Key Stats for CMI Stock
- Price Change for CMI stock: -10.7%
- CMI Share Price as of Feb. 5: $540.65
- 52-Week High: $617.98
- CMI Stock Price Target: $560.57
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What Happened?
Cummins Inc. (CMI) stock dropped about 11% after the company reported Q4 2025 earnings and unveiled a large charge in its Accelera segment.
The company beat earnings expectations, but investors focused on a roughly $458 million electrolyzer and restructuring charge tied to its hydrogen and fuel-cell business.
That charge weighed on reported profits and highlighted ongoing losses in newer zero-emissions technologies, so it sparked concern about execution risk and capital allocation.
Even so, core operations looked resilient because Power Systems delivered record results and offset weakness in the truck engine market.
Cummins’ Q4 2025 revenue came in around $8.5 billion, slightly above consensus, as data-center-related power generation demand supported growth despite softer North American truck volumes.
Management also projected 2026 revenue growth of 3%–8% and an EBITDA margin around 17%–18%, but investors questioned whether those targets fully compensate for the risks around Accelera and cyclical trucks.
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What the Market Is Telling Us About CMI Stock
The sharp pullback suggests that the market is reassessing how much it is willing to pay for Cummins’ transition story after a strong run.
Shares had recently set a new 52-week high near $618, so profit-taking was likely once the size of the Accelera charge became clear. Segment trends also help explain the reaction because investors saw mixed momentum across Cummins’ portfolio.
Engine and Components revenues declined in Q4 as North American heavy- and medium-duty truck demand remained weak, while Power Systems revenue and margins jumped on robust data center and standby power projects.
Accelera’s revenue grew more than 30% year over year, but its large EBITDA loss and restructuring actions signaled that profitability in hydrogen and fuel-cell solutions remains several years away.
From a fundamentals angle, Cummins still looks solid because its balance sheet is strong and its core businesses generate healthy returns.
The company’s latest data show LTM EBIT margin of 10.6%, ROIC of 17.0%, and net debt to EBITDA of just 0.85x, which supports ongoing investment and dividends even through a soft truck cycle.
Management is also guiding for capex of about $1.35–$1.45 billion in 2026 to support growth in high-horsepower engines and power systems, especially for data centers.
However, management has recently taken a more cautious stance on buybacks, and it even paused repurchases in one quarter as earnings softened.
This pause suggests that preserving flexibility for growth investments and managing Accelera-related headwinds is a higher priority than aggressive share reduction right now.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
