Common Stock Valuation Ratios (Price Multiples)
Quarterly Data
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Historical Valuation Ratios (Summary)
Cummins Inc., historical price multiples (quarterly data)
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio exhibited a notable upward trend from early 2020 through late 2020, increasing from 11.27 to above 20. Following this peak, the ratio generally declined throughout 2021 and into 2023, reaching a low around 11.04 in the third quarter of 2023. However, a sharp spike occurred in the final quarter of 2023, surging to nearly 50, before retreating to approximately 19.78 in the first quarter of 2024. This volatility indicates fluctuating investor sentiment and changes in earnings expectations over the period.
- Price to Operating Profit (P/OP) Ratio
- This ratio followed a pattern similar to the P/E ratio, rising significantly during 2020 and peaking near 16.31 in the third quarter of 2020. Subsequently, it declined steadily through 2021 and 2022, hitting lows below 9 in 2023. An abrupt increase was observed starting in the fourth quarter of 2023, more than doubling from approximately 8.18 to over 23 by early 2024. The sharp increase towards the end of the period suggests a rapid reevaluation of operating profit valuations by the market or changing profitability dynamics.
- Price to Sales (P/S) Ratio
- The price to sales ratio demonstrated modest growth in the first half of the examined period, climbing from about 1.05 in early 2020 to a high near 1.83 by late 2020. Afterward, it exhibited a gradual decline, settling around 0.93 in late 2023. The ratio subsequently rebounded to above 1.1 in early 2024. The less volatile movement compared to earnings and operating profit ratios suggests relatively stable sales valuations, with temporary dips potentially reflecting shifts in sales performance or market valuation standards.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio started around 3.36 in early 2020 and increased steadily to a range above 4.5 by early 2021, indicating an expanding market price relative to book value. Throughout 2021 and 2022, it fluctuated within a band largely between 3.3 and 4.3. The ratio decreased to a trough near 2.9 in third quarter 2023, before markedly rising to above 4.0 by early 2024. This pattern reflects shifts in market perception of the company's net asset value, with recent increases suggesting renewed investor confidence or changes in underlying book value.
Price to Earnings (P/E)
Cummins Inc., historical P/E calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Net income attributable to Cummins Inc. (in millions) | |||||||||||||||||||||||
| Earnings per share (EPS)2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/E ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/E Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Data adjusted for splits and stock dividends.
2 Q1 2024 Calculation
EPS
= (Net income attributable to Cummins Inc.Q1 2024
+ Net income attributable to Cummins Inc.Q4 2023
+ Net income attributable to Cummins Inc.Q3 2023
+ Net income attributable to Cummins Inc.Q2 2023)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Cummins Inc. Quarterly or Annual Report.
4 Q1 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trends
- The share price displayed an overall upward trajectory from March 2020 through the end of 2021, peaking near 255.61 US$ in April 2021. Subsequently, there was a decline through early 2022, bottoming around 202.13 US$ in March 2022. Following this trough, prices recovered steadily, surpassing previous highs and reaching a peak of 280.29 US$ in March 2024. This indicates a significant appreciation over the four-year period with some volatility.
- Earnings Per Share (EPS) Trends
- EPS fluctuated considerably across the quarters. Starting at 14.29 US$ in March 2020, EPS declined in subsequent quarters, reaching a low near 10.73 US$ by September 2020. From late 2020 through 2021, EPS generally trended upward, peaking near 19.73 US$ in September 2023. Notably, there was a sharp drop to 5.18 US$ in December 2023 before EPS rebounded again to 14.17 US$ in March 2024. This volatility suggests episodic variations in profitability or one-off events affecting earnings.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio demonstrated considerable variability. Beginning at a low 11.27 in March 2020, the ratio rose to peak above 20 during late 2020, indicating increasing investor valuation relative to earnings. Throughout 2021 and early 2022, it fluctuated primarily between approximately 14 and 17. From mid-2023 to early 2024, the P/E ratio exhibited wider swings, notably spiking to 49.57 in December 2023—coinciding with the EPS trough—before moderating to 19.78 by March 2024. This spike suggests a momentary market repricing amidst reduced earnings.
- Overall Financial Observations
- The data reflects periods of growth and contraction in earnings and share price, punctuated by a notable earnings disruption near the end of 2023. This incident caused elevated P/E ratios due to depressed EPS and possibly increased market uncertainty. Despite this, the share price demonstrated resilience by reaching new highs in early 2024. The general pattern indicates the company has experienced oscillations in performance but maintains an upward trend in market valuation over the analyzed period.
Price to Operating Profit (P/OP)
Cummins Inc., historical P/OP calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Operating income (in millions) | |||||||||||||||||||||||
| Operating profit per share2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/OP ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/OP Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Data adjusted for splits and stock dividends.
2 Q1 2024 Calculation
Operating profit per share
= (Operating incomeQ1 2024
+ Operating incomeQ4 2023
+ Operating incomeQ3 2023
+ Operating incomeQ2 2023)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Cummins Inc. Quarterly or Annual Report.
4 Q1 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial data over multiple quarters reveals several notable trends in share price, operating profit per share, and the price-to-operating-profit (P/OP) ratio.
- Share Price
- The share price started at $161.08 and exhibited an overall upward trajectory with intermittent fluctuations. A significant rise was observed through 2020 into early 2021, peaking at $255.61 in April 2021. This was followed by a period of volatility where the share price dipped to $202.13 in March 2022 but recovered later to reach a new peak of $280.29 by March 2024. The pattern suggests resilient investor confidence with periods of correction aligned with market dynamics or company-specific factors.
- Operating Profit Per Share
- Operating profit per share displayed moderate variability over the analyzed periods. Starting at $17.18 in March 2020, it saw a decline to 13.47 by September 2020, reflecting possible operational challenges during that time. Subsequently, there was a steady recovery and growth into 2022 and 2023, reaching a high of $26.63 in September 2023. However, a sharp reduction occurred in the last two observed quarters, falling to approximately $12.12 by March 2024. This decline in operating profit per share contrasts the increasing share price in the same timeframe, which suggests potential concerns over profitability despite market optimism.
- Price-to-Operating-Profit (P/OP) Ratio
- The P/OP ratio exhibited considerable variation indicative of changing market valuation relative to the company's operational earnings. Initially, the ratio hovered around the range of 9.37 to 16.31 during 2020, peaking in September 2020. From 2021 through most of 2023, the ratio stabilized between approximately 9.62 and 12.82, signaling relatively balanced valuation levels reflective of steady operating profit trends. Notably, the P/OP ratio surged dramatically in the final two quarters, reaching over 23 by March 2024, coinciding with the dip in operating profit per share and the concurrent rise in share price. This divergence suggests a growing disconnect where the market price values the stock significantly higher relative to its current operating profit, potentially indicating high growth expectations or speculative market behavior.
In summary, the share price demonstrated broad growth with periods of volatility, operating profit per share showed recovery followed by an unexpected decline in the most recent periods, and the P/OP ratio reflects increasing market valuation relative to earnings. The recent mismatch between rising share price and falling operating profit per share warrants further investigation to understand underlying drivers and sustainability of market expectations.
Price to Sales (P/S)
Cummins Inc., historical P/S calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Net sales (in millions) | |||||||||||||||||||||||
| Sales per share2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/S ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/S Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Data adjusted for splits and stock dividends.
2 Q1 2024 Calculation
Sales per share
= (Net salesQ1 2024
+ Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Cummins Inc. Quarterly or Annual Report.
4 Q1 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial indicators over the presented periods reveals several notable trends and fluctuations.
- Share Price
- The share price experienced a significant upward trend from March 2020 to December 2020, increasing from 161.08 US$ to a peak of 245.11 US$. Following this peak, there was a period of decline and volatility until March 2023, with prices dipping as low as 202.13 US$ in March 2022. Subsequently, the share price showed a recovery pattern, rising again to reach 280.29 US$ by March 2024, marking the highest value in the examined timeframe.
- Sales per Share
- Sales per share exhibited a relatively steady increase throughout the entire period. Starting at 153.04 US$ in March 2020, the metric displayed minor fluctuations initially but consistently grew, reaching 248.68 US$ by March 2024. The upward trajectory in sales per share indicates sustained growth in company revenue on a per-share basis over the years.
- Price-to-Sales (P/S) Ratio
- The P/S ratio showed an initial rise from 1.05 in March 2020 to a high of 1.83 by December 2020, reflecting an increasingly optimistic market valuation relative to sales. After this peak, the ratio generally declined, falling below 1.00 in September 2023 to 0.93, indicating that the market price was less than one times the sales per share. The ratio then experienced a mild recovery, closing at 1.13 in March 2024. This fluctuation suggests changing investor sentiment and valuation multiples over the period.
Overall, the data indicates that while sales per share consistently improved, the share price exhibited more pronounced volatility, especially post-2020. The P/S ratio mirrored these market valuation shifts, with a peak during the late 2020 period followed by a significant decrease and a modest rebound. This pattern may reflect broader market dynamics or company-specific operational factors impacting investor confidence over the assessed quarters.
Price to Book Value (P/BV)
Cummins Inc., historical P/BV calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Total Cummins Inc. shareholders’ equity (in millions) | |||||||||||||||||||||||
| Book value per share (BVPS)2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/BV ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/BV Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29).
1 Data adjusted for splits and stock dividends.
2 Q1 2024 Calculation
BVPS = Total Cummins Inc. shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cummins Inc. Quarterly or Annual Report.
4 Q1 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited an overall upward trajectory from March 2020 through March 2024, starting at $161.08 and reaching $280.29. Notable fluctuations occurred with peaks at $255.61 in April 2021 and $256.85 in December 2023, followed by intermittent decreases, such as the dip to $202.13 by March 2022. The recent surge from $217.94 in September 2023 to $280.29 in March 2024 indicates renewed investor confidence or positive market developments during the latest periods.
- Book Value per Share (BVPS) Development
- BVPS showed a steady increase over the observed period, starting from $47.91 in March 2020 and rising to $66.29 by March 2024. Despite minor declines in some quarters (e.g., a decrease from $75.19 in September 2023 to $62.39 in December 2023), the overall growth in BVPS suggests consistent accumulation of equity value and possibly effective capital management. The growth trend reflects improving net asset value per share, enhancing the intrinsic value base of the company.
- Price-to-Book Value Ratio (P/BV) Dynamics
- The P/BV ratio demonstrated variability, beginning at 3.36 and peaking at 4.61 in April 2021 before decreasing to a low of 2.9 in September 2023. The ratio rebounded sharply thereafter, reaching 4.23 by March 2024. This fluctuation suggests changing market perceptions of the company's valuation relative to its book value, with periods of premium valuation possibly linked to growth expectations or favorable market sentiment. The lower ratios in mid to late 2023 may indicate a temporary undervaluation or market caution during that period.
- Interrelations and Insights
- The positive correlation between share price and BVPS supports a narrative of gradual value creation. Meanwhile, the varying P/BV ratio implies that the market's multiple applied to the book value has been more volatile, reflecting external factors influencing investor sentiment beyond fundamental book value changes. The sharp increase in the share price and P/BV ratio toward the end of the period may indicate expectations of improved future profitability or strategic developments attracting investor interest.