AI Stock Analysis: Is CMI a Buy?

July 11, 6:22 am

Cummins Inc. is a global power technology leader that designs, manufactures, distributes, and services a broad portfolio of power solutions. The company’s products range from diesel and natural gas engines to hybrid and electric platforms, as well as related technologies including battery systems, fuel systems, controls, air handling, automated transmissions, electric power generation systems, and components. Cummins has a presence in over 190 countries, serving various industries such as automotive, construction, mining, marine, and oil and gas.

Price & AI Score for CMI.

Fundamental Analysis

The revenue for Cummins in the last quarter was $8.4 billion, representing a decrease of 1.64% compared to the previous quarter and a decrease of 0.59% compared to the same quarter last year. Although this marginal decline in revenue suggests some short-term concerns, it is not overly alarming in the long run.

Net income for the last quarter was $1.99 billion, marking a significant increase of 239.27% compared to the previous quarter and 152.28% year over year. The substantial growth in net income indicates strong financial management and operational efficiency, which investors find encouraging.

EBITDA for the last quarter reached $2.54 billion, a substantial increase of 543.53% from the previous quarter and 88.62% year over year. This impressive growth in EBITDA points to improved profitability and operational performance.

The current Price-to-Earnings (P/E) ratio is 19.73, which lies within a normal range, indicating that the stock is neither particularly expensive nor cheap compared to its earnings. This neutrality in P/E ratio offers a balanced view for potential valuation.

However, recent insider selling could be seen as a bearish signal, as it might indicate that those closest to the company are looking to cash out.

Technical Analysis

Today’s stock price is $274.09, reflecting an increase of 0.88% compared to a month ago and 9.55% from a year ago. This positive short-term and long-term price trend suggests bullish momentum.

The current Simple Moving Average over 10 days (SMA10) is $269.81, slightly up from the previous SMA10 of $269.63. This suggests an upward trend in price movement and can be seen as a positive signal by investors.

The Relative Strength Index (RSI) stands at 47.6, indicating neutral market conditions. An RSI of 47.6 doesn't signify overbought or oversold conditions, which means the stock isn't tipped too much in favor of either bulls or bears.

Alternative Data Analysis

Starting with job postings and employee sentiment, Cummins has 1,450 open positions, up by 7% in the past few months. This suggests that the company is looking to grow and expand, potentially a healthy sign.

The business outlook among employees remains neutral, not providing any significant positive or negative sentiment.

On the customer acquisition front, Cummins saw a 14% increase in estimated web page visitors, totaling 1.8 million. This bullish trend can indicate an increase in potential customers.

Regarding customer engagement, Cummins has 180,000 Instagram followers and 130,000 Twitter followers. There has been no meaningful increase or decrease in follower numbers on Instagram, while the number of Twitter followers has remained stagnant, indicating a potential loss of interest in the company.

AltIndex's AI score for Cummins is 38, which is a sell signal. This score is computed based on a combination of fundamental, technical, and alternative data analysis, suggesting that the overall outlook might be bearish.

Conclusion

Cummins Inc. shows a mixed bag of signals across various analytical dimensions. From a fundamental perspective, the increase in net income and EBITDA are strong positives, though the slight decline in revenue is a concern. Technical analysis indicates a bullish trend, supported by rising stock prices and SMA10. However, alternative data presents a nuanced picture, with an increase in job postings and web traffic being positive, but stagnant social media growth and a low AI score being bearish signals.

Based on the convergence of these factors, we would recommend a cautious investment approach. While the company's internal financials show strength, external market and sentiment indicators suggest potential weaknesses. Thus, keeping a close eye on future performance metrics and market conditions is crucial before making significant investment decisions.

Disclaimer: This article, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current. Visit CMI AI Stock Analysis for a more up-to-date analysis.

Get More Insights

Sign up and get access to a personalized dashboard, deeper insights, AI stock picks, stock alerts, weekly newsletter and much more.