📊 CMI Key Takeaways
Is Cummins Inc. (CMI) a Good Investment?
Cummins exhibits concerning fundamental deterioration with revenue declining 1.3% YoY and net income falling 3.9%, while EPS dropped 27.7%, indicating margin compression and operational challenges. The company's abysmal ROE of 5.3% and ROA of 1.9% reflect poor capital efficiency in a capital-intensive industry facing structural headwinds from electrification. Weak free cash flow conversion of 1.4% signals operational stress.
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
- Established market position with $8.4B revenue base and 11.3% operating margin demonstrating scale and operational efficiency
- Strong liquidity with 1.71x current ratio and $2.6B cash providing near-term financial flexibility
- Manageable leverage with 0.62x debt-to-equity ratio creating financial runway for strategic adjustments
- 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
- Declining revenues with accelerating net income erosion (3.9% YoY) and 27.7% EPS decline indicating severe margin compression
- Extremely poor capital returns with ROE of 5.3% and ROA of 1.9% reflecting inefficient asset utilization and operational strain
- Weak free cash flow generation at 1.4% margin insufficient to support debt obligations and investments amid industry electrification transition
- 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
- Free cash flow conversion rate and operating cash flow trends as primary indicators of business fundamentals
- Return on equity trajectory from severely depressed 5.3% level indicating capital efficiency recovery
- Revenue stabilization and gross margin defense amid electrification and competitive pressures
- Revenue growth and operating margin trend
- Free cash flow generation and EPS trend
Cummins Inc. (CMI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 1.4% FCF margin may limit capital allocation flexibility.
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 |
|---|---|---|---|
| Q1 2026 | $8.2B | $680.0M | $4.71 |
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 HOLD from Claude (SELL) and ChatGPT (BUY) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CMI's key strengths?
Claude: Established market position with $8.4B revenue base and 11.3% operating margin demonstrating scale and operational efficiency. Strong liquidity with 1.71x current ratio and $2.6B cash providing near-term financial flexibility. 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: Declining revenues with accelerating net income erosion (3.9% YoY) and 27.7% EPS decline indicating severe margin compression. Extremely poor capital returns with ROE of 5.3% and ROA of 1.9% reflecting inefficient asset utilization and operational strain. 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 $8.4B.
Does CMI pay dividends?
Cummins Inc. pays dividends, with $276.0M 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 $4.71.
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 May 2026, Cummins Inc. has a HOLD rating with 74% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CMI stock overvalued or undervalued?
Valuation metrics for CMI: ROE of 5.3% (sector avg: 15%), net margin of 7.8% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy CMI stock in 2026?
Our dual AI analysis gives Cummins Inc. a combined HOLD 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 $309.0M, with capital expenditures of $189.0M. FCF margin is 1.4%.
How does CMI compare to other Market stocks?
Vs Default sector averages: Net margin 7.8% (avg: 12%), ROE 5.3% (avg: 15%), current ratio 1.71 (avg: 1.8).