TransDigm Group Incorporated Fundamental Analysis (NYSE: TDG)
TransDigm Group Incorporated (NYSE: TDG) shows moderate financial fundamentals with a PE ratio of 37.67, profit margin of 20.69%, and ROE of -20.44%. The company generates $9.7B 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 78.2/100 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
WeakTDG trades at a premium to fair value.
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 37.67 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TDG's PEG of 4.00 indicates potential overvaluation.
Price to Book
The market values TransDigm Group Incorporated at -5.91 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.96 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 $20.69 as profit after all expenses.
Operating Margin
Core operations generate 46.05 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-20.44 in profit for every $100 of shareholder equity.
ROA
TransDigm Group Incorporated generates $8.61 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 $2.03B, showing steady but balanced cash generation.
Free Cash Flow
TransDigm Group Incorporated generates strong free cash flow of $1.79B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $31.95 in free cash annually.
FCF Yield
TDG converts 2.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
37.67
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.00
vs 25 benchmark
P/B Ratio
Price to book value ratio
-5.91
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.94
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-2.74
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.09
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.20
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.21
vs 25 benchmark
How TDG Stacks Against Its Sector Peers
| Metric | TDG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 37.67 | 31.41 | Worse (Expensive) |
| ROE | -20.44% | 1114.00% | Weak |
| Net Margin | 20.69% | -21308.00% (disorted) | Strong |
| Debt/Equity | -2.74 | 0.49 | Strong (Low Leverage) |
| Current Ratio | 3.09 | 21.99 | Strong Liquidity |
| ROA | 8.61% | -1339931.00% (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