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Cummins (CMI)
NYSE:CMI
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Cummins (CMI) AI Stock Analysis

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CMI

Cummins

(NYSE:CMI)

Rating:77Outperform
Price Target:
$439.00
â–²(11.95% Upside)
Cummins' strong financial performance and technical indicators are the primary drivers of its stock score. The company shows robust profitability and cash flow, supported by strong technical momentum. However, challenges in revenue growth and market conditions, particularly in North America, present risks. The valuation is stable but not compelling, and while the earnings call provided positive insights, it also highlighted significant challenges.
Positive Factors
Earnings and Revenue
CMI posted record earnings with outstanding results from Power Systems and Distribution, driven by increasing data center sales.
Market Position
CMI is well-positioned with improved margins, increased data center exposure, and leverage to a potential truck market upcycle.
Negative Factors
Guidance and Outlook
CMI withdrew its fiscal year outlook due to growing economic uncertainty, overshadowing its strong performance.
Tariff Impact
There is a possibility that not all of the tariff impact will be passed through in the near term due to the fluid nature of tariffs.

Cummins (CMI) vs. SPDR S&P 500 ETF (SPY)

Cummins Business Overview & Revenue Model

Company DescriptionCummins 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 MoneyCummins 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 Key Performance Indicators (KPIs)

Any
Any
Sales by Segment
Sales by Segment
Shows sales figures for each business segment, offering a view into which parts of Cummins' business are driving revenue and how diversified its income streams are.
Chart InsightsCummins' Distribution and Power Systems segments are driving growth, with record performances offsetting declines in North American truck volumes. Despite a 2% revenue dip in Q2 2025, EBITDA improved significantly due to strong demand in Power Generation and operational efficiencies. International growth, particularly in China, is a bright spot amid North American challenges. The company's strategic focus on diversification and operational improvements, alongside a 10% dividend increase, underscores resilience despite tariff impacts and regulatory uncertainties.
Data provided by:Main Street Data

Cummins Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the Distribution and Power Systems segments and international markets, with significant profitability improvements. However, these were offset by notable challenges in the North American truck market, declining revenues in key segments, and the negative impact of tariffs. The positive aspects were balanced by the negative trends, leading to a neutral overall sentiment.
Q2-2025 Updates
Positive Updates
Record Performance in Distribution and Power Systems Segments
Despite a 30% decline in North America truck volumes, Cummins achieved record financial performance in the Distribution and Power Systems segments, leading to a 310 basis points increase in EBITDA year-over-year.
Introduction of New Power Systems Product
Cummins introduced a new 17-liter engine platform generator in the Power Systems segment, capable of producing up to 1 megawatt of power, targeting critical market segments.
Increase in Quarterly Dividend
Cummins announced a 10% increase in its quarterly dividend, from $1.82 to $2 per share, marking the 16th consecutive year of dividend increases.
International Revenue Growth
International revenues increased by 5% in the second quarter of 2025, with notable growth in China, where revenues rose by 9% due to increased data center demand and government stimulus.
Strong Profitability and Operational Efficiency
EBITDA for the second quarter was $1.6 billion or 18.4% of sales, up from $1.3 billion or 15.3% a year ago, driven by operational efficiencies and strong demand in Power Generation.
Negative Updates
Decline in North America Revenues
Revenues in North America decreased by 6% compared to the previous year, with heavy-duty truck volumes down 29% and medium-duty truck volumes down 35%.
Impact of Tariffs
Tariff costs negatively impacted profitability, with a $22 million negative impact in the second quarter. Cummins anticipates becoming price/cost neutral on tariffs by the fourth quarter.
Challenges in North America Truck Market
The North America truck market faces significant challenges, with heavy- and medium-duty truck volumes expected to decline by 25% to 30% in the third quarter due to multiyear lows in orders.
Decreased Revenues in Engine and Components Segments
Engine segment revenues decreased by 8%, and Components revenue decreased by 9% from a year ago, primarily due to weaker North American truck volumes.
Company Guidance
During the second quarter of 2025 earnings call, Cummins Inc. provided guidance indicating a mix of robust performance in certain segments alongside challenges in others. The company achieved record profitability in its Distribution and Power Systems segments, leading to an EBITDA increase of 310 basis points year-over-year despite a 30% decline in North American truck volumes. Revenues totaled $8.6 billion, a slight decrease of 2% from the previous year, with North American revenues down 6% and international revenues up 5%. The Power Systems segment saw a 19% revenue increase, driven by high demand in data centers, while the Engine segment and Components segment faced declines due to weaker North American truck markets. Despite these challenges, Cummins increased its quarterly dividend by 10% and returned $251 million to shareholders. Looking ahead, the company anticipates continued strength in Power Generation and international markets but expects further declines in North American truck volumes by 25% to 30% in the third quarter. Cummins is navigating tariff impacts, aiming to achieve price-cost neutrality by the fourth quarter, while maintaining focus on operational efficiencies and strategic investments to position for market recovery.

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
75
Positive
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
70
Positive
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
80
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue33.72B34.10B34.06B28.07B24.02B19.81B
Gross Profit8.64B8.44B8.25B6.72B5.70B4.89B
EBITDA5.47B6.34B3.02B3.80B3.52B3.11B
Net Income2.94B3.95B735.00M2.15B2.13B1.79B
Balance Sheet
Total Assets34.26B31.54B32.01B30.30B23.71B22.62B
Cash, Cash Equivalents and Short-Term Investments3.07B2.26B2.74B2.57B3.19B3.86B
Total Debt8.68B7.60B7.21B8.36B4.61B4.62B
Total Liabilities21.39B20.23B22.10B20.07B14.31B13.63B
Stockholders Equity11.79B10.27B8.85B8.97B8.47B8.06B
Cash Flow
Free Cash Flow1.65B279.00M2.75B1.05B1.47B2.15B
Operating Cash Flow2.84B1.49B3.97B1.96B2.26B2.72B
Investing Cash Flow-1.59B-1.78B-1.64B-4.17B-873.00M-719.00M
Financing Cash Flow-556.00M-173.00M-2.18B1.67B-2.23B280.00M

Cummins Technical Analysis

Technical Analysis Sentiment
Positive
Last Price392.13
Price Trends
50DMA
366.14
Positive
100DMA
337.47
Positive
200DMA
342.07
Positive
Market Momentum
MACD
8.84
Positive
RSI
62.31
Neutral
STOCH
37.45
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 392.13 is below the 20-day moving average (MA) of 396.48, above the 50-day MA of 366.14, and above the 200-day MA of 342.07, indicating a bullish trend. The MACD of 8.84 indicates Positive momentum. The RSI at 62.31 is Neutral, neither overbought nor oversold. The STOCH value of 37.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CMI.

Cummins Risk Analysis

Cummins disclosed 31 risk factors in its most recent earnings report. Cummins reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Cummins Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$95.00B27.6527.42%0.92%-0.40%24.40%
77
Outperform
$54.46B18.5927.56%1.86%-1.30%53.39%
76
Outperform
$135.92B34.5820.76%1.17%7.66%9.19%
74
Outperform
$70.18B50.6229.98%0.23%8.85%51.50%
71
Outperform
$12.21B26.1712.25%1.74%4.73%-19.15%
67
Neutral
$30.98B60.855.21%0.10%4.67%-36.65%
64
Neutral
$10.73B15.657.58%2.01%2.80%-14.92%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CMI
Cummins
400.93
113.66
39.57%
ETN
Eaton
348.22
66.89
23.78%
IEX
IDEX
164.86
-27.56
-14.32%
PH
Parker Hannifin
756.96
191.28
33.81%
HWM
Howmet Aerospace
179.53
88.35
96.90%
IR
Ingersoll Rand
79.20
-7.56
-8.71%

Cummins Corporate Events

Executive/Board Changes
Cummins Appoints Matthew Tsien as New Director
Neutral
Jul 14, 2025

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.

Private Placements and Financing
Cummins Secures $2 Billion Credit Agreements with JPMorgan
Neutral
Jun 2, 2025

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.

Executive/Board ChangesShareholder Meetings
Cummins Holds Annual Shareholders Meeting on May 13
Neutral
May 15, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 11, 2025