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Cummins (CMI) On Data Center Demand And A Pullback That Still Looks Undervalued

Simply Wall St · 1d ago

Cummins (CMI) has drawn fresh attention after recent trading that leaves the stock down about 8% over the past month and about 28% over the past 3 months, despite positive annual revenue and net income growth.

For context, Cummins shares are only slightly positive year to date with a 0.5% share price gain. However, the longer-term picture is much stronger, with a 1-year total shareholder return of 27.4% and a 5-year total shareholder return of 155.1%, which signals fading short-term momentum against a still robust long-term record.

Scan beyond Cummins and explore other industrial heavyweights with shifting momentum using our curated list of 39 power grid technology and infrastructure stocks for potential ideas in the same broader theme.

Bulls point to Cummins’ revenue and profit growth, as well as its long record of shareholder returns. Bears highlight the recent 3 month slide. Which story does the current valuation support next?

Most Popular Narrative: 30% Undervalued

Against a last close of $524.65, the most followed narrative pegs Cummins' fair value at about $748.81. The current pullback therefore sits against a materially higher long term estimate built on specific growth drivers and risks.

Cummins is experiencing strong and steadily growing demand for power generation equipment, especially from the data center sector, driven by increasing urbanization, digital infrastructure expansion, and the global shift toward cleaner, efficient energy solutions. This diversification is lifting revenue and supporting higher EBITDA margins, offsetting softness in the traditional truck markets.

See why 58 investors see Cummins as 30% undervalued.

Result: Fair Value of $748.81 (UNDERVALUED)

Still, the Cummins narrative can break if North American heavy and medium duty truck demand weakens further, or if regulatory and tariff uncertainty keeps costs elevated longer.

Find out about the key risks to this Cummins narrative.

Next Steps

Optimistic about what you have read on Cummins but still unsure what matters most for your own portfolio? Move quickly and review the key positives in the 4 key rewards.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.