CMI PE Ratio & Valuation,Is CMI Overvalued

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 21.33 is considered Overvalued compared with the five-year average of 14.04. The fair price of Cummins Inc (CMI) is between 346.73 to 438.56 according to relative valuation methord. Compared to the current price of 515.47 USD , Cummins Inc is Overvalued By 17.54%.

Relative Value

Fair Zone

346.73-438.56

Current Price：515.47

17.54%

Overvalued

21.33

13.32

EV/EBITDA

Cummins Inc. (CMI) has a current EV/EBITDA of 13.32. The 5-year average EV/EBITDA is 9.03. The thresholds are as follows: Strongly Undervalued below 6.42, Undervalued between 6.42 and 7.72, Fairly Valued between 10.33 and 7.72, Overvalued between 10.33 and 11.64, and Strongly Overvalued above 11.64. The current Forward EV/EBITDA of 13.32 falls within the Strongly Overvalued range.

16.75

EV/EBIT

Cummins Inc. (CMI) has a current EV/EBIT of 16.75. The 5-year average EV/EBIT is 11.48. The thresholds are as follows: Strongly Undervalued below 8.31, Undervalued between 8.31 and 9.89, Fairly Valued between 13.06 and 9.89, Overvalued between 13.06 and 14.65, and Strongly Overvalued above 14.65. The current Forward EV/EBIT of 16.75 falls within the Strongly Overvalued range.

2.09

Cummins Inc. (CMI) has a current PS of 2.09. The 5-year average PS is 1.26. The thresholds are as follows: Strongly Undervalued below 0.77, Undervalued between 0.77 and 1.01, Fairly Valued between 1.50 and 1.01, Overvalued between 1.50 and 1.74, and Strongly Overvalued above 1.74. The current Forward PS of 2.09 falls within the Strongly Overvalued range.

16.95

P/OCF

Cummins Inc. (CMI) has a current P/OCF of 16.95. The 5-year average P/OCF is 11.61. The thresholds are as follows: Strongly Undervalued below 8.09, Undervalued between 8.09 and 9.85, Fairly Valued between 13.37 and 9.85, Overvalued between 13.37 and 15.14, and Strongly Overvalued above 15.14. The current Forward P/OCF of 16.95 falls within the Strongly Overvalued range.

23.17

P/FCF

Cummins Inc. (CMI) has a current P/FCF of 23.17. The 5-year average P/FCF is 17.30. The thresholds are as follows: Strongly Undervalued below 7.84, Undervalued between 7.84 and 12.57, Fairly Valued between 22.03 and 12.57, Overvalued between 22.03 and 26.76, and Strongly Overvalued above 26.76. The current Forward P/FCF of 23.17 falls within the Overvalued range.

Cummins Inc (CMI) has a current Price-to-Book (P/B) ratio of 5.84. Compared to its 3-year average P/B ratio of 4.09 , the current P/B ratio is approximately 42.56% higher. Relative to its 5-year average P/B ratio of 4.06, the current P/B ratio is about 43.71% higher. Cummins Inc (CMI) has a Forward Free Cash Flow (FCF) yield of approximately 3.24%. Compared to its 3-year average FCF yield of 3.58%, the current FCF yield is approximately -9.56% lower. Relative to its 5-year average FCF yield of 4.33% , the current FCF yield is about -25.31% lower.

5.84

P/B

Median3y

4.09

Median5y

4.06

3.24

FCF Yield

Median3y

3.58

Median5y

4.33

Competitors Valuation Multiple

The average P/S ratio for CMI's competitors is 3.14, providing a benchmark for relative valuation. Cummins Inc Corp (CMI) exhibits a P/S ratio of 2.09, which is -33.55% above the industry average. Given its robust revenue growth of -1.64%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of CMI increased by 46.31% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 14.67 to 26.48.

The secondary factor is the Revenue Growth, contributed -1.64%to the performance.

Overall, the performance of CMI in the past 1 year is driven by P/E Change. Which is more unsustainable.

-1.64%

8.46B → 8.32B

Revenue Growth

-32.60%

9.97 → 6.72

Margin Expansion

80.55%

14.67 → 26.48

P/E Change

46.31%

348.60 → 510.05

Mkt Cap Growth

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Frequently Asked Questions

Is Cummins Inc (CMI) currently overvalued or undervalued?

What is Cummins Inc (CMI) fair value?

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. The fair price of Cummins Inc (CMI) is between 346.73 to 438.56 according to relative valuation methord.

How does CMI's valuation metrics compare to the industry average?

What is the current P/B ratio for Cummins Inc (CMI) as of Dec 15 2025?

As of Dec 15 2025, Cummins Inc (CMI) has a P/B ratio of 5.84. This indicates that the market values CMI at 5.84 times its book value.

What is the current FCF Yield for Cummins Inc (CMI) as of Dec 15 2025?

As of Dec 15 2025, Cummins Inc (CMI) has a FCF Yield of 3.24%. This means that for every dollar of Cummins Inc’s market capitalization, the company generates 3.24 cents in free cash flow.

What is the current Forward P/E ratio for Cummins Inc (CMI) as of Dec 15 2025?

As of Dec 15 2025, Cummins Inc (CMI) has a Forward P/E ratio of 21.33. This means the market is willing to pay $21.33 for every dollar of Cummins Inc’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Cummins Inc (CMI) as of Dec 15 2025?

As of Dec 15 2025, Cummins Inc (CMI) has a Forward P/S ratio of 2.09. This means the market is valuing CMI at $2.09 for every dollar of expected revenue over the next 12 months.

CMI Valuation