Cummins Inc. (CMI) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-42.5%

$291.76

vs $507.47 price

Levered DCF

$176.16

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

4.42

Safe zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	24.76×	12.21×	46.16×	15.94×	14.8×	18.82×	12.31×	10.12×
P/B	5.7×	4.69×	3.84×	3.82×	3.72×	4.17×	3.7×	2.95×
P/S	2.09×	1.41×	1×	1.22×	1.31×	1.7×	1.18×	0.91×
EV / EBITDA	14.02×	8.54×	12.88×	10.66×	9.52×	11.21×	8.17×	6.57×
Gross margin	25.3%	24.7%	24.2%	23.9%	23.7%	24.7%	25.4%	24.1%
Operating margin	12.0%	11.0%	5.2%	10.4%	11.3%	11.5%	11.5%	11.7%
Net margin	8.4%	11.6%	2.2%	7.7%	8.9%	9.0%	9.6%	9.0%
Current ratio	1.76×	1.31×	1.18×	1.27×	1.74×	1.88×	1.5×	1.54×
Debt / equity	0.66×	0.74×	0.81×	0.93×	0.54×	0.57×	0.38×	0.34×
Interest coverage	12.23×	10.14×	4.7×	14.72×	24.38×	22.69×	24.77×	24.44×
Dividend yield	1.5%	2.0%	2.7%	2.5%	2.6%	2.3%	2.7%	3.3%
Payout ratio	37.1%	24.6%	125.3%	39.7%	38.0%	43.7%	33.7%	33.5%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	23.0%	38.4%	8.3%	24.0%	25.1%	22.2%	30.1%	29.1%
Return on invested capital	11.9%	13.7%	4.3%	10.1%	12.3%	10.4%	15.0%	16.3%
Return on assets	8.4%	12.5%	2.3%	7.1%	9.0%	7.9%	11.5%	11.2%
Free cash flow yield	3.4%	0.6%	8.1%	3.1%	4.7%	6.4%	8.7%	7.4%
Earnings yield	4.0%	8.2%	2.2%	6.3%	6.8%	5.3%	8.1%	9.9%
Enterprise value	$75.7B	$54.1B	$39B	$40.5B	$33.6B	$34.9B	$29.5B	$22.8B
Net debt / EBITDA	0.98×	0.94×	1.66×	1.64×	0.57×	0.39×	0.48×	0.34×
Cash conversion cycle (days)	92	81	80	91	87	85	77	78