CUMMINS INC (CMI)

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AI: Overvalued

Price checkStrong growth is already priced in, leaving little protection against an ordinary slowdown.

At $631.26, the August 14 close, Cummins’ stock-market value is roughly $87 billion using about 138 million diluted shares. The price equals 30.8 times 2025 reported earnings of $20.50 a share, 26.5 times the $23.78 figure after adding back the main Accelera charge, and about 21.5 times analysts’ August 1 average estimate of $29.30 for 2026. Even that forward measure assumes the raised outlook delivers. This demanding valuation supports an Overvalued verdict.

Big pictureCummins earns through cycles, but cash generation and reported profit remain uneven.

Revenue rose from $19.8 billion in 2020 to $33.7 billion in 2025, although 2025 sales slipped 1%. Cash left after running and investing in the business varied sharply: about $0.28 billion in 2024 versus $2.39 billion in 2025, with a six-year average near $1.70 billion. First-half 2026 improved to $1.37 billion. Reported earnings were also distorted by a $1.3 billion Atmus gain in 2024 and a $458 million Accelera charge in 2025, complicating simple year-to-year comparisons.

Business strengthThe balance sheet is sound, and buybacks have reduced each remaining shareholder’s dilution risk.

At June 2026, Cummins held $3.18 billion of cash against $7.09 billion of debt, leaving $3.91 billion of net debt. Current assets were 1.73 times current liabilities, providing reasonable short-term protection. Inferred diluted shares declined from about 149 million in 2020 to 139 million in 2025, while stock compensation remained modest at $93 million. Buybacks resumed at $468 million during first-half 2026 alongside $552 million of dividends. Debt is manageable, but these payments and rising capacity investment still compete for operating cash.

What could change the storyData-center power offers substantial upside, while truck cyclicality could expose the rich valuation.

The bull case strengthened when second-quarter Power Systems sales rose 19% to $2.3 billion and its profit margin reached 24.5%, driven largely by power-generation demand. Management now expects 2026 revenue growth of 10% to 13% and a profit margin of 18.0% to 18.5%. The bear signal is that Engine and Components margins fell to 12.5% and 13.2%. At $631, an 18-times earnings valuation requires roughly $35 per share, 19% above analysts’ $29.30 estimate, plus sustained cash flow and successful truck-market recovery.

$631.26 price considered

AI: News

Outlook raised againRecord results raised expectations, yet the shares fell as investors weighed how much growth was already priced.

On August 4, Cummins reported record quarterly revenue of $9.46 billion, up 9%, and diluted earnings of $6.73 a share. It raised 2026 revenue-growth guidance to 10%–13% and its expected profit margin to 18.0%–18.5%, citing trucks, Chinese construction, and power generation. Shares nevertheless closed 2.0% lower that day. That timing does not establish causation; the decline may indicate that investors had already expected strong results.

Engine rollout phasedCummins slowed its new-engine rollout, reducing transition risk while relying on proposed regulatory flexibility.

On July 23, Cummins said limited production of its new X15 and X10 engines would begin in January 2027, with full production expected in the fourth and third quarters respectively. Existing engines will remain available during the transition. The plan could lower factory and customer disruption by avoiding an abrupt replacement cycle. However, it relies on flexibility contained in a proposed Environmental Protection Agency rule; launch timing may change if the final regulation differs materially.

Data-center power agreementA Texas data-center agreement expanded Cummins beyond backup power, but the contract value remains undisclosed.

On June 16, Cummins announced an agreement to supply natural-gas generators and technical support for Circe Energy’s Texas computing campuses, with deliveries scheduled from 2026 through 2030 and phased energization beginning in 2027. The generators would provide primary on-site power rather than merely emergency backup, broadening the revenue opportunity and potential service work. Shares rose 3.0% that day, although timing alone cannot prove the announcement caused the move. Neither capacity nor contract value was disclosed by Cummins.

Higher 2030 targetsManagement raised long-term targets, increasing upside potential while making today’s valuation more demanding.

At its May 21 analyst day, Cummins raised its 2030 ambition to $45–$50 billion of revenue and a profit margin above 20%, supported by data centers, mining, aftermarket growth, and expanded large-engine capacity. The shares fell 4.6% that day. Contemporary reporting also cited a trade-secret verdict, a financing registration, an analyst downgrade, and insider selling, so the market decline cannot be attributed confidently to the targets. Delivering those goals is increasingly important to justify the current price.

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Free cash flow

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Total cash / debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008	2007
Revenue	$33.67B	$34.10B	$34.06B	$28.07B	$24.02B	$19.81B	$23.57B	$23.77B	$20.43B	$17.51B	$19.11B	$19.22B	$17.30B	$17.33B	$18.05B	$13.23B	$10.80B	$14.34B	$13.05B
Gross profit	$8.52B	$8.44B	$8.25B	$6.72B	$5.70B	$4.89B	$5.98B	$5.74B	$5.10B	$4.46B	$4.95B	$4.86B	$4.28B	$4.42B	$4.59B	$3.17B	$2.17B	$2.94B	$2.56B
Research & development	$1.40B	$1.46B	$1.50B	$1.28B	$1.09B	$906.0M	$1.00B	$902.0M	$754.0M	$637.0M	$735.0M	$754.0M	$713.0M	$728.0M	$629.0M	$414.0M	$362.0M	$422.0M	$329.0M
Operating income	$4.03B	$3.75B	$1.76B	$2.93B	$2.71B	$2.27B	$2.70B	$2.79B	$2.33B	$1.88B	$2.06B	$2.37B	$2.10B	$2.25B	$2.68B	$1.60B	$682.0M	$1.27B	$1.16B
EBITDAderived	$5.13B	$4.82B	$2.79B	$3.71B	$3.37B	$2.94B	$3.37B	$3.40B	$2.92B	$2.41B	$2.57B	$2.82B	$2.51B	$2.62B	$3.01B	$1.92B	$1.01B	$1.59B	$1.45B
Net income	$2.96B	$4.07B	$840.0M	$2.18B	$2.16B	$1.81B	$2.27B	$2.19B	$994.0M	$1.46B	$1.47B	$1.74B	$1.59B	$1.74B	$1.95B	$1.04B	$428.0M	$755.0M	$739.0M
Basic EPSper diluted share	$20.62	$28.55	$5.19	$15.20	$14.74	$12.07	$14.54	$13.20	$5.99	$8.25	$7.86	$9.04	$7.93	$8.69	$9.58	$5.29	$2.17	$3.87	$3.72
Diluted EPSper diluted share	$20.50	$28.37	$5.15	$15.12	$14.61	$12.01	$14.48	$13.15	$5.97	$8.23	$7.84	$9.02	$7.91	$8.67	$9.55	$5.28	$2.16	$3.84	$3.70

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys1$332.1K disclosed value

Sells (SEC code S)99$81.14M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 14, 2026Form 4	JACKSON DONALD GVP - Treasury & Tax	SellCommon	480	$710.36	$341.0K	8.3K
May 14, 2026Form 4	JACKSON DONALD GVP - Treasury & Tax	SellCommon	160	$711.61	$113.9K	8.8K
May 14, 2026Form 4	JACKSON DONALD GVP - Treasury & Tax	SellCommon	90	$712.70	$64.1K	9.0K
May 12, 2026Form 4	Bush Jennifer MaryVP & Pres. - Power Systems	SellCommon	1.8K	$697.29	$1.25M	12.0K
May 12, 2026Form 4	Bush Jennifer MaryVP & Pres. - Power Systems	SellCommon	1.2K	$695.21	$805.1K	13.8K

Review ownership filings at SEC.gov ↗

CUMMINS INC (CMI)

Financial charts

Financial statements

Insider buys & sells