Cummins Valuation
| CMI Stock | USD 660.75 3.82 0.58% |
Above Model Estimate
Today
Current trading conditions suggest that Cummins' price fluctuation is Very Low right now. For valuation purposes, Macroaxis measures Cummins over a 3 months time horizon. Using a longer horizon generally improves the accuracy of the calculation.
Value Estimates Divergence
Cummins is trading at $660.75 versus a model-derived intrinsic value estimate of $442.74 per share, reading as above model estimate. For Cummins, the key valuation inputs are a profit margin of 8.87% and a return on equity of 24%, with an added check on Probability Of Bankruptcy. Like most valuation signals, this one reflects the idea that market price and underlying value can eventually converge.| Historical | Market 660.75 | Intrinsic 442.74 | Target 643.36 | Sentiment 661.21 | Naive 651.24 | DCF 208.34 |
The intrinsic value estimate of Cummins stock captures the present value of expected future earnings and cash generation. The estimate depends on Cummins' margin trajectory, reinvestment rate, and cost of capital.
Both the upside potential and the downside risk of Cummins factor into a balanced assessment. The upside estimate depends on how quickly current margin or earnings headwinds resolve, while the downside reflects what happens if they persist.
The most reliable valuation for Cummins emerges when intrinsic-value models and market multiples point in the same direction. Some managers use Cummins' intrinsic value based on ongoing forecasts of Cummins' financial statements.
Main Profitability Drivers
Cummins reports a net profit margin of 8.87% alongside an operating margin of 12.00%. A 3.13-point margin gap suggests that below-the-line items meaningfully affect Cummins' net profitability. Cummins' revenue base of 33.67 Billion yielded 8.67 Billion in gross profit at a 25.8% gross margin, while net income came in at 2.84 Billion. At 24.00% ROE and 8.78% ROA, Cummins' efficiency metrics offer insight into capital and asset utilization. Across the profitability spectrum, Cummins is demonstrating constructive momentum in its margin and return metrics. To dig further into these trends, see Cummins' detailed margin analysis to evaluate margin sustainability.
Price Book 7.3549 | Gross Profit | Price Sales 2.6975 | Profit Margin | Enterprise Value Revenue 2.8313 |
Cummins Cash | 2.99 Billion |
Cash stood at 2.85 Billion as of December 31, 2025.
Revenue by Product
Cummins reports income from 5 product segments. Distribution accounts for approximately 31.6% of Cummins' revenue at 3.29 Billion, while Engine contributes 25.0% at 2.6 Billion. No single product line dominates, which gives Cummins' revenue profile a degree of built-in diversification.Cummins is an industrial equipment manufacturer where revenue is driven by capital investment cycles and equipment demand, which directly shapes its valuation profile and margin structure. Classified as a moderate-growth stock in Machinery, its valuation multiples suggest steady earnings expectations without aggressive growth pricing. Enterprise value, leverage, and operating performance are compared below to identify where current pricing aligns with fundamentals and where it diverges.
Total Value Analysis
The current total-value analysis for Cummins points to enterprise value near 95.33 B, market capitalization around 90.83 B, debt of 8.11 B, and cash and liquid equivalents of 2.17 B as of latest reporting. Enterprise value captures what an acquirer would pay for the operating business, making it more useful than market cap alone when debt is material.| Takeover Price | Market Cap | Debt Obligations | Cash & Equivalents |
95.33 B | 90.83 B | 8.11 B | 2.17 B |
Investor Information
About 88.0% of the company shares are held by institutions such as insurance companies. The company has Price/Earnings To Growth (PEG) ratio of 1.8. Cummins recorded earnings per share (EPS) of 20.5. The company had its last dividend issued on the 20th of February 2026. The firm completed a 2:1 stock split on 3rd of January 2008. Cummins financial framework combines liquidity support with stable financial positioning. Asset-level profitability holds steady, reflecting balanced cost management and revenue retention.| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Operating Profit Margin | 0.12 | 0.1187 |
|
| |||||
| Total Cash From Operating Activities | 3.8 B | 3.6 B |
|
| |||||
| Operating Income | 4.2 B | 4 B |
|
|
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Cummins has an asset utilization ratio of 99.05 percent. This signifies that the Company is making $0.99 for each dollar of assets. An increasing asset utilization means that Cummins is more efficient with each dollar of assets it utilizes for everyday operations.Macro event markers
Discounted Cash Flow Analysis
Using the current custom levered DCF inputs, Cummins is worth about 208.34 per share while the market is pricing it near 660.75. Relative to the modeled value, the stock sits roughly 68.5% higher. Current assumptions include 8.78% WACC, 2.0% perpetual growth, and about 2.53 Billion of next-period free cash flow. Discounted forecast cash flows sum to about 9.65 Billion before the terminal component, and present terminal value still represents roughly 71.8% of enterprise value.Model Value / Share
208.34
Equity value per share from the current custom levered DCF summary row.
Market Price
660.75
Current market price used by the same scenario.
Model Premium
68.5%
Market price sits above the model output.
WACC / LT Growth
8.78% / 2.0%
Forecast horizon: 2021 to 2030Terminal value share of EV: 71.8%
Cummins Market Price vs. Intrinsic Value
This chart compares observed market pricing with the model-derived equity value per share across forecast periods. It also illustrates the relative premium or discount, expressed as a percentage difference between market valuation and modeled intrinsic value.
Projected Revenue and Levered Free Cash Flow
Revenue and levered free cash flow projections are presented in billions, outlining the expected financial trajectory over the modeled horizon.
Key Model Assumptions
The inputs below reflect the core assumptions applied in the valuation model, including growth expectations, discount rates, and capital structure considerations.
| Input | Current Value |
|---|---|
| Weighted Average Cost of Capital | 8.78% |
| Long-Term Growth Rate | 2.0% |
| Cost of Equity | 9.30% |
| After-Tax Cost of Debt | 2.91% |
| Debt Weighting | 8.13% |
| Equity Weighting | 91.87% |
| Net Debt | 5.27 Billion |
| Enterprise Value | 34.17 Billion |
| Present Terminal Value | 24.52 Billion |
| Terminal Value Share of EV | 71.8% |
Forecast Detail and Valuation Progression
This table presents the underlying forecast data used in the valuation, including revenue, cash flow generation, discounting effects, and the resulting per-share value across each projected period.
| Year | Revenue | Revenue Growth | Free Cash Flow | PV of LFCF | Equity Value / Share |
|---|---|---|---|---|---|
| 2021 | 24.02 Billion | 0.00% | 1.47 Billion | 0.0 | 208.15 |
| 2022 | 28.07 Billion | 16.87% | 1.05 Billion | 0.0 | 208.18 |
| 2023 | 34.06 Billion | 21.34% | 2.75 Billion | 0.0 | 209.01 |
| 2024 | 34.1 Billion | 0.11% | 279 Million | 0.0 | 208.07 |
| 2025 | 33.67 Billion | -1.27% | 2.39 Billion | 0.0 | 208.30 |
| 2026 | 33.55 Billion | -0.34% | 2.45 Billion | 2.26 Billion | 208.34 |
| 2027 | 33.52 Billion | -0.09% | 2.46 Billion | 2.08 Billion | 208.34 |
| 2028 | 33.51 Billion | -0.03% | 2.47 Billion | 1.92 Billion | 208.34 |
| 2029 | 33.51 Billion | -0.01% | 2.47 Billion | 1.77 Billion | 208.34 |
| 2030 | 33.51 Billion | -0.00% | 2.48 Billion | 1.63 Billion | 208.34 |
Profitability Analysis
Based on Cummins' financial statements, Cummins is profitable with a net margin of 8.87% and operating margin of 12.0%, reporting net income of 2.84 Billion. Return on equity stands at 24.0%. Profitability trends are broadly favorable, with a majority of key metrics improving year over year.Net Income | First Reported 1985-09-30 | Previous Quarter 536 M | Current Value 593 M | Quarterly Volatility 310.5 M |
Macro event markers
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Profit Margin | 0.26 | 0.2529 |
|
| |||||
| Net Profit Margin | 0.0887 | 0.0844 |
|
| |||||
| Operating Profit Margin | 0.12 | 0.1187 |
|
| |||||
| Pretax Profit Margin | 0.12 | 0.1177 |
|
| |||||
| Return On Assets | 0.0878 | 0.0836 |
|
| |||||
| Return On Equity | 0.24 | 0.2302 |
|
|
Profitability for Cummins depends on margin structure, capital efficiency, and cost control. Net margin of 8.87% is adequate, though not at levels that typically signal strong pricing power. The ratios below show whether current profitability is durable, improving, or under pressure. Cummins reports return on equity of 24.0%, above the level typically associated with durable competitive advantages.
Earnings per Share Projection vs Actual
EPS projections for Cummins aggregate analyst models into a benchmark against which actual results are measured. Return on equity of 23.93% provides context for how efficiently Cummins generates earnings from shareholder capital. The gap between Cummins' EPS and free cash flow per share signals how much of reported earnings converts to cash. Cummins' EPS estimates are updated as new analyst reports and company disclosures become available. Projected earnings per share for Cummins anchor the market's pricing of near-term earnings power. Consensus estimates may not capture non-recurring items or stock-compensation effects, so testing against the current net margin profile (8.87%), guidance revisions, and prior forecast error adds precision. Cummins reported estimated earnings of 5.63 in earnings per share on 31st of March 2026. This estimate serves as the benchmark against which the next reported result will be judged by the market.Macro event markers
Earnings Estimation Breakdown
23 analysts contribute to the current consensus. The last reported EPS was 4.27 as of 31st of December 2025.
Last Reported EPS
4.95
Lowest
5.63
Expected EPS
6.07
Highest
Analyst estimate range around the current expected EPS projection.
Earnings Projection Consensus
| Number of Analysts | Historical Accuracy | Last Reported EPS | Estimated EPS for 31st of March 2026 | Current EPS (TTM) | |
| 23 | 85.36% | 4.27 | 5.63 | 20.50 |
Ownership Allocation
The majority of Cummins' outstanding shares are owned by institutional investors. Large asset managers, pension funds, and sovereign wealth funds that invest on behalf of clients or beneficiaries are typically subject to stricter disclosure rules than retail investors - including mandatory 13F filings that reveal quarterly position changes. Tracking these filings can highlight shifts in institutional conviction around Cummins.Revenue and Profit Overview
The company reported last year's revenue of 33.67 B. Total Income to common stockholders was 2.84 B with profit before taxes, overhead, and interest of 8.67 B.Historical Cash Distributions
the Stock dividend payments may indicate management's confidence in long-term earnings stability. Dividend distributions may be easier to sustain when companies maintain strong liquidity positions. For a deeper review of payout history, readers may see how the Stock distributes income.
Reading the Current Signals
Valuation at 18.7 times earnings is consistent with what industrial and manufacturing companies have commanded in recent periods, where pricing power is anchored to its order-driven industrial model. For industrial and manufacturing companies, the earnings multiple reflects operating economics and cost structure more than top-line growth alone. Margins of 8.87% are adequate but not exceptional - competitive dynamics or cost shifts in either direction could move the profitability picture meaningfully. The profitability structure reflects how the business generates and retains revenue - distinct from many peers in Machinery. Leverage is moderate at 0.91, broadly consistent with norms in Machinery and manageable under current conditions. The 24.0% return on equity indicates efficient use of shareholder capital, a metric that typically correlates with durable competitive positioning in Machinery. Current pricing embeds an expectation of steady earnings performance roughly in line with historical trends. A shift in order flow, operational efficiency, and their translation into sustained earnings would alter the balance between what the market has priced in and what ultimately materializes.
Overall Interpretation
Across the key valuation dimensions, Cummins presents a moderately profitable business where earnings are shaped by operating scale and the underlying cost structure within Machinery. The earnings and capital-return profile places the company within the mid-range of its peer group, with performance that supports but does not clearly exceed current valuation levels. On balance, Cummins is a fundamentally strong business whose premium valuation is backed by the underlying economics. Whether that premium expands depends on order flow, operational efficiency, and their translation into sustained earnings.
Each of the valuation dimensions above captures a different angle on Cummins, and their combined signal matters more than any single metric. Given the current mix of multiples, margins, and leverage, the valuation picture is most useful when tracked over time rather than read as a static conclusion.
Valuation Framework, Methodology & Assumptions
Cummins is a large-cap equity in Construction Machinery & Heavy Transportation Equipment, Specialty Industrial Machinery, Industrials categories. Revenue consistency stabilizes valuation context. Current valuation multiples for Cummins include enterprise value of 95.33 B, P/E of 18.7.
Cummins metrics are compiled from periodic company reporting and market reference feeds and normalized before display. Professional analyst research is incorporated when coverage is available. Valuation outputs are model-derived and depend on published assumptions and reference inputs.
The analysis above is generated by quantitative models and is provided for informational and educational purposes only. It does not constitute financial advice, investment recommendations, or an endorsement to buy or sell any security. All investing involves risk, including the possible loss of principal. Consult a qualified financial advisor before making investment decisions. See our Terms of Use for full details.
Financial data referenced in this analysis is derived from publicly available SEC filings, audited financial statements, and third-party market data providers. The intrinsic value estimate is generated by Macroaxis quantitative models that incorporate fundamental analysis, technical indicators, and risk metrics.
The methodology combines multiple analytical inputs:
- Fundamental analysis - financial statements, profitability ratios, debt structure, and cash flow metrics sourced from SEC filings and public financial reports
- Technical indicators - historical price patterns, momentum signals, and volatility measures
- Risk assessment - probability of bankruptcy models, market risk metrics, and downside scenario analysis
- Peer comparison - relative valuation against industry peers using standardized multiples
Model outputs are refreshed periodically as new financial data becomes available. Past model performance is not indicative of future results. The intrinsic value estimate reflects a point-in-time calculation and should be considered alongside other research and professional advice.
Data sourced from SEC filings (EDGAR), public financial statements, and market data providers.
Editorial review and methodology oversight provided by: Gabriel Shpitalnik, Member of Macroaxis Editorial Board
Growth Indicators
Growth-focused analysis of Cummins matters because high expectations can support outsized upside but also sharper repricing when execution slips. A disciplined growth review keeps upside potential and expectation risk visible at the same time.
| Common Stock Shares Outstanding | 138.7 M | |
| Quarterly Earnings Growth Y O Y | 41.40% | |
| Forward Price Earnings | 25.1889 |
Cummins Current Valuation Indicators
Valuation of Cummins is strongest when several lenses are used together: market cap, enterprise value. revenue, and cash-flow durability. Current market capitalization is about 90.83 Billion, enterprise value is near 95.33 Billion, and annual revenue is around 33.67 Billion. Reported values are derived from company filings, audited financial statements, and market data, and are standardized within Macroaxis quantitative models for consistency. Model outputs reflect a point-in-time estimate based on available data and assumptions and should be interpreted alongside changes in operating performance, market conditions, and forward expectations.