Cummins Inc (CMI) stock analysis
Cummins Inc (CMI) clears 4 of this site's 8 mechanical value filters, 4 of 8 Buffett-style checks and 1 of 5 Lynch-style checks. At $519.53 it trades 25.9% above this site's neutral DCF value (a margin of safety of -25.9%). Its earnings quality rates Strong and it returns +1.3% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Cummins do?
Cummins makes diesel and natural-gas engines, generators and power systems and related parts for trucks, heavy equipment and backup power, and is investing in electric and hydrogen systems.
Brands and businesses it owns
- Meritor
- Accelera
What stands out about Cummins?
- The share price implies 13.8% yearly growth. At $519.53, CMI's free cash flow of $24.17 per share would have to grow 13.8% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- Misses 2 of the 8 value filters. It fails Trailing P/E < 25 (26.65) and PEG Ratio < 1.5 (1.79); the other 4 pass and 2 were not evaluated. See every filter.
- The margin of safety is steady. It went from -27% on Oct 7 to -26% on Oct 23 across 5 weekly readings. See the trend.
- Strongest against peers: return on equity. At 22% (peer median 15%) it ranks 4th of 17 among machinery stocks this site tracks. See the ranking.
- Weakest against peers: net margin. At 7.8% (peer median 12.4%) it ranks 16th of 17 among machinery stocks this site tracks. See the ranking.
How has Cummins' share price moved?
The interactive price chart needs JavaScript.
Is Cummins undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -25.9%
- P/E vs. its own history 26.7x · the middle Real range: 11.9x–40.7x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 3.86/5 28 analysts this month: 5 strong buy, 14 buy, 9 hold, 0 sell, 0 strong sell (Finnhub).
- Altman Z″-Score (bankruptcy risk) 5.06 · Safe zone
- Earnings quality (is the profit real?) Strong · all 5 checks clean Beneish M-score −2.48 · accruals −2.0% of assets · 115% of profit arrived as cash · stock comp 0.3% of revenue · share count −1.4% a year. From the latest 10-K (year to Dec 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +1.3% net Latest fiscal year (2025): dividends 1.5% + buybacks 0.0% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 28%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $7.43 per $1 of new profit · Capital-hungry · but only 22% return on capital Operating profit $2.3B → $3.2B, capital needed $7.9B → $14B, 2016–2025 (3-year averages); return on capital now 22% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. Cyclical: the answer depends on where in its cycle the window starts and ends. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 1.79 · Above fair P/E 26.7× ÷ 14.9% a year of growth behind it. 202nd lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 2 of 4 · misses capital-light, price Capital-light growth: not cleared (profit grew 1.4×, under 2×); Profit is real: cleared; Cash to owners: cleared; Fair price (PEG): not cleared (PEG 1.79, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 0 flags
- Standing vs. sector peers 3 of 7 measures above the median Compared with the 16 other machinery stocks this site tracks: 1 in the top third, 3 in the bottom third.
- Dividend payout sustainability 0/6 · clean
How does Cummins compare with its peers?
3 of 7 measures sit above the median of the 16 other machinery stocks tracked here, 1 in the top third and 3 in the bottom third.
- P/E ratiolower is cheaper · peer median 26.7× 26.7× –9th of 17
- Free-cash-flow yieldhigher is cheaper · peer median 4.2% 4.7% –7th of 17
- Return on equityhigher is better · peer median 15% 22% ✓4th of 17
- Net marginhigher is better · peer median 12.4% 7.8% ✕16th of 17
- Revenue growthhigher is better, year on year · peer median 5.2% 2.9% ✕13th of 17
- Debt / equitylower is safer · peer median 0.54 0.60 ✕12th of 16
- Dividend yieldamong dividend payers · peer median 1.28% 1.53% –8th of 17
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and CMI doesn't clear enough of it yet. In its favor: CMI is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, has grown earnings per share at a solid clip over five years, and trades at a reasonable multiple of owner earnings, his own term for the real cash a business could pay out. Where it comes up short: CMI carries more debt relative to equity than he typically tolerates, runs thinner pretax margins than he'd like to see, doesn't cover its interest expense as comfortably as he'd want, and is trading above what a conservative discounted-cash-flow estimate says it's worth right now.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✕
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✓
Lynch looked for growth stories that weren't overpriced for that growth, and CMI falls short of his bar. In its favor: CMI converts earnings into real cash at a reasonable price. Where it comes up short: CMI doesn't pay much of a dividend, which is the main reason to own a slow grower in the first place, isn't even growing at the modest pace he'd expect from a slow grower, carries more debt than he liked to see, even allowing for the extra room a large, stable business gets, and is priced too rich for how little growth is actually left in the business.
- Dividend yield > 2.5% ✕
- EPS growth 0%-10% ✕
- Debt/Equity < 0.6 ✕
- P/E < 20 ✕
- Price/FCF < 25 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Cummins pass?
- Market Cap > $25B $72.4B
- Trailing P/E < 25 26.65
- PEG Ratio < 1.5 1.79
- Price/Book < 8 5.63
- Price/Sales < 7 2.08
- EPS Growth YoY > -5% +4.7%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Cummins' margin of safety?
-27% on 2026-10-07 → -26% on 2026-10-23 (5 weekly readings).
Where is Cummins in its 52-week range?
What is the short interest in Cummins?
4,147,461 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Cummins? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case +26%
- Short interest under 5% of float 3.0%
- Passes most of the 6 fundamental filters 4/6 passed
- Price run-up backed by value, not just momentum +27% off 52wk low
- Debt/equity stable since 2016 0.23 → 0.56
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Cummins shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from CMI's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Cummins' 10-year financials show?
From CMI's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Cummins
What kind of company is Cummins?
Cummins makes diesel and natural-gas engines, generators and power systems and related parts for trucks, heavy equipment and backup power, and is investing in electric and hydrogen systems. Brands and businesses it owns include Meritor and Accelera. This site groups it with Machinery stocks.
Is Cummins trading above or below its DCF value?
At $519.53, CMI trades 25.9% above this site's neutral DCF value of $412.81 per share, a margin of safety of −25.9%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Cummins pass?
CMI passes 4 of 8. It passes Market Cap > $25B ($72.4B), Price/Book < 8 (5.63), Price/Sales < 7 (2.08) and EPS Growth YoY > -5% (+4.7%). It misses Trailing P/E < 25 (26.65) and PEG Ratio < 1.5 (1.79). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
What growth is Cummins' share price pricing in?
At $519.53, CMI's free cash flow of $24.17 per share would have to grow 13.8% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
How much cash does Cummins return to shareholders?
CMI's net shareholder yield is +1.3%: the cash it returns through dividends and buybacks, minus stock-based compensation, as a share of its market value. Latest fiscal year (2025): dividends 1.5% + buybacks 0.0% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 28%. Its trailing dividend yield is 1.53%, paid out of 33% of its free cash flow; the dividend-sustainability check raises 0 of 6 flags. See Shareholder Yield Leaders and the Sustainable Dividend Screener.
When does Cummins report earnings next?
Cummins's next earnings report is expected on November 5, 2026 before the market opens, with analysts expecting earnings of $8.25 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 2 times, by an average of −0.3%.
Where do these numbers come from?
- Financial statements: Cummins's 10-K annual report for the year ended Dec 31, 2025, filed Feb 10, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Cummins Inc analysis
This page shows every value-investing check the site runs on Cummins Inc (CMI) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.