Cummins (CMI) AI Stock Analysis

• Market Cap: $57.59B
• Dividend Yield: 1.78%
• Average Volume (3M): 809.78K
• Price to Earnings (P/E): 19.7
• Beta (1Y): 1.09
• Revenue Growth: -1.30%
• EPS Growth: 53.39%
• Country: US
• Employees: 69,600
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 6.43
• Shares Outstanding: 137,786,040
• 10 Day Avg. Volume: 998,698
• 30 Day Avg. Volume: 809,785
• PEG Ratio: 0.03
• Price to Book (P/B): 4.69
• Price to Sales (P/S): 1.41
• P/FCF Ratio: 172.68
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 6.02
• Enterprise Value/Ebitda: 9.52
• 1Y Price Target: $430.91
• Price Target Upside: 3.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 71 Outperform
• Price Target: $471.00 ▲(12.67% Upside)

Cummins' overall stock score reflects its strong financial stability and profitability, supported by robust cash flow and a solid balance sheet. The technical analysis indicates bullish momentum, though caution is advised due to overbought signals. Valuation is reasonable, with a supportive dividend policy. The earnings call provided a balanced view, with international growth offsetting domestic challenges.

Positive Factors

Strategic Partnerships

The partnership with Komatsu to develop hybrid powertrains for mining equipment enhances Cummins' market position in sustainable solutions, leveraging both companies' strengths to accelerate innovation in hybrid technology. This aligns with industry trends towards sustainability and could drive long-term growth.

International Revenue Growth

Growth in international markets, particularly in China, indicates Cummins' successful global expansion strategy. This diversification reduces dependence on the North American market, providing a buffer against regional downturns and supporting long-term revenue stability.

Strong Cash Generation

Significant improvement in free cash flow generation highlights Cummins' ability to efficiently convert sales into cash, enhancing financial flexibility. This strong cash position supports ongoing investments in innovation and strategic initiatives, crucial for sustaining competitive advantage.

Negative Factors

Decline in North American Revenues

The decline in North American revenues, particularly in truck volumes, poses a challenge to Cummins' overall growth. This trend reflects market saturation and economic headwinds, potentially impacting future revenue streams and necessitating strategic adjustments.

Impact of Tariffs

Tariff-related costs have adversely affected Cummins' profitability, highlighting the vulnerability to geopolitical factors. While efforts to achieve price-cost neutrality are underway, ongoing tariff impacts could strain margins and require strategic pricing adjustments.

Decreased Revenues in Key Segments

The decline in revenues from the Engine and Components segments indicates challenges in core business areas. This trend may reflect competitive pressures and demand shifts, necessitating innovation and adaptation to maintain market relevance and profitability.

Cummins Business Overview & Revenue Model

Company Description

Cummins Inc. (CMI) is a global leader in power solutions, specializing in the design, manufacturing, and distribution of engines, filtration, and power generation products. The company operates in several sectors, including automotive, industrial, marine, and power generation, providing a broad range of products such as diesel and natural gas engines, hybrid and electric power systems, and related components and services. With a focus on innovation and sustainability, Cummins works to meet the needs of various markets through advanced technologies and solutions.

How the Company Makes Money

Cummins generates revenue primarily through the sale of its engines and power generation equipment, as well as aftermarket parts and services. The company has several key revenue streams, including new engine sales, which account for a significant portion of its income, and parts sales, which provide ongoing revenue through maintenance and repair services. Additionally, Cummins has established strategic partnerships with original equipment manufacturers (OEMs) and other industry players to expand its market reach and enhance its product offerings. The company's focus on technological advancements, such as electric and hybrid power solutions, further positions it to capture emerging market opportunities and drive future growth.

Cummins Financial Statement Overview

Summary

Cummins demonstrates strong profitability and cash flow generation, although recent revenue decline and reduced margins pose challenges. The balance sheet remains robust with manageable leverage and strong equity returns. Overall, the company is financially stable but needs to address revenue growth issues.

Income Statement

Cummins shows a strong gross profit margin of 25.63% TTM, indicating efficient cost management. However, the net profit margin has decreased to 8.72% TTM, reflecting a decline in profitability. The revenue growth rate is negative at -45.2% TTM, which is concerning and suggests a significant drop in sales. EBIT and EBITDA margins have also decreased, indicating reduced operational efficiency.

Balance Sheet

The debt-to-equity ratio is 0.66 TTM, showing moderate leverage, which is manageable but has increased compared to previous years. Return on equity is strong at 27.17% TTM, indicating effective use of equity to generate profits. The equity ratio is stable, suggesting a solid financial structure.

Cash Flow

Free cash flow growth is impressive at 23,500% TTM, indicating a significant improvement in cash generation. The operating cash flow to net income ratio is 0.28 TTM, showing adequate cash flow relative to net income. The free cash flow to net income ratio is 0.58 TTM, reflecting good cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	33.72B	34.10B	34.06B	28.07B	24.02B	19.81B
Gross Profit	8.64B	8.44B	8.25B	6.72B	5.70B	4.89B
EBITDA	5.47B	6.34B	3.02B	3.80B	3.52B	3.11B
Net Income	2.94B	3.95B	735.00M	2.15B	2.13B	1.79B
Balance Sheet
Total Assets	34.26B	31.54B	32.01B	30.30B	23.71B	22.62B
Cash, Cash Equivalents and Short-Term Investments	3.07B	2.26B	2.74B	2.57B	3.19B	3.86B
Total Debt	8.68B	7.60B	7.21B	8.36B	4.61B	4.62B
Total Liabilities	21.39B	20.23B	22.10B	20.07B	14.31B	13.63B
Stockholders Equity	11.79B	10.27B	8.85B	8.97B	8.47B	8.06B
Cash Flow
Free Cash Flow	1.65B	279.00M	2.75B	1.05B	1.47B	2.15B
Operating Cash Flow	2.84B	1.49B	3.97B	1.96B	2.26B	2.72B
Investing Cash Flow	-1.59B	-1.78B	-1.64B	-4.17B	-873.00M	-719.00M
Financing Cash Flow	-556.00M	-173.00M	-2.18B	1.67B	-2.23B	280.00M

Cummins Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 418.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 418.04 is above the 20-day moving average (MA) of 409.79, above the 50-day MA of 392.09, and above the 200-day MA of 345.91, indicating a bullish trend. The MACD of 8.51 indicates Positive momentum. The RSI at 60.41 is Neutral, neither overbought nor oversold. The STOCH value of 35.56 is Neutral, 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
PH	79 Outperform	95.00B	27.47	25.81%	0.91%	-0.40%	24.40%
ETN	76 Outperform	142.32B	36.70	21.05%	1.11%	7.66%	9.19%
HWM	74 Outperform	77.86B	55.48	27.71%	0.21%	8.85%	51.50%
IR	73 Outperform	32.71B	62.85	5.18%	0.10%	4.67%	-36.65%
CMI	71 Outperform	$57.59B	19.66	27.56%	1.78%	-1.30%	53.39%
IEX	71 Outperform	12.15B	25.71	11.70%	1.74%	4.73%	-19.15%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Cummins Corporate Events

Cummins Appoints Matthew Tsien as New Director

On July 14, 2025, Cummins Inc. elected Matthew Tsien, a former executive at General Motors, as a director to serve until the next annual meeting of shareholders. Mr. Tsien, deemed independent by the board, will join the Audit, Safety, Environment and Technology, and Governance and Nominating Committees, participating in the company’s standard non-employee director compensation policies.

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.

Cummins Secures $2 Billion Credit Agreements with JPMorgan

On June 2, 2025, Cummins Inc. entered into two significant credit agreements with JPMorgan Chase Bank, N.A., allowing for up to $2 billion in revolving and swingline loans under each agreement. These agreements, a 5-Year Credit Agreement maturing in 2030 and a 3-Year Credit Agreement maturing in 2028, replace previous agreements and include options for incremental term loans. The arrangements are unsecured, with interest rates varying based on loan type and credit ratings, and contain customary financial covenants.

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.

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.