Cummins Inc (CMI) fair value: what the stock is really worth
As of Oct 22, 2026: fair value (intrinsic value) of Cummins Inc stock $359, price $520, upside -30.9%, quality 59 out of 100. Rating: overvalued. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
69 individual criteria per stock, every one traceableSee the method →
Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Oct 22, 2026.
How to read this chart
60‑month range $169.10 – $724.89 · fair‑value band $209.79 – $522.23 · the $519.53 price screens above the $359.16 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Oct 22, 2026.
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Cummins Inc. offers various power solutions worldwide. The company operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera.
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It offers diesel and natural gas-powered engines; and drivetrain systems, including axles, drivelines, brakes, and suspension systems; and on- and off-highway, and other products.
The company also provides aftertreatment technology and solutions comprising custom engineering systems and integrated controls, oxidation catalysts, particulate filters, and selective catalytic reduction systems, as well as engineered components, including dosers; turbochargers, fuel systems, and valvetrain technologies; electronic control modules, sensors, and supporting software; and automated manual transmissions, and automatic transmissions for internal combustion engines.
In addition, it sells and offers support services power generation systems, high-horsepower engines, and heavy-duty and medium-duty engines; offers application engineering services, custom-designed assemblies, and in-shop and field-based repair services; and retail and wholesale aftermarket parts.
Further, the company offers standby and prime power generators, controls, paralleling systems, and transfer switches; turnkey solutions for distributed generation and energy management applications using natural gas, diesel, battery energy storage systems, and newer alternative sustainable fuels; diesel and natural gas high-speed, high-horsepower engines; and A/C generator/alternator products.
Additionally, it provides electrified power systems, including batteries, fuel cells, and electric powertrain technologies. It sells its products to original equipment manufacturers, distributors, dealers, and other customers.
The company was formerly known as Cummins Engine Company and changed its name to Cummins Inc. in 2001. Cummins Inc. was founded in 1919 and is headquartered in Columbus, Indiana.
Stock analysis
Cummins Inc (CMI) currently trades at $519.53, while our model-based Fair Value estimate is $359.16, 30.9% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the Growth Earnings group reads highest at a median of $401.72 per share, and 0 of the 26 models we run sit above the $519.53 price.
Bear case: the Asset-Based group reads lowest at $38.73, and 26 of the 26 models stay below the price. Data coverage for this calculation is high.
Scenario range: $209.79 (bear) to $522.23 (bull), the price of $519.53 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 59/100 (solid quality), in the Industrials sector.
Mixed Growth: Revenue is growing, but margins or cash flow do not fully confirm the trend.
Cummins Inc reported revenue of $33.7B in FY2025 versus $24.0B in FY2021, a compound +8.8%/yr. Reported net income was $2.8B in FY2025, compounding +7.5%/yr from FY2021.
Key figures
Market cap $72.0B Large · P/E ratio 26.5 · P/S ratio 2.17 · EPS (TTM) $19.57 · Dividend yield 1.5% · Net margin 7.8% · Return on equity 21.1% · Return on assets (EBIT) 10.0%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 65 out of 100 (medium confidence).
What moves the price
The share trades about 28% below its 52-week high and 29% above its 52-week low, currently below its 200-day average.
For context, the median of 10 Industrials peers we cover trades at −48% fair-value upside, at −31%, CMI screens cheaper than that median.
Fair Value models
Bear$209.79Fair Value $359.16Bull$522.23
Price $519.53 · Upside -30.9%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2025 figures (about 10 months old). Earnings retained since then ($9.38 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.78/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Revenue growth 1 year
−1.3%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+6.2%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+11.2%
Start year 2020 (pandemic). Over 10 years: +5.8% a year
Revenue growth 40 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+7.1%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Basis: adjusted.
+12.1%
Earnings growth per share plus dividend.
Earnings per share, growth per year+10.6%
Dividend (yield on the price)1.5%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.7.2% vs 9.5%, steady
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.12% → 12%
Pace: the 5-year rate starts in 2020 (pandemic)
Growth Forecast
A lot of optimism in the price
The price assumes more growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+18.4%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+9.0%
Yearly sales growth analysts expect, extended to five years.
After inflation (USA: IMF forecast 2.4% a year to 2030, 3.1% from 2016 to 2025) that is about +15.7% a year for the price and +6.5% for the forecasts.
AI conclusion: Moderate moat from scale in engines and solid ROE forms the core strength, while average pricing power and innovation plus exposure to cyclical swings in the core engine segment limit stability.
Main risk: Continued swings in trucking and construction threaten demand stability in the traditional engine business.
Cummins is securing multi-year deals to supply natural gas generators and battery storage systems for data centers and infrastructure projects through partners like EquipmentShare. This builds on strength in its power systems segment amid rising electricity demand. The traditional engine business, however, stays exposed to swings in trucking and construction. Will the power generation push deliver steadier growth than the cyclical core or simply layer on more project-based swings?
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Specialty Industrial Machinery · 800 stocks
Beats the industry median on 9/15 measures
Overall it ranks above its industry peers.
Valuation
Quality Score59 · Above median
Fair Value upside−33.8% · Below median
Profitability
Return on equity (12 months)21.1% · Top 25%
Return on assets8.4% · Top 25%
Net margin (12 months)7.8% · Above median
Operating margin (12 months)11.9% · Above median
Growth and dividend
Revenue growth (quarter YoY)9.4% · Above median
Dividend yield (12 months)1.5% · Above median
Balance sheet
Debt / equity0.55× · Highest 25%
Valuation Multiplesvs Specialty Industrial Machinery median · lower = cheaper
P/E (12 months)26.5× · Cheaper than median
P/B6.09× · Priciest 25%
P/S (12 months)2.17× · Pricier than median
Price / free cash flow31.5× · Pricier than median
EV/EBITDA15.8× · Pricier than median
PEG1.06× · Cheaper than median
Strength profile in five axes (Snowflake)
This stockSector peers
VALUE (fair-value potential)0· sector 0
FUTURE (revenue growth)47· sector 32
PAST (return on equity)84· sector 27
HEALTH (low debt)73· sector 95
DIVIDEND (yield)31· sector 27
VALUE 0: the price sits above our fair-value range.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Cummins Inc Fair Value". https://www.fairvalue-calculator.com/stock/CMI
Frequently asked questions
Is Cummins Inc (CMI) overvalued or undervalued?
As of Oct 22, 2026, our model estimates a fair value of $359.16 versus a price of $519.53, about −31% upside (overvalued).
What is the fair value of CMI?
Our model-based fair value for Cummins Inc is $359.16 (as of Oct 22, 2026), built from audited fundamentals. The current price: $519.53.
What is the quality score of CMI?
Cummins Inc has a Quality Score of 59/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Cummins Inc (CMI)?
Our model-based price target is the fair value of $359.16 (as of Oct 22, 2026) from 26 valuation models. Cautious scenario $209.79, optimistic scenario $522.23. It is a calculation from audited fundamentals, not an analyst target.
What is the Cummins Inc stock forecast for 2026?
Our models put fair value at $359.16, about −31% upside versus a price of $519.53 (overvalued). Cautious scenario $209.79, optimistic scenario $522.23. The calculation is refreshed regularly with new filings.
What is the revenue of Cummins Inc (CMI)?
Cummins Inc reported trailing-twelve-month revenue of about $34.7B (latest available figure, as of Oct 22, 2026).
Does Cummins Inc pay a dividend?
Cummins Inc currently shows a dividend yield of 1.54% relative to its recent price (as of Oct 22, 2026).
What growth is priced into Cummins Inc (CMI)?
For today's price to be fair in a discounted-cash-flow model, Cummins Inc would have to grow free cash flow by +18.4 % per year for five years (discount rate 9.8 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +11.2 % per year. As of Oct 22, 2026.
What discount rate (WACC) does the fair value of CMI use?
Our models discount Cummins Inc at 9.8 %: a base by market capitalisation (large), damped by beta 1.24, country premium for USA. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Cummins Inc that is +18.4 % per year a year over ten years, using the same discount rate (9.8 %) and the same formula as our fair value.
How much growth has Cummins Inc (CMI) delivered so far?
Over the past 5 years revenue at Cummins Inc grew +11.2 % a year. The price currently implies +18.4 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Cummins Inc (CMI) growing?
The median revenue growth in the sector is +7.5 % a year. That is the yardstick for the growth priced into Cummins Inc (+18.4 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Cummins Inc (CMI)?
The free-cash-flow yield on the price is 3.31 %: that much free cash flow Cummins Inc produces per unit of market value. When it exceeds the discount rate of our models (9.8 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Cummins Inc (CMI)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Cummins Inc it is $359.16 per share (as of Oct 22, 2026), against a price of $519.53. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Cummins Inc stock overvalued or undervalued in 2026?
As of Oct 22, 2026, CMI trades above its calculated fair value: price $519.53, fair value $359.16, a gap of about −31% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of CMI?
No. The price is what the market pays today ($519.53); the fair value is what the company's own numbers justify ($359.16). For Cummins Inc the two are $160.37 per share apart. That gap is exactly why we show both numbers side by side.
How much is Cummins Inc worth?
The market values Cummins Inc at about $72.0B (market capitalisation, as of Oct 22, 2026). Per share that is $519.53; our models calculate a fair value of $359.16 per share.
What do the bullish and bearish scenarios say about CMI?
Our models span a range for Cummins Inc: cautious scenario $209.79, base $359.16, optimistic $522.23 per share (as of Oct 22, 2026, price $519.53). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of CMI?
Cummins Inc trades at a price-to-earnings ratio of 26.5 (as of Oct 22, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $359.16 is built from several models across several years. Other multiples: PEG 1.1, P/B 6.1, P/S 2.2, EV/EBITDA 15.8.
What is the PEG ratio of CMI?
The PEG ratio of Cummins Inc is 1.06 (P/E divided by earnings growth, as of Oct 22, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of Cummins Inc (CMI)?
Balance-sheet figures for Cummins Inc (as of Oct 22, 2026): return on equity 21.1%, debt of 0.55 per unit of equity. They feed the Quality Score of 59/100, which measures business quality independently of the share price.
How far is CMI from its 52-week high?
Cummins Inc trades at $519.53, about 28% below its 52-week high of $724.89 and 29% above the low of $402.10 (as of Oct 22, 2026). Distance from the high says nothing about value: that is what the fair value of $359.16 is for.
Which stocks are comparable to Cummins Inc?
From the same area (Industrials) we also value GE Vernova Inc, SIE, Eaton Corporation, Parker-Hannifin Corporation, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Cummins Inc stock attractive at the current price?
The data as of Oct 22, 2026: price $519.53, calculated fair value $359.16 (−31%), Quality Score 59/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of CMI calculated?
We run Cummins Inc through 26 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $359.16, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 13.2 % above its aggregate fair value. Cummins Inc itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Cummins Inc (CMI)?
The closing price on Oct 22, 2026 was $519.53. Our model-based fair value is $359.16, about −31% upside (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Cummins Inc right now?
Solid but not exceptional quality (59/100) and above fair value, neither a clear bargain nor a standout compounder. A fairly wide model range ($209.79 to $522.23) leaves room in how you read the outcome.
Where does the earnings growth of Cummins Inc (CMI) come from?
Earnings per share at Cummins Inc grew +8.8 % a year from 2014 to 2025. Broken into its drivers: revenue per share +9.7 %, EBIT margin −2.2 %, tax rate +0.3 %, residual (interest, one-offs) +1.1 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Cummins Inc
How large is the market capitalisation of Cummins Inc (CMI)?
The market capitalisation of Cummins Inc is $72.0B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Cummins Inc (CMI)?
The price-to-sales ratio of Cummins Inc is 2.17 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Cummins Inc (CMI)?
Earnings per share at Cummins Inc are $19.57 (price ÷ EPS = P/E 26.5). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Cummins Inc (CMI)?
The dividend yield of Cummins Inc is 1.5% (payout 40.9%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Cummins Inc (CMI)?
The net margin of Cummins Inc is 7.8% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Cummins Inc (CMI)?
The return on equity (ROE) of Cummins Inc is 21.1% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Cummins Inc (CMI)?
On an EBIT basis the return on assets of Cummins Inc is 10.0% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Cummins Inc (CMI)?
The operating margin of Cummins Inc is 11.9% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Cummins Inc (CMI)?
Revenue at Cummins Inc is growing +9.4% versus a year earlier (3y avg +6.2%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Cummins Inc (CMI)?
Earnings per share at Cummins Inc are growing +4.7% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Cummins Inc (CMI) carry?
The net debt of Cummins Inc is $5.3B (fiscal year 2025, ≈ 2.2 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Oct 22, 2026