Stock Watch: Uniform Accounting for CMI shows that investors may not realize how poor earnings actually are and the recent stock run was not warranted

Tuesday, May 30, 2017

Uniform Accounting for CMI shows that investors may not realize how poor earnings actually are and the recent stock run was not warranted

CMI’s EPS’ was not $2.36, it was actually $1.49 in Q1, and earnings shrunk by 18% year over year, contrary to as-reported metrics which show a 16% growth rate
After making the appropriate UAFRS adjustments, CMI is trading at a 25.6x P/E, not an 18.6x P/E, and a 2.5x-3.0x PEG, suggesting EPS’ growth does not support currently aggressive valuations
CMI’s profitability is materially distorted by accounting for R&D and depreciation

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Submitted May 30, 2017 at 09:32PM by Valens_Research http://ift.tt/2rieIWn

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