TransDigm Group Incorporated
TransDigm Group Incorporated Fundamental Analysis
TransDigm Group Incorporated (TDG) shows moderate financial fundamentals with a PE ratio of 38.60, profit margin of 21.59%, and ROE of -26.55%. The company generates $8.8B in annual revenue with strong year-over-year growth of 11.22%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 76.9/100 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 TDG's fundamental strength across five key dimensions:
Efficiency Score
WeakTDG struggles to generate sufficient returns from assets.
Valuation Score
ModerateTDG shows balanced valuation metrics.
Growth Score
ExcellentTDG delivers strong and consistent growth momentum.
Financial Health Score
ExcellentTDG maintains a strong and stable balance sheet.
Profitability Score
ModerateTDG maintains healthy but balanced margins.
Key Financial Metrics
Is TDG Expensive or Cheap?
P/E Ratio
TDG trades at 38.60 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TDG's PEG of -12.38 indicates potential undervaluation.
Price to Book
The market values TransDigm Group Incorporated at -8.19 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.00 times EBITDA. This is generally considered low.
How Well Does TDG Make Money?
Net Profit Margin
For every $100 in sales, TransDigm Group Incorporated keeps $21.59 as profit after all expenses.
Operating Margin
Core operations generate 46.47 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-26.55 in profit for every $100 of shareholder equity.
ROA
TransDigm Group Incorporated generates $8.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
TransDigm Group Incorporated produces operating cash flow of $2.06B, showing steady but balanced cash generation.
Free Cash Flow
TransDigm Group Incorporated generates strong free cash flow of $1.82B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $32.27 in free cash annually.
FCF Yield
TDG converts 2.56% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
38.60
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-12.38
vs 25 benchmark
P/B Ratio
Price to book value ratio
-8.19
vs 25 benchmark
P/S Ratio
Price to sales ratio
8.09
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-3.23
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.75
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.27
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How TDG Stacks Against Its Sector Peers
| Metric | TDG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 38.60 | 26.49 | Worse (Expensive) |
| ROE | -26.55% | 1307.00% | Weak |
| Net Margin | 21.59% | -5131.00% (disorted) | Strong |
| Debt/Equity | -3.23 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 2.75 | 10.48 | Strong Liquidity |
| ROA | 8.28% | -1549793.00% (disorted) | Weak |
TDG outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews TransDigm Group Incorporated's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
70.38%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
192.12%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
65.42%
Industry Style: Cyclical, Value, Infrastructure
High Growth