Cummins Inc Intrinsic Value Calculation – CUMMINS INC Reports Second Quarter Earnings Results for FY2023
August 4, 2023
🌥️Earnings Overview
On August 3, 2023, CUMMINS INC ($NYSE:CMI) reported its financial results for the second quarter of FY2023 ending on June 30, 2023, with total revenue amounting to USD 8638.0 million, a 31.2% increase compared to the same period in the previous year. Net income for the quarter was USD 720.0 million, representing a 2.6% YoY growth.
Share Price
The stock opened at $237.1 and closed at $242.6, which was a 7.5% decrease from the previous closing price of $262.2. The company showed overall growth in the quarter, but the stock dropped significantly on the news. In addition to the financial results, CUMMINS INC also announced plans to invest in its core businesses in order to improve profitability and market share. It is also continuing to focus on cost optimization and efficiency initiatives to reduce expenses and improve margins.
Despite these efforts, the company’s stock price dropped 7.5%, due in part to the overall market decline. Overall, CUMMINS INC reported strong quarterly earnings results despite the stock price drop and has plans in place to continue to grow and improve profitability in the future. Investors should take this into account when making their investing decisions. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cummins Inc. More…
| Total Revenues | Net Income | Net Margin |
| 32.19k | 2.54k | 7.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cummins Inc. More…
| Operations | Investing | Financing |
| 2.18k | -4.2k | 1.46k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cummins Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 31.73k | 20.38k | 73.02 |
Key Ratios Snapshot
Some of the financial key ratios for Cummins Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 16.8% | 19.2% | 11.5% |
| FCF Margin | ROE | ROA |
| 3.5% | 23.2% | 7.3% |
Analysis – Cummins Inc Intrinsic Value Calculation
At GoodWhale, we have conducted an analysis of CUMMINS INC‘s financials. Our proprietary Valuation Line has calculated the intrinsic value of CUMMINS INC’s share to be around $287.0. Currently, CUMMINS INC’s stock is being traded at a price of $242.6, which is a fair price that is undervalued by 15.5%. More…
Peers
Cummins Inc is one of the world’s leading manufacturers of engines and related technologies. The company’s products are used in a wide range of applications, including on-highway trucks, construction equipment, power generation, and marine. Cummins Inc has a strong competitive position in the markets it serves, and is constantly striving to improve its products and technologies to maintain this position. The company’s main competitors are Parker Hannifin Corp, Greenland Technologies Holding Corp, Hydraulic Elements and Systems AD.
– Parker Hannifin Corp ($NYSE:PH)
Parker Hannifin Corporation is an American corporation that specializes in motion and control technologies. Parker Hannifin is the world’s largest producer of hydraulic pumps and motors, and it is a major manufacturer of pneumatic cylinders, valves, and other motion-control products. The company has over 60,000 employees in 50 countries, and its products are used in a variety of industries, including aerospace, climate control, electromechanical, filtration, fluid and gas handling, hydraulics, pneumatics, process control, and sealing and shielding.
– Greenland Technologies Holding Corp ($NASDAQ:GTEC)
Greenland Technologies Holding Corp is a leading manufacturer of electronic products and components. The company has a market cap of 26.29M as of 2022 and a return on equity of 8.97%. Greenland Technologies Holding Corp designs, manufactures and sells a broad range of electronic products and components, including semiconductors, printed circuit boards, personal computers, cellphone handsets, digital cameras, and other consumer electronics products.
– Hydraulic Elements and Systems AD ($LTS:0NZ4)
AD is a diversified industrial company that operates in a variety of businesses, including Hydraulic Elements and Systems, Fluid Power, and Filtration. The company has a market cap of 122.81M as of 2022 and a Return on Equity of 13.72%. AD’s Hydraulic Elements and Systems business provides a wide range of products and services to a variety of industries, including construction, mining, and agricultural equipment. The company’s Fluid Power business provides hydraulic and pneumatic components and systems to a variety of industries, including the automotive, aerospace, and defense sectors. The company’s Filtration business provides filtration products and services to a variety of industries, including the food and beverage, pharmaceutical, and oil and gas industries.
Summary
Cummins Inc. reported strong second quarter earnings results for the fiscal year ending June 30 2023, with total revenues of $8638.0 million, a 31.2% increase year over year, and net income of $720.0 million, a 2.6% increase. Despite the positive figures, the stock price of Cummins Inc. dipped the same day. This could be due to investors expecting even better performance or perhaps a reaction to external factors such as the general market.
Despite the negative stock movement, investors should still take into account the strong financial results which suggest Cummins Inc. is on a healthy trajectory for growth. Moving forward, it may be worthwhile to closely monitor the company’s performance as indicators of future profits and potential value in its stock.
