MeritValue

CUMMINS INC

CMIdata completeness 100%19 fiscal years on file
The thesis, from the filings

CUMMINS INC earns about 30% on invested capital, far above its ~9% cost of capital, and has bought back 5% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $163.1 and $788.14 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$24B1$28.1B2$34.1B3$34.1B3$33.7B3
Net income$2.16B4$2.18B5$840M6$4.07B6$2.96B6
Operating cash flow$2.26B7$1.96B8$3.97B9$1.49B9$3.62B9
Capital expenditure$734M10$916M11$1.21B12$1.21B12$1.24B12
Free cash flow (derived)$1.52B7$1.05B8$2.75B9$279M9$2.39B9
Total debt$372M13$3.15B14$1.61B15$1.92B16$447M16
Cash & equivalents$2.59B17$2.1B17$2.18B18$1.67B18$2.85B18
Diluted shares145.9M142.3M142.7M139.1M138.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$890.34
your share of equity
Profit it earned you last year
$213.19
Free cash flow it threw off
$172.03
Debt you’d be carrying
$32.23

10 shares is a claim on $890.34 of net worth that earned you $213.19 and generated $172.03 of cash last year, against $32.23 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
30% avg · 5y
FY21 38%FY22 23%FY23 12%FY24 42%FY25 32%

It earned about 30% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−5% shares · 5y

Share count is down 5% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 20% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $163.1 and $788.14 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$788.14
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth16.2%
  • fcfBase$2.39B
DCF · Growth Exit 5Y
$500.21
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth16.2%
  • fcfBase$2.39B
Earnings Power Value
$163.1
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$2.18B
  • growthAssumed0.0%
Graham Number
$202.65
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years16.2%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $500.21
The three cases
Bear0.0%$263.08
Base16.2%$500.21
Bull20.0%$578.16

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 16.2%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000026172-24-000012 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000026172-25-000007 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0000026172-26-000009 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000026172-24-000012 (ProfitLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000026172-25-000007 (ProfitLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000026172-26-000009 (ProfitLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000026172-24-000012 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000026172-25-000007 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000026172-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000026172-24-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000026172-25-000007 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000026172-26-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000026172-23-000005 (LongTermDebtCurrent)
  14. 10-K · period ending 2022-12-31 · accession 0000026172-24-000012 (LongTermDebtCurrent)
  15. 10-K · period ending 2023-12-31 · accession 0000026172-25-000007 (LongTermDebtCurrent)
  16. 10-K · period ending 2024-12-31 · accession 0000026172-26-000009 (LongTermDebtCurrent)
  17. 10-K · period ending 2021-12-31 · accession 0000026172-23-000005 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-31 · accession 0000026172-26-000009 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)