Cummins Inc (CMI, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $284.37, Cummins Inc has witnessed a daily gain of 3.47%, marked against a three-month change of 17.85%. A thorough analysis, underlined by the GF Score, suggests that Cummins Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 7/10
- Momentum rank: 10/10
Considering these components, GuruFocus assigned Cummins Inc a GF Score of 94 out of 100, which signals the highest outperformance potential.
Understanding Cummins Inc's Business
Cummins Inc (CMI, Financial), with a market cap of $40.34 billion and sales of $34.07 billion, is the leading manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, as well as standby and prime power generators. The company also sells powertrain components, including transmissions, turbochargers, aftertreatment systems, and fuel systems. Despite robust competition and increasing government regulation of carbon emissions, Cummins Inc has maintained its leadership position in the industry.
Financial Strength Breakdown
According to the Financial Strength rating, Cummins Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With a favorable Debt-to-Revenue ratio of 0.21, Cummins Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Cummins Inc's impressive standing among its peers in generating profit. Cummins Inc's strong Predictability Rank of 3.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Cummins Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 21.5%, which outperforms better than 82.27% of 2764 companies in the Industrial Products industry. Moreover, Cummins Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years, highlighting the company's continued capability to drive growth.
Next Steps
Considering Cummins Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen. As Cummins Inc continues to navigate the competitive landscape with its robust financials and strategic growth initiatives, it remains a compelling choice for value investors seeking market outperformance.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
