Company Reports

Cummins has decades of experience and market leadership providing diesel engines, specifically to the medium- and heavy-duty truck markets. Over time, the company has acquired more capabilities in other heavy vehicle components such as emissions systems, drivetrains, and brakes (for example, the company’s nearly $4 billion acquisition of Meritor in 2022). Cummins makes generators and engines for various industries, and it is seeing increased demand in the rapidly expanding data center market, which has grown to 10% of sales.

Cummins posted 9% revenue growth to $9.5 billion, but EBITDA margins compressed by 90 basis points to 17.5% due to higher incentive compensation expense in advance of the company’s record performance, surprising investors.

Cummins reported a 3% increase in sales to $8.4 billion, a 2% increase to adjusted EBITDA to $1.49 billion, and a 3% increase to adjusted EPS of $6.15. Power systems, which provides backup generators to data centers, continues to outperform while heavy- and medium-duty truck markets are recovering.

Cummins has decades of experience and market leadership providing diesel engines, specifically to the medium- and heavy-duty truck markets. Over time, the company has acquired more capabilities in other heavy vehicle components such as emissions systems, drivetrains, and brakes (for example, the company’s nearly $4 billion acquisition of Meritor in 2022). Cummins makes generators and engines for various industries, and it is seeing increased demand in the rapidly expanding data center market, which has grown to 10% of sales.

While Cummins reported a 1% decline in sales to $33.7 billion and 4% decline in EPS in 2025 due to ongoing weakness in trucking markets, the company’s rapidly growing and hugely profitable exposure to data centers led to record results in its power systems and distribution segments.

Cummins has decades of experience and market leadership providing diesel engines, specifically to the medium- and heavy-duty truck markets. Over time, the company has acquired more capabilities in other heavy vehicle components such as emissions systems, drivetrains, and brakes (for example, the company’s nearly $4 billion acquisition of Meritor in 2022). Cummins makes generators and engines for various industries, and it is seeing increased demand in the rapidly expanding data center market, which has grown to 10% of sales.

Cummins has decades of experience and market leadership providing diesel engines, specifically to the medium- and heavy-duty truck markets. Over time, the company has acquired more capabilities in other heavy vehicle components such as emissions systems, drivetrains, and brakes (for example, the company’s nearly $4 billion acquisition of Meritor in 2022). Cummins makes generators and engines for various industries, and it is seeing increased demand in the rapidly expanding data center market.

Cummins reported a 2% sales decline to $8.3 billion along with a 3% increase to adjusted EBITDA of $1.4 billion, primarily driven by volume and pricing on back-up generator sales to data centers.

Cummins reported a 2% decline in sales in the second quarter, but an impressive 18% gain in EBITDA, with outstanding performance related to its data center offerings offsetting a worsening outlook for the core trucks business. Tariff impacts appear to be minimal for now.

Cummins has decades of experience and market leadership providing diesel engines, specifically to the medium- and heavy-duty truck markets. Over time, the company has acquired more capabilities in other heavy vehicle components such as emissions systems, drivetrains, and brakes (for example, the company’s nearly $4 billion acquisition of Meritor in 2022). Cummins makes generators and engines for various industries, and it is seeing increased demand in the rapidly expanding data center market.

Cummins reported a 3% decline in sales to $8.1 billion in the first quarter amid a weakening truck environment. However, adjusted EBITDA grew to almost $1.5 billion (17.9% margin) versus $1.3 billion (15.5% margin) in the prior period, and adjusted EPS was $5.96 versus $5.10 per share in the prior period. The key driver of strength in the quarter was the power systems business with 19% top-line growth and margin expansion to a record 23.6%. Management cited ongoing robust growth in data center end markets (in both the US and China). Upon further examination on the call, management described significant aftermarket contribution in power systems, robust pricing, and more broad-based strength across its verticals. We will continue to monitor this going forward, but we certainly welcome Cummins’ efforts to diversify its end market exposures through the power systems business. The other main performance driver in the quarter was margin strength in the core engine business, despite end market weakness. This was a function of both cost control and favorable pricing.

After taking a fresh look at Cummins, a leading global supplier of diesel and other engines serving heavy- and medium-duty trucks and other industrial end markets, we’ve raised our fair value estimate to $336 per share from $281. This reflects our more constructive view on heavy-duty truck demand and the company’s efforts to diversify into truck components and other industrial applications. We’re maintaining our narrow economic moat rating and Standard Capital Allocation Rating.

Cummins has decades of experience and market leadership providing diesel engines, specifically to the medium- and heavy-duty truck markets. Over time, the company has acquired more capabilities in other heavy vehicle components such as emissions systems, drivetrains, and brakes (for example, the company’s nearly $4 billion acquisition of Meritor in 2022). Cummins also sells generators and engines to a host of diversified industrial applications, with recent tailwinds found in the fast-growing data center vertical.

Cummins' fourth-quarter consolidated sales were down 1% year over year to $8.5 billion, slightly ahead of our expectations despite continued headwinds from the US trucking industry pullback and resulting normalization in new heavy-duty truck orders. Net sales were up 13% for the distribution segment and 22% for the power systems segment, driven by soaring demand in power generation, specifically for data center applications. Net sales fell 2% for the engine segment (soft heavy-duty truck market) and 17% for components, which was largely affected by the separation of Atmus.

Cummins’ third-quarter consolidated sales were roughly flat year over year, and the adjusted EBITDA margin improved 150 basis points despite continued headwinds from the US trucking industry pullback and resulting normalization in new heavy-duty truck orders. Net sales were up 17% for the power systems segment and 16% for the distribution segment on increased demand for power generation, particularly for data center applications. On the other hand, engine revenue was down 1% due to the sluggish North American heavy-duty truck market, and components revenue fell 16%, primarily because of the Atmus separation.

We believe Cummins will remain the top supplier of truck engines and components, despite intensifying emissions regulation. For more than a century, the company has been the pre-eminent manufacturer of diesel engines, establishing its place as one of the best heavy- and medium-duty engine brands. Cummins' strong brand is supported in part by its high-performing and durable engines. Customers also value Cummins’ ability to enhance the value of their trucks, leading to product differentiation.

Cummins' second-quarter revenue rose 2%, beating our expectations, despite underlying headwinds from the US trucking industry pullback and resulting normalization in new heavy-duty truck orders. Net sales were up a solid 5% for the engine segment on resilient demand from the North American medium-duty truck market, while the power generation segment was up 9% thanks to solid data center and mission-critical power demand. Distribution revenue grew 9% due in part to higher pricing and increased demand for power generation products. These factors were only partly offset by 13% lower components revenue, driven by the separation of Atmus and softer demand in China and Europe.

We believe Cummins will remain the top supplier of truck engines and components, despite intensifying emissions regulation. For more than a century, the company has been the pre-eminent manufacturer of diesel engines, establishing its place as one of the best heavy- and medium-duty engine brands. Cummins' strong brand is supported in part by its high-performing and durable engines. Customers also value Cummins’ ability to enhance the value of their trucks, leading to product differentiation.

We believe Cummins will remain the top supplier of truck engines and components, despite intensifying emissions regulation. For more than a century, the company has been the pre-eminent manufacturer of diesel engines, establishing its place as one of the best heavy- and medium-duty engine brands. Cummins' strong brand is underpinned by its high-performing and durable engines. Customers also value Cummins’ ability to enhance the value of their trucks, leading to product differentiation.

Cummins shared updates to its 2030 targets at its analyst day on May 16. Following the event, we’re leaving our $246 fair value estimate unchanged. Our key takeaway was that the company shows strong promise in the zero-emission transition. However, we think Cummins will need to execute in a few areas (namely, commercializing electrolyzers) before we become more optimistic about the company’s long-term prospects.