly priced.
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 $45.20B Interest coverage 22.21x +89% vs CMI Carries about 1.9x more debt cushion than CMI.
Total debt $15.10B Interest coverage 10.42x -11% vs CMI Has roughly the same debt cushion as CMI.
Total debt $64.58B Interest coverage 2.65x -77% vs CMI Carries about 4.4x less debt cushion than CMI.
Total debt $2.85B Interest coverage 5.68x -52% vs CMI Carries about 2.1x less debt cushion than CMI.
Total debt $4.01B Interest coverage 9.88x -16% vs CMI Carries about 1.2x less debt cushion than 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
-
Insider ownership is only 0.2% (peer median: 0.7%).
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)
24.11x
Forward P/E
13.55x
P/B
5.06x
P/S
1.87x
EV/EBITDA
14.02x
PEG ratio
1.00x
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
19.57
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
1.9%
Payout ratio
40.9%
Last ex-div date
2026-11-20