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What do the Fundamentals Predict for Cummins Inc. (CMI) Stock?

Tuesday, October 26, 2021 02:51 PM | InvestorsObserver Analysts
What do the Fundamentals Predict for Cummins Inc. (CMI) Stock?

Cummins Inc. (CMI) receives a strong valuation score of 83 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. CMI holds a better value than 83% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

Valuation Rank - 83
CMI gets a 83 Valuation Rank today. Find out what this means to you and get the rest of the rankings on CMI!

Metrics Analysis

CMI has a trailing twelve month Price to Earnings (PE) ratio of 16.2 which places it around the histroical average of roughly 15. CMI is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. CMI's trailing-12-month earnings per share (EPS) of 14.89 does justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far. CMI currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.33. The market is currently overvaluing CMI in relation to its projected growth due to the PEG ratio being above the fair market value of 1. CMI's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

CMI' has a weak valuation at its current share price on account of a overvalued PEG ratio despite strong growth. CMI's PE and PEG are worse than the market average leading to a below average valuation score. Click Here to get the full Report on Cummins Inc. (CMI) stock.

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