MMarketMath

CMI

StalwartQuality: High (76/100)

Cummins · Industrials · Construction Machinery & Heavy Transportation Equipment

$571.62

52w 389.52 – 737.76

20y monthly, adjusted

Mkt cap

$78.7B

P/E

27.4

P/FCF

33.9

FCF yield

2.9%

ROE

23.9%

Shldr yield

1.3%

div 1.3% + bb 0.0%

What today's price assumes

At $78.7B, the market is pricing in 14.9% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 6.1% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $264 · $308 · $384 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 9.2× across 18 years, CMI would trade near $242/share (25th–75th percentile: $188–$328); it trades at 21.7× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

+6.2%

Rev 5y

+11.2%

Rev 10y

+5.8%

EPS 5y

+11.3%

EPS 10y

+10.1%

FCF 5y

+1.7%

FCF 10y

+6.1%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $13.0B
2008: $14.3B
2009: $10.8B
2010: $13.2B
2011: $18.0B
2012: $17.3B
2013: $17.3B
2014: $19.2B
2015: $19.1B
2016: $17.5B
2017: $20.4B
2018: $23.8B
2019: $23.6B
2020: $19.8B
2021: $24.0B
2022: $28.1B
2023: $34.1B
2024: $34.1B
2025: $33.7B
$0$10.0B$20.0B$30.0B
07
11
15
19
23

Net income

2007: $739.0M
2008: $755.0M
2009: $428.0M
2010: $1.0B
2011: $1.9B
2012: $1.7B
2013: $1.6B
2014: $1.7B
2015: $1.5B
2016: $1.5B
2017: $994.0M
2018: $2.2B
2019: $2.3B
2020: $1.8B
2021: $2.2B
2022: $2.2B
2023: $840.0M
2024: $4.1B
2025: $3.0B
$0$2.0B$4.0B
07
11
15
19
23

Free cash flow

2007: $457.0M
2008: $444.0M
2009: $827.0M
2010: $642.0M
2011: $1.5B
2012: $842.0M
2013: $1.4B
2014: $1.5B
2015: $1.3B
2016: $1.4B
2017: $1.8B
2018: $1.7B
2019: $2.5B
2020: $2.2B
2021: $1.5B
2022: $1.0B
2023: $2.8B
2024: $279.0M
2025: $2.4B
$0$1.0B$2.0B
07
11
15
19
23

Diluted shares (lower is better)

2008: 196.5M
2009: 197.7M
2010: 197.1M
2011: 193.6M
2012: 189.7M
2013: 187.4M
2014: 183.1M
2015: 178.4M
2016: 169.3M
2017: 167.3M
2018: 162.8M
2019: 156.1M
2020: 149.0M
2021: 145.9M
2022: 142.3M
2023: 142.7M
2024: 139.1M
2025: 138.7M
050.0M100.0M150.0M
07
11
15
19
23

Margins

0%10%20%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $424.0M
2008: $250.0M
2009: $161.0M
2010: $413.0M
2011: $884.0M
2012: $596.0M
2013: $801.0M
2014: $1.2B
2015: $1.5B
2016: $1.5B
2017: $1.2B
2018: $1.9B
2019: $2.0B
2020: $1.4B
2021: $2.2B
2022: $1.2B
2023: $921.0M
2024: $969.0M
2025: $1.1B
$0$1.0B$2.0B
07
11
15
19
23

Cash vs long-term debt

$0$2.0B$4.0B$6.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $8.6B
Q3'23: $8.4B
Q4'23: $8.5B
Q1'24: $8.4B
Q2'24: $8.8B
Q3'24: $8.5B
Q4'24: $8.4B
Q1'25: $8.2B
Q2'25: $8.6B
Q3'25: $8.3B
Q4'25: $8.5B
Q1'26: $8.4B
Q2'26: $9.5B
$0$2.5B$5.0B$7.5B
23
24
24
25
26

Net income by quarter

Q2'23: $737.0M
Q3'23: $690.0M
Q4'23: −$1.4B
Q1'24: $2.0B
Q2'24: $752.0M
Q3'24: $843.0M
Q4'24: $445.0M
Q1'25: $850.0M
Q2'25: $928.0M
Q3'25: $559.0M
Q4'25: $620.0M
Q1'26: $680.0M
Q2'26: $968.0M
−$1.0B$0$1.0B$2.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$9.5B+9.4%$968.0M+4.3%6.73$1.5B
Q1'26$8.4B+2.7%$680.0M−20.0%4.71$309.0M
Q4'25 *$8.5B+1.1%$620.0M+39.3%4.25$1.5B
Q3'25$8.3B−1.6%$559.0M−33.7%3.86$1.3B
Q2'25$8.6B−1.7%$928.0M+23.4%6.43$785.0M
Q1'25$8.2B−2.7%$850.0M−58.1%5.96−$3.0M
Q4'24 *$8.4B−1.1%$445.0M—3.22$1.4B
Q3'24$8.5B+0.3%$843.0M+22.2%5.86$640.0M
Q2'24$8.8B+1.8%$752.0M+2.0%5.26−$851.0M
Q1'24$8.4B−0.6%$2.0B+151.6%14.03$276.0M
Q4'23 *$8.5B+9.9%−$1.4B−316.3%-10.04$1.5B
Q3'23$8.4B+15.0%$690.0M+68.7%4.59$1.5B
Q2'23$8.6B+31.2%$737.0M+4.2%5.05$483.0M

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue+6.2%+11.2%+5.8%+6.4%
Operating cash flow+22.7%+5.9%+5.8%+8.9%
Free cash flow+31.6%+1.7%+6.1%+9.1%
EPS (diluted)+10.7%+11.3%+10.1%+9.5%
Equity+11.2%+8.9%+5.2%+6.7%
LT debt+14.7%+13.5%+15.7%+17.1%
Diluted shares−0.9%−1.4%−2.5%−2.3%
Stock price+38.0%+22.0%+19.3%+15.7%

$100, 3 years ago

$263vs $176 in SPY

38.0% vs 20.7%/yr

$100, 5 years ago

$271vs $181 in SPY

22.0% vs 12.6%/yr

$100, 10 years ago

$584vs $412 in SPY

19.3% vs 15.2%/yr

$100, 15 years ago

$886vs $813 in SPY

15.7% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$6.45

$49.0B created / $7.6B retained

Last 10 years

$5.33

$67.6B created / $12.7B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

18.9%

OCF ÷ (equity + debt)

OCF / EV yield

4.3%

MC vs 10× OCF

2.23

≤1 = priced under 10× OCF

Debt / FCF

2.8y

SBC / FCF

3.9%

Owner earnings

$2.3B

OCF − capex − SBC

OE yield

2.8%

Share count 5y

−2.0%

per year; negative = buybacks

Capital intensity

20.7%

net PP&E ÷ revenue

Sales efficiency

$0.20

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 60.4% of operating cash flow at an incremental return of 11.2% — an organically fundable growth rate of about 6.8% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

19 of 27 checks pass · 70%. Checks with structurally missing inputs are excluded.

Growth & Consistency

4/7

  • Revenue growth

    11.2% · 5y CAGR ≥ 5%

    pass

  • EPS growth

    11.3% · 5y CAGR ≥ 5%

    pass

  • FCF growth

    1.7% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    6 of 9 · up in ≥ 7 of last 10 years

    fail

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    5.9% vs 11.2% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

7/7

  • Net margin

    8.8% · ≥ 8%

    pass

  • Operating margin

    12.0% · ≥ 10%

    pass

  • Gross margin stable or rising

    25.3% vs 23.9% · no drop > 2 pts over 3y

    pass

  • Return on equity

    23.9% · ≥ 12%

    pass

  • Cash ROIC

    18.9% · ≥ 12%

    pass

  • FCF margin

    7.1% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $3.6B vs NI $3.0B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

4/5

  • Debt payable from cash flow

    2.8y · LT debt ≤ 3× FCF

    pass

  • Cash cushion

    42% · cash ≥ 50% of LT debt

    fail

  • Leverage

    0.55 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $12.3B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    8% · interest ≤ 15% of operating income

    pass

Capital Allocation

4/4

  • Share count flat or shrinking

    -2.0% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    4% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    44% · dividends + buybacks ≤ 100% of FCF

    pass

  • Repurchases are a habit

    7 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

0/4

  • FCF yield

    2.9% · ≥ 3%

    fail

  • Earnings multiple

    27.4 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    14.9% vs 6.1% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    1.3% · dividends + buybacks ≥ 2% of market cap

    fail

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202533,6708,5164,0252,95720.503,6211,2352,3861,055—932,8456,79212,349139
202434,1028,4393,7504,06828.371,4871,20827996901001,6714,78410,271139
202334,0658,2491,7618405.153,9661,2132,7539210792,1794,8028,850143
202228,0746,7192,9292,18315.121,9629161,046855374332,1014,4988,975142
202124,0215,6952,7062,16414.612,2567341,5228091,402372,5923,5798,146146
202019,8114,8942,2691,81112.012,7225282,194782641313,4013,6108,062149
201923,5715,9802,7002,26814.483,1817002,4817611,271491,1291,5767,507156
201823,7715,7372,7862,18713.152,3787091,6697181,140531,3031,5977,348163
201720,4285,1002,3349945.972,2775061,771701451411,3691,5887,259167
201617,5094,4581,8801,4568.231,9395311,408676778321,1201,5686,875169
201519,1104,9472,0571,4707.842,0657441,321622900241,7111,5767,406178
201419,2214,8612,3651,7369.022,2667431,523512670362,3011,5777,749183
201317,3014,2802,1011,5887.912,0896761,413420381372,6991,6307,510187
201217,3344,4162,2541,7388.671,532690842340256361,3696536,603190
201118,0484,5892,6811,9469.552,0736221,451255629421,4846385,492194
201013,2263,1681,6021,0405.281,006364642172241221,0236364,670197
200910,8002,1696824282.161,13731082714120209305613,773198
200814,3422,9401,2727553.84987543444122128284266293,234197
200713,0482,5561,1587393.708103534578933528577—3,702—

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

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