📊 CMI Key Takeaways
Is Cummins Inc. (CMI) a Good Investment?
Cummins demonstrates solid financial health with strong profitability metrics (23% ROE, 8.4% net margin) and robust cash generation ($2.4B FCF), supporting its position in the engines and turbines sector. However, revenue contraction (-1.3% YoY) and significant EPS decline (-27.7% YoY) indicate headwinds that warrant monitoring, though the company maintains healthy liquidity and manageable leverage ratios.
Cummins shows strong core fundamentals, with solid margins, high returns on equity and assets, and healthy free cash flow generation despite a modest year-over-year decline in revenue and net income. The balance sheet remains sound, with good liquidity, manageable leverage, and strong interest coverage, which supports resilience through industrial cycles. Growth quality is mixed near term, but the company still appears fundamentally strong enough to merit a positive view.
Why Buy Cummins Inc. Stock? CMI Key Strengths
- Strong return on equity (23%) and return on assets (8.4%) indicating efficient capital deployment
- Solid free cash flow generation ($2.4B) covering capex 2x over with 7.1% FCF margin
- Conservative balance sheet with 0.61x debt-to-equity ratio and 12.2x interest coverage ratio
- Healthy liquidity position with 1.76x current ratio and $2.8B cash on hand
- Solid profitability with 25.3% gross margin, 12.0% operating margin, and 8.4% net margin
- Healthy financial position supported by 1.76x current ratio, 0.61x debt/equity, and 12.2x interest coverage
- Consistent cash generation with $3.62B operating cash flow and $2.39B free cash flow
CMI Stock Risks: Cummins Inc. Investment Risks
- Revenue declining year-over-year (-1.3%) suggesting softening market demand or competitive pressures
- Diluted EPS contracted sharply (-27.7% YoY) despite positive net income, indicating share dilution or tax headwinds
- Operating margin compression risk in cyclical engines industry during economic slowdowns
- High insider activity (28 Form 4 filings) warrants monitoring for potential confidence signals or equity compensation dilution
- Revenue and net income are both declining year over year, indicating softer near-term demand or margin pressure
- Diluted EPS fell much faster than net income, which may point to dilution or non-operating headwinds
- Industrial and engine markets are cyclical, which can pressure earnings quality during downturns
Key Metrics to Watch
- Revenue trend reversal - critical to confirm stabilization or growth resumption
- Operating margin sustainability - monitor for further compression below 12%
- Free cash flow conversion ratio - ensure FCF remains above $2.2B annually
- Debt-to-equity trajectory - watch for leverage increase above 0.70x threshold
- Revenue growth and operating margin trend
- Free cash flow generation and EPS trend
Cummins Inc. (CMI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Cummins Inc. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
CMI Profit Margin, ROE & Profitability Analysis
CMI vs Market Sector: How Cummins Inc. Compares
How Cummins Inc. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Cummins Inc. Stock Overvalued? CMI Valuation Analysis 2026
Based on fundamental analysis, Cummins Inc. has mixed fundamental signals relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Cummins Inc. Balance Sheet: CMI Debt, Cash & Liquidity
CMI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Cummins Inc.'s revenue has grown significantly by 42% over the 5-year period, indicating strong business expansion. The most recent EPS of $5.15 reflects profitable operations.
CMI Revenue Growth, EPS Growth & YoY Performance
CMI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $8.3B | $559.0M | $3.86 |
| Q2 2025 | $8.6B | $752.0M | $5.26 |
| Q1 2025 | $8.2B | $850.0M | $5.96 |
| Q3 2024 | $8.4B | $690.0M | $4.59 |
| Q2 2024 | $8.6B | $737.0M | $5.05 |
| Q1 2024 | $8.4B | $806.0M | $5.55 |
| Q3 2023 | $7.3B | $409.0M | $2.82 |
| Q2 2023 | $6.6B | $707.0M | $4.94 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Cummins Inc. Dividends, Buybacks & Capital Allocation
CMI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Cummins Inc. (CIK: 0000026172)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CMI
What is the AI rating for CMI?
Cummins Inc. (CMI) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CMI's key strengths?
Claude: Strong return on equity (23%) and return on assets (8.4%) indicating efficient capital deployment. Solid free cash flow generation ($2.4B) covering capex 2x over with 7.1% FCF margin. ChatGPT: Solid profitability with 25.3% gross margin, 12.0% operating margin, and 8.4% net margin. Healthy financial position supported by 1.76x current ratio, 0.61x debt/equity, and 12.2x interest coverage.
What are the risks of investing in CMI?
Claude: Revenue declining year-over-year (-1.3%) suggesting softening market demand or competitive pressures. Diluted EPS contracted sharply (-27.7% YoY) despite positive net income, indicating share dilution or tax headwinds. ChatGPT: Revenue and net income are both declining year over year, indicating softer near-term demand or margin pressure. Diluted EPS fell much faster than net income, which may point to dilution or non-operating headwinds.
What is CMI's revenue and growth?
Cummins Inc. reported revenue of $33.7B.
Does CMI pay dividends?
Cummins Inc. pays dividends, with $1,055.0M distributed to shareholders in the trailing twelve months.
Where can I find CMI SEC filings?
Official SEC filings for Cummins Inc. (CIK: 0000026172) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CMI's EPS?
Cummins Inc. has a diluted EPS of $20.50.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CMI a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Cummins Inc. has a BUY rating with 74% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is CMI stock overvalued or undervalued?
Valuation metrics for CMI: ROE of 23.0% (sector avg: 15%), net margin of 8.4% (sector avg: 12%). Higher ROE suggests strong returns relative to peers.
Should I buy CMI stock in 2026?
Our dual AI analysis gives Cummins Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CMI's free cash flow?
Cummins Inc.'s operating cash flow is $3.6B, with capital expenditures of $1.2B. FCF margin is 7.1%.
How does CMI compare to other Market stocks?
Vs Default sector averages: Net margin 8.4% (avg: 12%), ROE 23.0% (avg: 15%), current ratio 1.76 (avg: 1.8).