# Cummins (CMI.US)

Canonical: https://gigainvestors.com/s/CMI

Analysis as of: 2026-10-16T07:27:31.863Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $532.73 per share; close as of 2026-10-15.

Estimated value: low $309.84 per share, central $429.06 per share, high $499.66 per share. Buy at or below the central value $429.06 per share. Valuation as of 2026-10-16T07:27:31.863Z; scenarios are not confidence intervals.

Expected annual return: 8.6% at the stated quote. About 8.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.18×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.11×

- FY2018: 0.12×

- FY2019: 0.11×

- FY2020: 0.11×

- FY2021: 0.11×

- FY2022: 0.10×

- FY2023: 0.05×

- FY2024: 0.11×

- FY2025: 0.12×

- LTM to Jun 2026: 0.11×

### moat: pass

- ROIC, median of available years: 23.1%

- ROIC, second-lowest year: 18.3%

- Typical minus recent gross margin: -0.6 pp

- Typical gross margin (annual median): 24.7%

- Recent gross margin (lower of latest and 3-year median): 25.3%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.3%

- ROIC including acquisitions, ten-year median: 18.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 22.9%

- FY2018: 30.9%

- FY2019: 28.4%

- FY2020: 23.4%

- FY2021: 25.7%

- FY2022: 18.3%

- FY2023: 10.6%

- FY2024: 23.5%

- FY2025: 20.5%

- LTM to Jun 2026: 18.9%

### economics: pass

- Owner earnings / net income, 5-yr: 0.98×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $12B

- Net income, five-year total: $12B

- Return on incremental invested capital: 30.3%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: 0.5 pp

- Working capital / revenue, final three-year average: 21.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 0.97×

- FY2025: 0.95×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 22.9% vs 20.5%

- Per-share earnings: 7.84 to 20.50 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.5%

- Ordinary dilution, 5-year annual growth: -1.4%

- Market cap gain: $48B

- Cumulative retained earnings: $12B

- Diluted shares, 10-year annual growth: -2.5%

- Diluted shares, 5-year annual growth: -1.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 12.8%

- Per-share value change: $12.66

- Per-share value, starting three-year median: $7.84

- Per-share value, ending three-year median: $20.50

- Buybacks concentrated in cheaper years (correlation): 0.86

- Average buyback yield: 2.8%

- Buyback history: 8 years

- Debt-funded buybacks: No

- Acquisition spending: $4.3B

- Cumulative net income, 10 years: $20B

- ROIC, first three-year median: 22.9%

- ROIC, last three-year median: 20.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: $8.23

- FY2017: $5.97

- FY2018: $13.15

- FY2019: $14.48

- FY2020: $12.01

- FY2021: $14.61

- FY2022: $15.12

- FY2023: $5.15

- FY2024: $28.37

- FY2025: $20.50

### accounting: pass

- Sloan accruals: -2.3%

- Receivables to sales index (DSRI): 1.14×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.27×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.36×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.6%

- FY2017: -7.1%

- FY2018: -1.2%

- FY2019: -4.7%

- FY2020: -4.1%

- FY2021: -0.5%

- FY2022: 0.6%

- FY2023: -10.1%

- FY2024: 7.8%

- FY2025: -2.3%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 25% since Jun 2026 · "Cummins Q2 Earnings Miss Estimates on High Costs, Revenues Beat" (finance.yahoo.com, Aug 2026) · sales +3.1%

Story as of 2026-10-16T09:58:31.586Z; price observation 2026-10-15.

Price needs cash profits to grow 9.6% a year for ten years

- 2025-05-19: CMI Q1 Earnings Call: Power Systems Outperformance and Uncertainty from Tariffs Shape Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/cmi-q1-earnings-call-power-105621195.html))

- 2025-08-05: Cummins beats quarterly revenue estimates on generator demand; tariff concerns linger ([investing.com](https://www.investing.com/news/stock-market-news/cummins-beats-quarterly-revenue-estimates-on-surging-power-generation-demand-4170472))

- 2025-12-22: Cummins gets  boost from power generation market offsetting truck downturn ([finance.yahoo.com](https://finance.yahoo.com/news/cummins-gets-boost-power-generation-145550460.html))

- 2026-02-06: CMI Q4 Deep Dive: Power Systems Strength Balances Truck Market Weakness, Tariffs Pressure Margins ([finance.yahoo.com](https://finance.yahoo.com/news/cmi-q4-deep-dive-power-053311947.html))

- 2026-07-29: Cummins Slows Its 2027 Engine Rollout as EPA Rewrites the Rulebook ([finance.yahoo.com](https://finance.yahoo.com/technology/articles/cummins-slows-2027-engine-rollout-230700304.html))

- 2026-08-05: Cummins Q2 Earnings Miss Estimates on High Costs, Revenues Beat ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/cummins-q2-earnings-miss-estimates-144500610.html))

### Sales · FY2025–2026

sales +3.1%; source https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm; observed 2026-02-10.

- FY2017: $20B 

- FY2018: $24B 

- FY2019: $24B 

- FY2020: $20B 

- FY2021: $24B 

- FY2022: $28B 

- FY2023: $34B 

- FY2024: $34B 

- FY2025: $34B 

- FY2026: $35B 

### Gross margin · FY2026

gross margin 25.3%; source https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm; observed 2026-02-10.

- FY2017: 25.0% 

- FY2018: 24.1% 

- FY2019: 25.4% 

- FY2020: 24.7% 

- FY2021: 23.7% 

- FY2022: 23.9% 

- FY2023: 24.2% 

- FY2024: 24.7% 

- FY2025: 25.3% 

- FY2026: 25.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 33.7 billion.

- Source: https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm (filed 2026-02-10); FY2025: revenue 33670000000; grossProfit 8516000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 24.2% to 25.3% during 2023–25; it earns 23.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2023: grossProfit / revenue = 24.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2024: grossProfit / revenue = 24.7%.

- Source: https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm (filed 2026-02-10); FY2025: grossProfit / revenue = 25.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); 10-year return on capital observations [[2017,0.22930773881499394],[2018,0.30854808328179456],[2019,0.2836018077971138],[2020,0.23359290760015625],[2021,0.2569223853859473],[2022,0.18271167141104977],[2023,0.10580976150859678],[2024,0.23508578704926192],[2025,0.205281026528885],[2026,0.18936545075031763]]; median 0.23145032320757508. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 24% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm (filed 2026-02-10); Gross margin observations: [[2021,0.23708421797593773],[2022,0.23933176604687612],[2023,0.2421547042418905]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2016: growth capex 0; upkeep 594000000; owner earnings 1330000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2017: growth capex 4000000; upkeep 583000000; owner earnings 999000000. Growth capex / owner earnings = 0.004004004004004004.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2018: growth capex 173000000; upkeep 611000000; owner earnings 2141000000. Growth capex / owner earnings = 0.08080336291452592.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2019: growth capex 0; upkeep 775000000; owner earnings 2157363315.696649. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2020: growth capex 0; upkeep 575000000; owner earnings 1885809497.5151849. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2021: growth capex 124000000; upkeep 662000000; owner earnings 2131000000. Growth capex / owner earnings = 0.058188643829188175.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2022: growth capex 132000000; upkeep 784000000; owner earnings 2151000000. Growth capex / owner earnings = 0.061366806136680614.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2023: growth capex 189000000; upkeep 1024000000; owner earnings 735000000. Growth capex / owner earnings = 0.2571428571428571.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); FY2024: growth capex 7367886.243453264; upkeep 1200632113.7565467; owner earnings 3810367886.243453. Growth capex / owner earnings = 0.001933641701646053.

- Source: https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm (filed 2026-02-10); FY2025: growth capex 0; upkeep 1235000000; owner earnings 2713000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); Dividend observations: [[2016,676000000],[2017,701000000],[2018,718000000],[2019,761000000],[2020,782000000],[2021,809000000],[2022,855000000],[2023,921000000],[2024,969000000],[2025,1055000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); CMI.US SharesStats.PercentInsiders = 0.211 percentage points; cache date 2026-10-16.

### What could break it

"GOVERNMENT REGULATION" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm (filed 2026-02-10); GOVERNMENT REGULATION

### What the price says

The price assumes cash profits grow 9.6% yearly over ten years; actual growth was 12.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-10); Ten-year compound average after fade. Initial solved rate 0.1626634664986633. Price 532.73; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 6.244155632877459 → FY2025 19.56020187454939. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $127.82 per share

- 2016-11: $141.78 per share

- 2016-12: $136.67 per share

- 2017-01: $147.01 per share

- 2017-02: $148.49 per share

- 2017-03: $151.20 per share

- 2017-04: $150.94 per share

- 2017-05: $157.70 per share

- 2017-06: $162.22 per share

- 2017-07: $167.90 per share

- 2017-08: $159.38 per share

- 2017-09: $168.03 per share

- 2017-10: $176.88 per share

- 2017-11: $167.40 per share

- 2017-12: $176.64 per share

- 2018-01: $188.00 per share

- 2018-02: $168.17 per share

- 2018-03: $162.09 per share

- 2018-04: $159.86 per share

- 2018-05: $142.39 per share

- 2018-06: $133.00 per share

- 2018-07: $142.81 per share

- 2018-08: $141.80 per share

- 2018-09: $146.07 per share

- 2018-10: $136.69 per share

- 2018-11: $151.06 per share

- 2018-12: $133.64 per share

- 2019-01: $147.11 per share

- 2019-02: $154.09 per share

- 2019-03: $157.87 per share

- 2019-04: $166.29 per share

- 2019-05: $150.76 per share

- 2019-06: $171.34 per share

- 2019-07: $164.00 per share

- 2019-08: $149.27 per share

- 2019-09: $162.67 per share

- 2019-10: $172.48 per share

- 2019-11: $182.86 per share

- 2019-12: $178.96 per share

- 2020-01: $159.97 per share

- 2020-02: $151.29 per share

- 2020-03: $135.32 per share

- 2020-04: $163.50 per share

- 2020-05: $169.60 per share

- 2020-06: $173.26 per share

- 2020-07: $193.26 per share

- 2020-08: $207.25 per share

- 2020-09: $211.16 per share

- 2020-10: $219.89 per share

- 2020-11: $231.17 per share

- 2020-12: $227.10 per share

- 2021-01: $234.42 per share

- 2021-02: $253.20 per share

- 2021-03: $259.11 per share

- 2021-04: $252.04 per share

- 2021-05: $257.28 per share

- 2021-06: $243.81 per share

- 2021-07: $232.10 per share

- 2021-08: $235.98 per share

- 2021-09: $224.56 per share

- 2021-10: $239.84 per share

- 2021-11: $209.75 per share

- 2021-12: $218.14 per share

- 2022-01: $220.88 per share

- 2022-02: $204.12 per share

- 2022-03: $205.11 per share

- 2022-04: $189.19 per share

- 2022-05: $209.12 per share

- 2022-06: $193.53 per share

- 2022-07: $221.31 per share

- 2022-08: $215.37 per share

- 2022-09: $203.51 per share

- 2022-10: $244.51 per share

- 2022-11: $251.16 per share

- 2022-12: $242.29 per share

- 2023-01: $249.54 per share

- 2023-02: $243.08 per share

- 2023-03: $238.88 per share

- 2023-04: $235.04 per share

- 2023-05: $204.41 per share

- 2023-06: $245.16 per share

- 2023-07: $260.80 per share

- 2023-08: $230.04 per share

- 2023-09: $228.46 per share

- 2023-10: $216.30 per share

- 2023-11: $224.16 per share

- 2023-12: $239.57 per share

- 2024-01: $239.30 per share

- 2024-02: $268.61 per share

- 2024-03: $294.65 per share

- 2024-04: $282.49 per share

- 2024-05: $281.73 per share

- 2024-06: $276.93 per share

- 2024-07: $291.80 per share

- 2024-08: $312.85 per share

- 2024-09: $323.79 per share

- 2024-10: $328.98 per share

- 2024-11: $375.04 per share

- 2024-12: $348.60 per share

- 2025-01: $356.25 per share

- 2025-02: $368.18 per share

- 2025-03: $313.44 per share

- 2025-04: $293.84 per share

- 2025-05: $321.48 per share

- 2025-06: $327.50 per share

- 2025-07: $367.62 per share

- 2025-08: $398.44 per share

- 2025-09: $422.37 per share

- 2025-10: $437.68 per share

- 2025-11: $497.98 per share

- 2025-12: $510.45 per share

- 2026-01: $578.82 per share

- 2026-02: $583.87 per share

- 2026-03: $538.02 per share

- 2026-04: $671.01 per share

- 2026-05: $646.63 per share

- 2026-06: $713.21 per share

- 2026-07: $634.20 per share

- 2026-08: $564.40 per share

- 2026-09: $516.57 per share

- 2026-10: $529.35 per share

## Annual estimated value (USD per share)

- FY2016: low $99.05 per share, central $124.36 per share, high $144.34 per share

- FY2017: low $102.33 per share, central $120.25 per share, high $139.14 per share

- FY2018: low $167.36 per share, central $241.25 per share, high $282.46 per share

- FY2019: low $172.93 per share, central $249.34 per share, high $291.95 per share

- FY2020: low $153.87 per share, central $171.92 per share, high $195.94 per share

- FY2021: low $184.81 per share, central $213.26 per share, high $245.07 per share

- FY2022: low $224.84 per share, central $275.33 per share, high $318.85 per share

- FY2023: low $244.37 per share, central $276.29 per share, high $318.78 per share

- FY2024: low $316.38 per share, central $441.10 per share, high $515.79 per share

- FY2025: low $296.91 per share, central $411.69 per share, high $479.67 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:33:11.796Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/26172/000002617226000009/cmi-20251231.htm); period 2025-12-31, filed 2026-02-10.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.