Cummins Inc

Industrials
Industrial Machinery/Components
www.cummins.com

Earnings Score
Moat Score
Safety Score

Market Cap $52.67B
PE 25
Debt $8.24B
Cash $1.73B
EV $59.18B
FCF $337.00M

Earnings

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Sales & Net Margins

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Earnings	$2.10B
EBIT	$3.03B
ROE	18%
ROA	9%
FCF	$337.00M
Equity	$11.34B
Growth Stability	36%
PE	25.12
PEG	-29.62
PB	4.64
P/FCF	156.29
P/S	1.54
Price/Cash	0.03
Debt/Equity	0.73
Debt/FCF	24.45
Net Margins	14%
Gross Margins	25%
Op. Margins	9%
Earnings CAGR	6%
Sales Growth YoY	0%
Sales Growth QoQ	-4%
Sales CAGR	7%
FCF CAGR	-2%
Equity CAGR	4%
Earnings Stability	0.22
Earnings Growth YoY	23%
Earnings Growth QoQ	11%
Earnings CAGR 5Y	-1%

Sales CAGR 5Y	13%
FCF CAGR 5Y	-15%
Equity CAGR 5Y	7%
Earnings CAGR 3Y	17%
Sales CAGR 3Y	17%
FCF CAGR 3Y	-8%
Equity CAGR 3Y	6%
Market Cap	$52.67B
Revenue	$34.20B
Dividend Yield	2%
Payout Ratio	46%
Assets	$32.05B
Total Debt	$8.24B
Cash	$1.73B
Shares Outstanding	137.18M
EV	59.18B
Earnings Score	10%
Moat Score	93%
Safety Score	45%
Final Score	49%
Working Capital	3.71B
Current Ratio	1.32
Gross Profit	$8.41B
Shares Growth 3y	-1%
Equity Growth QoQ	7%
Equity Growth YoY	-3%

Assets & ROA

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Stockholders Equity & ROE

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Cummins is the top manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, in addition to standby and prime power generators. The company also sells powertrain components, which include filtration products, transmissions, turbochargers, aftertreatment systems, and fuel systems. Cummins is in the unique position of competing with its primary customers, heavy-duty truck manufacturers, who make and aggressively market their own engines. Despite robust competition across all its segments and increasing government regulation of diesel emissions, Cummins has maintained its leadership position in the industry.

SEC Filings

Direct access to Cummins Inc (CMI) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Cummins Inc compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Cummins Inc compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 6%

Stability 22%

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Cummins Inc Discounted Cash Flow

Fully customizable DCF calculator online for Cummins Inc.

Years

Calculation mode

= $2.9B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$337M	$330M	$323M	$317M	$310M	$304M	$298M	$292M	$286M	$280M	$274M	$2.7B
DCF		$300M	$267M	$238M	$212M	$189M	$168M	$150M	$133M	$119M	$106M	$1.1B
Value	$2.9B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Net Margins	9%	7%	8%	5%	9%	10%	9%	9%	8%	2%	14%
ROA	-	14%	13%	13%	15%	14%	10%	12%	10%	6%	9%
ROE	-	18%	19%	12%	26%	27%	20%	23%	22%	7%	18%

Good Net Margins (13.75%)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	1.28	1.35	1.17	1.51	0.97	1.93	2.77	8.06	2.48	24.45
Debt over Equity	0.22	0.22	0.26	0.25	0.31	0.28	0.47	0.45	0.85	0.69	0.73
Growth Stability	-	-	-	67%	100%	100%	99%	100%	100%	36%	36%

Bad Debt/FCF ratio (24.45)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Good Debt/Equity ratio (0.73)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (36%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	-1%	-8%	17%	16%	-1%	-16%	21%	17%	21%	13%
Earnings YoY growth	-	-15%	-0%	-29%	115%	6%	-21%	19%	1%	-66%	-1%
Equity YoY growth	-	-4%	-7%	14%	1%	2%	6%	5%	6%	-1%	7%
FCF YoY growth	-	-14%	7%	26%	-6%	49%	-12%	-31%	-31%	163%	-15%