Cummins Inc. offers various power solutions worldwide. The company operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS. Shaded region = analyst consensus for the current and next fiscal year (12 analysts).
| Parameter | BaseValue |
|---|---|
Initial Cash Flow | |
| Growth Rate (Yr 1-5) | % |
| Growth Rate (Yr 6-10) | % |
| Terminal Growth Rate | % |
| Discount Rate | % |
Base Case $670.57 Implied EV: $97.59B |
What growth rate is the market pricing in at $717?
The market implies +15.9% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +18.3%, reflecting heavy growth investment expected to generate future returns.
Narrow moat with reinvestment efficiency as the key competitive advantage. Improving revenue predictability would strengthen the moat.
"Market is optimistic — be cautious and ensure you have a margin of safety"
Near fair value but market is greedy — optimism is already priced in
