Is Cummins, Inc. overvalued or undervalued?

As of 17 October 2025, Cummins, Inc. has moved from expensive to fair in its valuation grade. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 25, an EV to EBITDA of 15.74, and a Price to Book Value of 6.49. In comparison to peers, Cummins has a lower P/E ratio than Caterpillar, Inc. at 32.72 and Deere & Co. at 44.92, while PACCAR, Inc. shows a more favorable P/E of 16.81.
Despite a recent decline in stock price, Cummins has outperformed the S&P 500 on a year-to-date basis with a return of 18.14% compared to the S&P 500's 13.30%. Over the past year, Cummins has also delivered a return of 23.68%, significantly higher than the S&P 500's 14.08%, reinforcing the narrative that the stock is fairly valued in the current market environment.