Cummins Inc Stock Buy Recommendation Reiterated (CMI)
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- CMI's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.38, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has slightly increased to $745.00 million or 5.67% when compared to the same quarter last year. Despite an increase in cash flow, CUMMINS INC's cash flow growth rate is still lower than the industry average growth rate of 17.07%.
- CUMMINS INC's earnings per share declined by 31.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CUMMINS INC reported lower earnings of $8.66 versus $9.56 in the prior year. This year, the market expects an improvement in earnings ($8.81 versus $8.66).
- CMI, with its decline in revenue, slightly underperformed the industry average of 12.6%. Since the same quarter one year prior, revenues fell by 12.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
--Written by a member of TheStreet Ratings Staff. Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
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