QualityDipStocks / Industrials · Industrial machinery
Cummins CMI
In a deep dip: 31% below its 52-week high.
A quality company trading near our fair value estimate, 10% under its Market Value.
- Fair value est.
- $462.52−8%
- Market Value
- $553.02price −10%
- Off 52-wk high
- −31%
- Risk vs market
- Highbeta 1.64
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $500.09
- 52-wk lowlowest close, 1 year$428.74−14.3%
- Fair value est.base case$462.52−7.5%
- PriceFri Oct 30 close$500.09you are here
- Market Valueavg paid since Aug 4$553.02+10.6%
- 52-wk highhighest close, 1 year$727.59+45.5%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 6.2% ±2 points. Bear = 10.5% and 4.2%; bull = 8.5% and 8.2% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
What the price implies To be worth today’s price, CMI’s free cash flow would need to grow about 8% a year for five years; our estimate uses 6%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much CMI moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Swings much more than the market, and its own price swings are 2.8× the S&P 500’s.
- Beta vs S&P 500
- 1.64
- Volatility
- 36% vs 13% SPY
- Correlation SPY
- 0.58
- Correlation QQQ
- 0.56
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
Cash returnsFree cash flow grew 104% over the last 12 months vs the 12 months before.
ProfitabilityOperating margin widened to 12.0% in FY2025 from 5.2% in FY2023 (SEC filings).
ProfitabilityReturn on equity of 22% over the last 12 months, up 15 points in two years.
ValuationTrades 9.6% below its Market Value of $553.02, the average price paid since the Aug 4 filing.
TechnicalA company that passes our quality screen, now 31% off its 52-week high (deep dip).
Top bearish points 5 of 5
GrowthDiluted EPS fell 28% to $20.50 in FY2025.
GrowthSales grew 2.9% over the last 12 months, below the 9.3% median for the 147 Industrials companies we cover.
ProfitabilityGross margin of 25%, below the 35% median for the 114 Industrials companies we cover.
RiskReports earnings Nov 5 (consensus EPS $8.38): results can move the price sharply and reset Market Value.
RiskSwings hard: beta 1.64 vs the S&P 500 and 36% yearly volatility (SPY 13%).
Who’s talking about it
Notable investors, executives, analysts and public figures on Cummins in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Industrial machinery
All fundamentals
P/E 25.5 · FCF yield 4.9% · ROE 22%
Valuation
- P/E
- 25.5×3-yr-end avg 27.9× · Industrials median 27.5×
- Price / FCF
- 20.6×
- FCF yield
- 4.9%
- EV / EBITDA
- 14.4×
- Price / sales
- 2.00×
- Price / book
- 5.39×
- Market cap
- $69.3Bprice × diluted shares
- Enterprise value
- $72.4B
Growth
- Revenue, 12 months
- $34.7B
- Sales growth, 12 months
- +2.9%vs the 12 months before
- Sales growth, 3 yrs
- +6.2%/yrfrom FY2022
- Diluted EPS, 12 months
- $19.56
- EPS growth, last FY
- −27.7%
- Net income, 12 months
- $2.7B
- Net income growth
- −8%12 months vs before
Profitability
- Gross margin
- 25.3%
- Operating margin
- 11.2%
- Net margin
- 7.8%
- FCF margin
- 9.7%
- Return on equity
- 22%
- Return on invested capital
- 18%
Balance sheet
- Cash & short-term inv.
- $3.9B
- Total debt
- $7.1B
- Net cash
- −$3.2B
- Debt / equity
- 0.55×
- Interest coverage
- 12.1×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $3.4B
- FCF growth, 12 months
- +104%
- Dividend yield
- 1.60%$1.1B paid
- Payout ratio
- 41%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- 0.0%diluted shares vs a year ago
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From Cummins’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $462.52 · MV $553.02 · FCF value $590.92
Assumes 6.2% growth for 5 years (revenue grew 6.2% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $24.31 a share (trailing 12 months to Jun 30, 2026), from the 10-Q filed Aug 4, 2026. Net cash $3.4B, not added.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. We watch it daily for our three reversal signal rules while it sits in a dip.
Momentum & 52-week range
RSI 36 · 5 days −3.3%
The business
FCF $3.4B · Sales +3%
- Free cash flow, 12 months$3.4B
- Free-cash-flow yield4.7%
- Free-cash-flow margin10%
- Gross margin25%
- Operating margin11%
- Return on invested capital14%
- Return on equity23%
- Sales growth (latest quarter vs year-ago quarter)+3%
- Net debt / EBITDA1.1×
Next report
Nov 5
- DateThu Nov 5, before the open
- Consensus EPS$8.38
- Year-ago EPS$5.59
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when CMI fires a reversal signal
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