Cummins (CMI) AI Stock Analysis

• Market Cap: $46.38B
• Dividend Yield: 2.13%
• Average Volume (3M): 958.63K
• Price to Earnings (P/E): 16.6
• Beta (1Y): 1.06
• Revenue Growth: -0.39%
• EPS Growth: 47.31%
• Country: US
• Employees: 69,600
• Sector: Industrials
• Sector Strength: 91
• Industry: Industrial - Machinery
• EPS (TTM): 5.96
• Shares Outstanding: 137,754,900
• 10 Day Avg. Volume: 932,854
• 30 Day Avg. Volume: 958,635
• PEG Ratio: -0.53
• Price to Book (P/B): 3.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.04K
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 5.62
• Enterprise Value/Ebitda: 2.40
• 1Y Price Target: $327.67
• Price Target Upside: -2.67% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

Cummins exhibits strong financial fundamentals with notable profitability and a balanced capital structure. However, recent declines in net profit margin and cash flow present challenges. The technical outlook is mixed, with potential overbought conditions. Valuation remains reasonable, and strategic initiatives, including the senior notes offering, bolster financial flexibility. Yet, economic uncertainties and trade tariffs pose significant risks.

Positive Factors

Earnings Growth

Analyst raises the price target to $350 on a higher multiple, reflecting conviction in CMI’s long-term earnings growth and path to margin expansion.

Operational Efficiency

Analyst believes Cummins has self-help operational efficiencies and pricing power that can bolster earnings.

Negative Factors

Economic Uncertainty

The company pulled its FY25 outlook due to growing economic uncertainty.

Tariff Impact

There is a possibility that not all of the tariff impact will be passed through in the near term given the fluidity of the tariff backdrop.

Cummins Business Overview & Revenue Model

Company Description

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and New Power. The company offers diesel and natural gas-powered engines under the Cummins and other customer brands for the heavy and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets; and offers new parts and services, as well as remanufactured parts and engines. It also provides power generation systems, high-horsepower engines, heavy and medium duty engines, application engineering services, custom-designed assemblies, retail and wholesale aftermarket parts, and in-shop and field-based repair services. In addition, the company offers emission solutions; turbochargers; air and fuel filters, fuel water separators, lube and hydraulic filters, coolants, fuel additives, and other filtration systems; and electronic control modules, sensors, and supporting software, as well as new, replacement, and remanufactured fuel systems. Further, it provides automated transmissions; standby and prime power generators, controls, paralleling systems, and transfer switches, as well as A/C generator/alternator products under the Stamford and AVK brands; and electrified power systems with components and subsystems, including battery, fuel cell, and hydrogen production technologies. Additionally, it offers filtration, aftertreatment, controls systems, air handling systems, automated transmissions, electric power generation systems, and batteries. The company sells its products to original equipment manufacturers, distributors, dealers, and other customers. The company was formerly known as Cummins Engine Company and changed its name to Cummins Inc. in 2001. Cummins Inc. was founded in 1919 and is headquartered in Columbus, Indiana.

How the Company Makes Money

Cummins Inc. generates revenue through several key streams. The largest portion of its revenue comes from the sale of engines and related components to original equipment manufacturers (OEMs) and distributors worldwide. This includes advanced diesel and natural gas engines for on-highway and off-highway vehicles. Another significant revenue stream is the power systems segment, which includes sales from generators and alternative energy solutions, such as hybrid and electric power products. Additionally, Cummins earns from its components segment, which offers after-treatment systems, turbochargers, and filtration products. The distribution segment provides aftermarket services and parts sales, enhancing customer support and extending product lifecycles. Cummins has established significant partnerships with OEMs and other industry players to expand its market reach and leverage its technological advancements, contributing to its overall earnings growth.

Cummins Financial Statement Overview

Summary

Cummins presents a robust financial position with strong profitability and a balanced capital structure. However, recent declines in net profit margin and cash flow suggest potential operational challenges. Continued focus on cost management and cash generation will be critical to maintain financial stability.

Income Statement

Cummins demonstrates a strong gross profit margin of 25.16% for TTM, reflecting efficient production processes. However, the net profit margin decreased to 8.20% from 11.57% in the previous year, suggesting rising costs or inefficiencies. The revenue growth rate over the years appears stable, though recent TTM revenue has slightly declined. EBIT and EBITDA margins are solid, though the decline in EBITDA margin highlights some operational challenges.

Balance Sheet

The company's debt-to-equity ratio stands at 0.66, indicating a balanced capital structure with moderate leverage. A return on equity of 25.42% for TTM is impressive, showcasing strong profitability relative to shareholder investments. The equity ratio is stable at 33.57%, suggesting a solid asset base funded by equity.

Cash Flow

Free cash flow has declined significantly, impacting overall cash flow health. The operating cash flow to net income ratio is 0.43, which suggests some pressure on cash generation relative to accounting profits. However, the positive free cash flow to net income ratio indicates sufficient cash generation to cover net income.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
33.87B	34.10B	34.06B	28.07B	24.02B	19.81B
	Gross Profit
8.52B	8.44B	8.25B	6.72B	5.70B	4.89B
	EBIT
3.87B	3.75B	1.76B	2.23B	2.71B	1.76B
	EBITDA
4.90B	6.34B	3.02B	3.80B	2.86B	3.13B
	Net Income Common Stockholders
2.78B	3.95B	735.00M	2.15B	2.13B	1.79B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.16B	2.26B	2.74B	2.57B	3.19B	3.86B
	Total Assets
32.53B	31.54B	32.01B	30.30B	23.71B	22.62B
	Total Debt
7.20B	7.60B	7.21B	7.86B	4.16B	4.16B
	Net Debt
5.67B	5.93B	5.03B	5.75B	1.57B	763.00M
	Total Liabilities
20.56B	20.23B	22.10B	20.07B	14.31B	13.63B
	Stockholders Equity
10.92B	10.27B	8.85B	8.97B	8.47B	8.06B
Cash Flow		Free Cash Flow
7.00M	279.00M	2.75B	1.05B	1.47B	2.15B
	Operating Cash Flow
1.21B	1.49B	3.97B	1.96B	2.26B	2.72B
	Investing Cash Flow
-1.62B	-1.78B	-1.64B	-4.17B	-873.00M	-719.00M
	Financing Cash Flow
-580.00M	-173.00M	-2.18B	1.67B	-2.23B	280.00M

Cummins Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 336.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMI, the sentiment is Positive. The current price of 336.65 is above the 20-day moving average (MA) of 306.94, above the 50-day MA of 307.20, and above the 200-day MA of 330.68, indicating a bullish trend. The MACD of 9.00 indicates Negative momentum. The RSI at 70.28 is Negative, neither overbought nor oversold. The STOCH value of 95.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CMI.

Cummins Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETN	81 Outperform	$128.77B	33.22	20.84%	1.17%	7.00%	16.84%
HWM	79 Outperform	$65.72B	53.08	28.29%	0.19%	10.01%	47.87%
DOV	77 Outperform	$25.60B	11.25	17.45%	1.10%	-5.86%	59.79%
PH	76 Outperform	$86.80B	26.19	27.16%	0.96%	-0.23%	22.41%
IR	76 Outperform	$33.71B	41.53	8.09%	0.10%	5.27%	0.61%
CMI	70 Outperform	$46.38B	16.64	27.78%	2.13%	-0.39%	47.31%
Sector *	64 Neutral	$4.44B	11.99	5.16%	249.23%	4.01%	-11.87%

Cummins Corporate Events

Cummins Holds Annual Shareholders Meeting on May 13

On May 13, 2025, Cummins Inc. held its annual shareholders meeting where key decisions were made, including the election of eleven directors for a one-year term, an advisory vote on executive compensation, and the ratification of PricewaterhouseCoopers LLP as auditors for 2025. A shareholder proposal for an independent board chairman was also voted on but did not pass. With approximately 85.7% of shares represented, these decisions reflect the company’s strategic direction and governance priorities, impacting its operational oversight and stakeholder engagement.

The most recent analyst rating on (CMI) stock is a Hold with a $385.00 price target. To see the full list of analyst forecasts on Cummins stock, see the CMI Stock Forecast page.

Spark’s Take on CMI Stock

According to Spark, TipRanks’ AI Analyst, CMI is a Outperform.

Cummins exhibits strong financial fundamentals with notable profitability and a balanced capital structure. However, recent declines in net profit margin and cash flow present challenges. The technical outlook is mixed, with potential overbought conditions. Valuation remains reasonable, and strategic initiatives, including the senior notes offering, bolster financial flexibility. Yet, economic uncertainties and trade tariffs pose significant risks.

To see Spark’s full report on CMI stock, click here.

Cummins Completes $2 Billion Senior Notes Offering

On May 9, 2025, Cummins Inc. completed a significant public offering of senior notes totaling $2 billion, with varying maturity dates in 2028, 2031, and 2035. This strategic financial move aims to support general corporate purposes, including refinancing existing debt, potentially enhancing the company’s financial flexibility and market positioning.

Spark’s Take on CMI Stock

According to Spark, TipRanks’ AI Analyst, CMI is a Neutral.

Cummins displays strong financial fundamentals and reasonable valuation, but faces challenges such as declining revenues and cash flow. While the technical outlook is mixed, strategic initiatives and a robust capital structure provide some stability, though economic uncertainties and trade tariffs remain significant risks.

To see Spark’s full report on CMI stock, click here.

Cummins Enters $2 Billion Senior Notes Agreement

On May 6, 2025, Cummins Inc. entered into an Underwriting Agreement with several financial institutions to sell $2 billion in senior notes, with varying maturity dates and interest rates, in a public offering expected to close on May 9, 2025. This move is part of Cummins’ strategy to raise capital, potentially impacting its financial structure and market positioning, while providing indemnification and contribution provisions to the underwriters against certain liabilities.

Spark’s Take on CMI Stock

According to Spark, TipRanks’ AI Analyst, CMI is a Neutral.

Cummins displays strong financial fundamentals and reasonable valuation, but faces challenges such as declining revenues and cash flow. While the technical outlook is mixed, strategic initiatives and a robust capital structure provide some stability, though economic uncertainties and trade tariffs remain significant risks.

To see Spark’s full report on CMI stock, click here.