Price to Sales (P/S)
since 2005
Calculation
Cummins Inc., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Net sales1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 12, 2024 | 1.07 | = | 256.85 | ÷ | 240.14 | 240.14 | = | 34,065 | ÷ | 141,856,847 | |
| Feb 14, 2023 | 1.25 | = | 248.41 | ÷ | 198.58 | 198.58 | = | 28,074 | ÷ | 141,375,256 | |
| Feb 8, 2022 | 1.33 | = | 223.51 | ÷ | 168.66 | 168.66 | = | 24,021 | ÷ | 142,426,735 | |
| Feb 10, 2021 | 1.83 | = | 245.11 | ÷ | 134.17 | 134.17 | = | 19,811 | ÷ | 147,657,584 | |
| Feb 11, 2020 | 1.05 | = | 164.30 | ÷ | 156.86 | 156.86 | = | 23,571 | ÷ | 150,269,665 | |
| Feb 11, 2019 | 0.98 | = | 148.18 | ÷ | 151.08 | 151.08 | = | 23,771 | ÷ | 157,338,874 | |
| Feb 14, 2018 | 1.35 | = | 166.00 | ÷ | 123.30 | 123.30 | = | 20,428 | ÷ | 165,683,334 | |
| Feb 13, 2017 | 1.47 | = | 152.85 | ÷ | 104.12 | 104.12 | = | 17,509 | ÷ | 168,155,330 | |
| Feb 12, 2016 | 0.88 | = | 97.01 | ÷ | 109.63 | 109.63 | = | 19,110 | ÷ | 174,320,797 | |
| Feb 17, 2015 | 1.32 | = | 138.98 | ÷ | 105.64 | 105.64 | = | 19,221 | ÷ | 181,945,783 | |
| Feb 18, 2014 | 1.54 | = | 143.10 | ÷ | 92.68 | 92.68 | = | 17,301 | ÷ | 186,682,826 | |
| Feb 20, 2013 | 1.26 | = | 114.83 | ÷ | 91.31 | 91.31 | = | 17,334 | ÷ | 189,844,829 | |
| Feb 21, 2012 | 1.31 | = | 123.30 | ÷ | 94.04 | 94.04 | = | 18,048 | ÷ | 191,927,547 | |
| Feb 24, 2011 | 1.51 | = | 100.87 | ÷ | 66.85 | 66.85 | = | 13,226 | ÷ | 197,847,368 | |
| Feb 26, 2010 | 1.06 | = | 56.78 | ÷ | 53.64 | 53.64 | = | 10,800 | ÷ | 201,359,036 | |
| Feb 27, 2009 | 0.29 | = | 20.80 | ÷ | 71.23 | 71.23 | = | 14,342 | ÷ | 201,352,073 | |
| Feb 26, 2008 | 0.83 | = | 53.40 | ÷ | 64.53 | 64.53 | = | 13,048 | ÷ | 202,192,548 | |
| Feb 27, 2007 | 0.62 | = | 34.04 | ÷ | 54.52 | 54.52 | = | 11,362 | ÷ | 208,398,444 | |
| Feb 28, 2006 | 0.51 | = | 27.07 | ÷ | 53.37 | 53.37 | = | 9,918 | ÷ | 185,823,756 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Cummins Inc. Annual Report.
The valuation of the company as measured by the Price-to-Sales (P/S) ratio exhibits significant volatility over the nineteen-year period, characterized by cycles of expansion and contraction. While both the share price and sales per share trended upward over the long term, the P/S ratio fluctuated, reflecting shifting market sentiments and valuation premiums relative to revenue generation.
- Price-to-Sales Ratio Trends
- The P/S ratio experienced its lowest point in 2009 at 0.29, following a sharp decline from 0.83 in 2008. A rapid recovery followed, with the ratio peaking at 1.51 in 2011. After a period of relative stability between 1.26 and 1.54 from 2012 to 2015, a notable contraction occurred in 2016, bringing the ratio down to 0.88. The highest valuation multiple was recorded in 2021 at 1.83, before moderating to 1.07 by 2024.
- Revenue Efficiency and Share Price Correlation
- Sales per share demonstrated a consistent long-term growth trajectory, rising from 53.37 US$ in 2006 to 240.14 US$ in 2024. This fundamental growth supported a general increase in share price, which grew from 27.07 US$ to 256.85 US$ over the same period. However, the P/S ratio indicates that share price appreciation often outpaced revenue growth, particularly between 2020 and 2021, where the ratio spiked to 1.83 despite a simultaneous decrease in sales per share from 156.86 US$ to 134.17 US$.
- Valuation Regime Shifts
- A distinct shift in valuation is observable between the 2006–2009 period and the subsequent years. Prior to 2010, the P/S ratio predominantly remained below 1.00, with the exception of 2008. From 2010 onward, a higher valuation floor was established, with the ratio remaining above 1.00 in most years, indicating a structural increase in the multiple the market was willing to pay for each dollar of sales.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Comparison to Competitors
Cummins Inc., P/S, long-term trends, comparison to competitors
| Cummins Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Feb 12, 2024 | 1.07 | 1.66 | 2.52 | 4.98 | 2.30 | 3.51 | 1.57 | 1.78 |
| Feb 14, 2023 | 1.25 | 1.90 | 2.27 | 3.31 | 1.20 | 3.78 | 1.78 | 2.14 |
| Feb 8, 2022 | 1.33 | 1.87 | 2.26 | 3.03 | 1.50 | 3.73 | 1.57 | 2.21 |
| Feb 10, 2021 | 1.83 | 1.96 | 2.83 | 2.96 | 1.41 | 4.34 | 1.40 | 1.95 |
| Feb 11, 2020 | 1.05 | 2.34 | 1.48 | 1.87 | 1.18 | 3.51 | 2.07 | 1.75 |
| Feb 11, 2019 | 0.98 | 2.26 | 1.47 | 1.58 | 0.82 | 2.59 | 1.58 | 1.56 |
| Feb 14, 2018 | 1.35 | 2.17 | 2.24 | 1.74 | 1.11 | 2.74 | 1.91 | 1.67 |
| Feb 13, 2017 | 1.47 | 1.06 | 1.62 | 1.65 | 2.39 | 2.36 | 1.59 | 1.55 |
| Feb 12, 2016 | 0.88 | 0.80 | 0.86 | 1.25 | 2.59 | 2.06 | 1.43 | 1.26 |
| Feb 17, 2015 | 1.32 | 1.15 | 0.99 | 1.49 | 2.45 | 2.03 | 1.34 | 1.67 |
| Feb 18, 2014 | 1.54 | 1.12 | 1.17 | 1.63 | 2.54 | 1.90 | 1.15 | 1.60 |
| Feb 20, 2013 | 1.26 | 0.70 | 0.99 | 1.79 | 2.39 | 1.46 | 0.60 | 1.43 |
| Feb 21, 2012 | 1.31 | 0.82 | 1.30 | 1.08 | 2.15 | 1.28 | 0.62 | 1.31 |
| Feb 24, 2011 | 1.51 | 0.83 | 1.63 | 1.33 | 2.20 | 1.36 | 0.61 | 1.44 |
| Feb 26, 2010 | 1.06 | 0.64 | 1.23 | 0.95 | 1.66 | 0.94 | 0.64 | 1.19 |
| Feb 27, 2009 | 0.29 | 0.51 | 0.33 | 0.39 | 1.02 | 0.66 | 0.64 | 0.77 |
| Feb 26, 2008 | 0.83 | 0.98 | 1.06 | 0.91 | 3.45 | 1.21 | 1.03 | 1.30 |
| Feb 27, 2007 | 0.62 | 1.17 | 1.12 | 0.96 | 3.54 | 1.22 | 1.08 | 1.44 |
| Feb 28, 2006 | 0.51 | 1.06 | 1.44 | 0.93 | 3.72 | 1.24 | 0.86 | 1.36 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Cummins Inc., P/S, long-term trends, comparison to sector (capital goods)
| Cummins Inc. | Capital Goods | |
|---|---|---|
| Feb 12, 2024 | 1.07 | 2.26 |
| Feb 14, 2023 | 1.25 | 2.09 |
| Feb 8, 2022 | 1.33 | 2.09 |
| Feb 10, 2021 | 1.83 | 2.11 |
| Feb 11, 2020 | 1.05 | 1.92 |
| Feb 11, 2019 | 0.98 | 1.62 |
| Feb 14, 2018 | 1.35 | 1.82 |
| Feb 13, 2017 | 1.47 | 1.76 |
| Feb 12, 2016 | 0.88 | 1.55 |
| Feb 17, 2015 | 1.32 | 1.66 |
| Feb 18, 2014 | 1.54 | 1.66 |
| Feb 20, 2013 | 1.26 | 1.37 |
| Feb 21, 2012 | 1.31 | 1.33 |
| Feb 24, 2011 | 1.51 | 1.45 |
| Feb 26, 2010 | 1.06 | 1.12 |
| Feb 27, 2009 | 0.29 | 0.71 |
| Feb 26, 2008 | 0.83 | 1.76 |
| Feb 27, 2007 | 0.62 | 1.91 |
| Feb 28, 2006 | 0.51 | 1.95 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Cummins Inc., P/S, long-term trends, comparison to industry (industrials)
| Cummins Inc. | Industrials | |
|---|---|---|
| Feb 12, 2024 | 1.07 | 2.06 |
| Feb 14, 2023 | 1.25 | 1.80 |
| Feb 8, 2022 | 1.33 | 2.07 |
| Feb 10, 2021 | 1.83 | 2.14 |
| Feb 11, 2020 | 1.05 | 1.77 |
| Feb 11, 2019 | 0.98 | 1.58 |
| Feb 14, 2018 | 1.35 | 1.71 |
| Feb 13, 2017 | 1.47 | 1.68 |
| Feb 12, 2016 | 0.88 | 1.48 |
| Feb 17, 2015 | 1.32 | 1.65 |
| Feb 18, 2014 | 1.54 | 1.57 |
| Feb 20, 2013 | 1.26 | 1.31 |
| Feb 21, 2012 | 1.31 | 1.27 |
| Feb 24, 2011 | 1.51 | 1.39 |
| Feb 26, 2010 | 1.06 | 1.09 |
| Feb 27, 2009 | 0.29 | 0.71 |
| Feb 26, 2008 | 0.83 | 1.62 |
| Feb 27, 2007 | 0.62 | 1.73 |
| Feb 28, 2006 | 0.51 | 1.80 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).