CMI Valuation

Cummins Inc

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392.130

-3.1(-0.784%)1D

Overview
Forecast
Valuation
Earnings

CMI Relative Valuation

CMI's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, CMI is overvalued; if below, it's undervalued.

Historical Valuation

Cummins Inc (CMI) is now in the Overvalued zone, suggesting that its current forward PE ratio of 18.28 is considered Overvalued compared with the five-year average of 13.89. The fair price of Cummins Inc (CMI) is between 293.63 to 366.13 according to relative valuation methord. Compared to the current price of 395.23 USD , Cummins Inc is Overvalued By 7.95%.

Relative Value

Fair Zone

293.63-366.13

Current Price：395.23

7.95%

Overvalued

18.14

Trailing

Forward

11.12

EV/EBITDA

Cummins Inc. (CMI) has a current EV/EBITDA of 11.12. The 5-year average EV/EBITDA is 8.95. The thresholds are as follows: Strongly Undervalued below 6.64, Undervalued between 6.64 and 7.80, Fairly Valued between 10.11 and 7.80, Overvalued between 10.11 and 11.27, and Strongly Overvalued above 11.27. The current Forward EV/EBITDA of 11.12 falls within the Overvalued range.

14.30

EV/EBIT

Cummins Inc. (CMI) has a current EV/EBIT of 14.30. The 5-year average EV/EBIT is 11.43. The thresholds are as follows: Strongly Undervalued below 8.47, Undervalued between 8.47 and 9.95, Fairly Valued between 12.92 and 9.95, Overvalued between 12.92 and 14.40, and Strongly Overvalued above 14.40. The current Forward EV/EBIT of 14.30 falls within the Overvalued range.

1.66

Cummins Inc. (CMI) has a current PS of 1.66. The 5-year average PS is 1.24. The thresholds are as follows: Strongly Undervalued below 0.82, Undervalued between 0.82 and 1.03, Fairly Valued between 1.44 and 1.03, Overvalued between 1.44 and 1.65, and Strongly Overvalued above 1.65. The current Forward PS of 1.66 falls within the Strongly Overvalued range.

14.81

P/OCF

Cummins Inc. (CMI) has a current P/OCF of 14.81. The 5-year average P/OCF is 11.52. The thresholds are as follows: Strongly Undervalued below 8.33, Undervalued between 8.33 and 9.92, Fairly Valued between 13.12 and 9.92, Overvalued between 13.12 and 14.72, and Strongly Overvalued above 14.72. The current Forward P/OCF of 14.81 falls within the Strongly Overvalued range.

20.50

P/FCF

Cummins Inc. (CMI) has a current P/FCF of 20.50. The 5-year average P/FCF is 17.16. The thresholds are as follows: Strongly Undervalued below 7.87, Undervalued between 7.87 and 12.51, Fairly Valued between 21.81 and 12.51, Overvalued between 21.81 and 26.46, and Strongly Overvalued above 26.46. The current Forward P/FCF of 20.50 falls within the Historic Trend Line -Fairly Valued range.

Cummins Inc (CMI) has a current Price-to-Book (P/B) ratio of 4.62. Compared to its 3-year average P/B ratio of 3.98 , the current P/B ratio is approximately 16.16% higher. Relative to its 5-year average P/B ratio of 4.02, the current P/B ratio is about 14.99% higher. Cummins Inc (CMI) has a Forward Free Cash Flow (FCF) yield of approximately 3.01%. Compared to its 3-year average FCF yield of 3.58%, the current FCF yield is approximately -16.00% lower. Relative to its 5-year average FCF yield of 4.46% , the current FCF yield is about -32.48% lower.

4.58

P/B

Median3y

3.98

Median5y

4.02

3.03

FCF Yield

Median3y

3.58

Median5y

4.46

Competitors Valuation Multiple

The average P/S ratio for CMI's competitors is 2.22, providing a benchmark for relative valuation. Cummins Inc Corp (CMI) exhibits a P/S ratio of 1.66, which is -25.17% above the industry average. Given its robust revenue growth of -1.74%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Illinois Tool Works Inc

Magna International Inc

Donaldson Company Inc

2.43

4.84%

9.28B

Performance Decomposition

Market capitalization of CMI increased by 22.67% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 8.55 to 10.74.

The secondary factor is the P/E Change, contributed -1.20%to the performance.

Overall, the performance of CMI in the past 1 year is driven by Margin Expansion. Which is more sustainable.

-1.74%

8.80B → 8.64B

Revenue Growth

25.61%

8.55 → 10.74

Margin Expansion

-1.20%

18.66 → 18.44

P/E Change

22.67%