How Does This Engine Maker Operate?
Cummins Inc designs and manufactures engines and power systems for a range of equipment and vehicle applications. The company also supports its installed base through parts and service activity tied to that equipment in the field. Its operations sit within the machinery space and are built around producing and supporting complex, long-life powertrain and power solutions. With an established industrial footprint, the business is oriented around both original equipment demand and ongoing aftermarket needs.
Are Margins and Returns Holding Steady?
FundamentalsFor 2025, reported in USD, revenue was about USD 33.7 billion, with EBIT of roughly USD 4.0 billion and net income of around USD 3.0 billion. Over the same period, the business ran at a 25.29% gross margin, an 11.95% operating margin, and an 8.44% net profit margin, while ROE over the trailing period measured 24.13%.
Cash conversion in the period is framed by a cash flow proxy of about USD 2.9 billion, alongside USD 1.1 billion of depreciation and amortization and USD 1.2 billion of capital spending. The balance sheet shows USD 2.8 billion of cash against USD 447 million of total debt.
Is The Market Paying Too Much?
DCF / MultiplesAt USD 615.56 per share, the stock trades above the central DCF estimate of USD 481.87, between a lower estimate of USD 320.91 and an upper estimate of USD 662.11. Headline pricing also reflects a 29.98 trailing P/E and 23.53 EV/EBITDA, alongside a 2.53 price-to-sales multiple.
Efficiency Supports The Price
TakeawayOperations are producing healthy margins and a high ROE. The price leans on that efficiency staying in place. Returns need to remain strong without heavier capital demands. If margins slip, the valuation can reset quickly.