Allison Transmission Holdings, Inc.
Allison Transmission Holdings, Inc. Fundamental Analysis
Allison Transmission Holdings, Inc. (ALSN) shows strong financial fundamentals with a PE ratio of 14.33, profit margin of 22.78%, and ROE of 40.46%. The company generates $3.0B in annual revenue with moderate year-over-year growth of 6.26%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ALSN's fundamental strength across five key dimensions:
Efficiency Score
ExcellentALSN demonstrates superior asset utilization.
Valuation Score
ExcellentALSN trades at attractive valuation levels.
Growth Score
ExcellentALSN delivers strong and consistent growth momentum.
Financial Health Score
ModerateALSN shows balanced financial health with some risks.
Profitability Score
ExcellentALSN achieves industry-leading margins.
Key Financial Metrics
Is ALSN Expensive or Cheap?
P/E Ratio
ALSN trades at 14.33 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ALSN's PEG of -1.91 indicates potential undervaluation.
Price to Book
The market values Allison Transmission Holdings, Inc. at 5.44 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.85 times EBITDA. This is generally considered low.
How Well Does ALSN Make Money?
Net Profit Margin
For every $100 in sales, Allison Transmission Holdings, Inc. keeps $22.78 as profit after all expenses.
Operating Margin
Core operations generate 30.76 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $40.46 in profit for every $100 of shareholder equity.
ROA
Allison Transmission Holdings, Inc. generates $12.67 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Allison Transmission Holdings, Inc. generates strong operating cash flow of $796.15M, reflecting robust business health.
Free Cash Flow
Allison Transmission Holdings, Inc. generates strong free cash flow of $678.31M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.15 in free cash annually.
FCF Yield
ALSN converts 6.93% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.33
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.91
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.44
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.23
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.30
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.82
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.40
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.19
vs 25 benchmark
How ALSN Stacks Against Its Sector Peers
| Metric | ALSN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.33 | 25.25 | Better (Cheaper) |
| ROE | 40.46% | 1170.00% | Weak |
| Net Margin | 22.78% | 742.00% | Weak |
| Debt/Equity | 1.30 | 0.77 | Weak (High Leverage) |
| Current Ratio | 3.82 | 9.19 | Strong Liquidity |
| ROA | 12.67% | -6467.00% (disorted) | Strong |
ALSN outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Allison Transmission Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
67.62%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
69.72%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
32.61%
Industry Style: Cyclical, Growth, Discretionary
High Growth