Cummins Stock Valuation

CMI -  USA Stock  

USD 207.01  4.32  2.13%

Do you want to know what the current value of Cummins is today? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Cummins, is its stock price multiplied by the total number of shares outstanding, calculating Cummins' enterprise value requires a different approach. It uses Cummins' balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
The current Free Cash Flow is estimated to increase to about 1.7 B, while Enterprise Value is projected to decrease to roughly 31.7 B.
Cummins shows a prevailing Real Value of $240.68 per share. The current price of the firm is $207.01. At this time, the firm appears to be undervalued. Our model approximates the value of Cummins from analyzing the firm fundamentals such as Profit Margin of 8.87 %, return on equity of 23.53 %, and Current Valuation of 34.18 B as well as examining its technical indicators and Probability Of Bankruptcy. In general, we favor locking in undervalued instruments and disposing overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
Cummins Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Cummins's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.
Today 207.01
Please note that Cummins' price fluctuation is very steady at this time. Calculation of the real value of Cummins is based on 3 months time horizon. Increasing Cummins' time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Cummins is useful when determining the fair value of the Cummins stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Cummins. Since Cummins is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Cummins Stock. However, Cummins' intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
Real Value
Estimating the potential upside or downside of Cummins helps investors to forecast how Cummins stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Cummins more accurately as focusing exclusively on Cummins' fundamentals will not take into account other important factors:
Estimates (8)
LowProjected EPSHigh
LowEstimated ValueHigh
Annual Dividend
LowIncome Per ShareHigh
13 Analysts
LowTarget PriceHigh
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Cummins' intrinsic value based on its ongoing forecasts of Cummins' financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Cummins' closest peers. When choosing an evaluation method for Cummins, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Cummins Investments

1.92 Billion


Cummins Valuation Drivers Correlation

Many accounts on the financial statements of Cummins are highly interrelated and sometimes correlated. Consequently, when conducting Cummins's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Cummins
Click cells to compare fundamentals

Cummins Valuation Trend

Knowing Cummins' actual value is paramount for traders to make sound investment determinations. Cummins' real value is not only important for the investor to make better decisions but also for a more accurate overall view of Cummins' financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Cummins' enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Cummins Market Cap

Cummins is rated second in market capitalization category among related companies. Market capitalization of Specialty Industrial Machinery industry is currently estimated at about 116.88 Billion. Cummins totals roughly 28.99 Billion in market capitalization claiming about 25% of equities listed under Specialty Industrial Machinery industry.
Capitalization  Total debt  Workforce  Revenue  Valuation

Cummins Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Cummins's current stock value. Our valuation model uses many indicators to compare Cummins value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Cummins competition to find correlations between indicators driving Cummins's intrinsic value. More Info.
Cummins is number one stock in last dividend paid category among related companies. It is rated below average in beta category among related companies totaling about  0.18  of Beta per Last Dividend Paid. The ratio of Last Dividend Paid to Beta for Cummins is roughly  5.63 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Cummins by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Cummins' Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Cummins' earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Cummins' worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Cummins and how it compares across the competition.

About Cummins Valuation

The equity valuation mechanism determines the current worth of Cummins on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Cummins. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Cummins based exclusively on its fundamental and basic technical indicators. By analyzing Cummins's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Cummins's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Cummins. We calculate exposure to Cummins's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Cummins's related companies.
Last ReportedProjected for 2022
Gross Profit5.7 B5.9 B
Profit Margin 0.09  0.08 
Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. Cummins Inc. was founded in 1919 and is headquartered in Columbus, Indiana. Cummins operates under Specialty Industrial Machinery classification in the United States and is traded on New York Stock Exchange. It employs 59900 people.

Cummins Quarterly Enterprise Value

30.78 Billion

Cummins' stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Cummins' value is low or high relative to the company's performance and growth projections. Determining the market value of Cummins can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Cummins represents a small ownership stake in the entity. As a stockholder of Cummins, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Cummins Dividends Analysis For Valuation

Please note that Cummins has scaled down on payment of dividends at this time. Cummins Earnings Before Interest Taxes and Depreciation Amortization EBITDA are most likely to increase significantly in the upcoming years. The last year's value of Earnings Before Interest Taxes and Depreciation Amortization EBITDA was reported at 3.49 Billion. The current Earnings before Tax is estimated to increase to about 2.8 B, while Accumulated Retained Earnings Deficit are projected to decrease to roughly 15.3 B.
There are various types of dividends Cummins can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Cummins shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Cummins directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Cummins pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Cummins by the value of the dividends paid out.

Cummins Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Cummins does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quick Ratio1.03
Earnings Quarterly Growth-21.40%
Revenue Growth0.30%
Payout Ratio38.33%
Enterprise Value To Ebitda11.51
Earnings Growth-18.60%
Enterprise Value To Revenue1.42

Cummins Current Valuation Indicators

Valuation refers to the process of determining the present value of Cummins and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Cummins we look at many different elements of the entity such as Cummins's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Cummins' valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Cummins' valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Cummins, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Cummins' valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Cummins' worth.
Continue to Trending Equities. Note that the Cummins information on this page should be used as a complementary analysis to other Cummins' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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When running Cummins price analysis, check to measure Cummins' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Cummins is operating at the current time. Most of Cummins' value examination focuses on studying past and present price action to predict the probability of Cummins' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Cummins' price. Additionally, you may evaluate how the addition of Cummins to your portfolios can decrease your overall portfolio volatility.
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Is Cummins' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Cummins. If investors know Cummins will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Cummins listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Cummins is measured differently than its book value, which is the value of Cummins that is recorded on the company's balance sheet. Investors also form their own opinion of Cummins' value that differs from its market value or its book value, called intrinsic value, which is Cummins' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Cummins' market value can be influenced by many factors that don't directly affect Cummins' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Cummins' value and its price as these two are different measures arrived at by different means. Investors typically determine Cummins value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Cummins' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.