ALLISON TRANSMISSION HOLDING (ALSN)
US01973R1014 - Common Stock
We assign a fundamental rating of 7 out of 10 to ALSN. ALSN was compared to 132 industry peers in the Machinery industry. While ALSN has a great profitability rating, there are some minor concerns on its financial health. ALSN may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make ALSN suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year ALSN was profitable.
ALSN had a positive operating cash flow in the past year.
ALSN had positive earnings in each of the past 5 years.
In the past 5 years ALSN always reported a positive cash flow from operatings.
1.2 Ratios
ALSN has a better Return On Assets (13.29%) than 88.46% of its industry peers.
ALSN has a Return On Equity of 50.07%. This is amongst the best in the industry. ALSN outperforms 97.69% of its industry peers.
ALSN's Return On Invested Capital of 16.65% is amongst the best of the industry. ALSN outperforms 89.23% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALSN is above the industry average of 10.78%.
The 3 year average ROIC (15.20%) for ALSN is below the current ROIC(16.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.29% | ||
| ROE | 50.07% | ||
| ROIC | 16.65% |
ROA(3y)11.56%
ROA(5y)10.99%
ROE(3y)61.68%
ROE(5y)60.39%
ROIC(3y)15.2%
ROIC(5y)14.91%
1.3 Margins
Looking at the Profit Margin, with a value of 21.80%, ALSN belongs to the top of the industry, outperforming 98.46% of the companies in the same industry.
In the last couple of years the Profit Margin of ALSN has remained more or less at the same level.
ALSN's Operating Margin of 29.94% is amongst the best of the industry. ALSN outperforms 100.00% of its industry peers.
ALSN's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 47.84%, ALSN belongs to the best of the industry, outperforming 93.08% of the companies in the same industry.
In the last couple of years the Gross Margin of ALSN has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.94% | ||
| PM (TTM) | 21.8% | ||
| GM | 47.84% |
OM growth 3Y5.21%
OM growth 5Y-2.39%
PM growth 3Y15.56%
PM growth 5Y-1.2%
GM growth 3Y0.1%
GM growth 5Y-1.57%
2. Health
2.1 Basic Checks
ALSN has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
ALSN has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ALSN has been reduced compared to 5 years ago.
The debt/assets ratio for ALSN has been reduced compared to a year ago.
2.2 Solvency
ALSN has an Altman-Z score of 2.31. This is not the best score and indicates that ALSN is in the grey zone with still only limited risk for bankruptcy at the moment.
ALSN has a Altman-Z score (2.31) which is comparable to the rest of the industry.
The Debt to FCF ratio of ALSN is 3.69, which is a good value as it means it would take ALSN, 3.69 years of fcf income to pay off all of its debts.
ALSN has a better Debt to FCF ratio (3.69) than 62.31% of its industry peers.
A Debt/Equity ratio of 1.79 is on the high side and indicates that ALSN has dependencies on debt financing.
The Debt to Equity ratio of ALSN (1.79) is worse than 90.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.79 | ||
| Debt/FCF | 3.69 | ||
| Altman-Z | 2.31 |
ROIC/WACC1.88
WACC8.84%
2.3 Liquidity
ALSN has a Current Ratio of 2.51. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of ALSN (2.51) is better than 66.15% of its industry peers.
ALSN has a Quick Ratio of 1.95. This is a normal value and indicates that ALSN is financially healthy and should not expect problems in meeting its short term obligations.
ALSN has a Quick ratio of 1.95. This is in the better half of the industry: ALSN outperforms 77.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.95 |
3. Growth
3.1 Past
ALSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.19%, which is quite impressive.
The Earnings Per Share has been growing by 9.25% on average over the past years. This is quite good.
Looking at the last year, ALSN shows a quite strong growth in Revenue. The Revenue has grown by 8.82% in the last year.
ALSN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.27% yearly.
EPS 1Y (TTM)23.19%
EPS 3Y37.85%
EPS 5Y9.25%
EPS growth Q2Q2.7%
Revenue 1Y (TTM)8.82%
Revenue growth 3Y13.4%
Revenue growth 5Y2.27%
Revenue growth Q2Q6.48%
3.2 Future
Based on estimates for the next years, ALSN will show a small growth in Earnings Per Share. The EPS will grow by 7.48% on average per year.
Based on estimates for the next years, ALSN will show a small growth in Revenue. The Revenue will grow by 3.57% on average per year.
EPS Next Y3.53%
EPS Next 2Y7.4%
EPS Next 3Y10.49%
EPS Next 5Y7.48%
Revenue Next Year3.07%
Revenue Next 2Y4.16%
Revenue Next 3Y4.87%
Revenue Next 5Y3.57%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.03, the valuation of ALSN can be described as very reasonable.
Based on the Price/Earnings ratio, ALSN is valued cheaply inside the industry as 88.46% of the companies are valued more expensively.
ALSN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
A Price/Forward Earnings ratio of 8.76 indicates a reasonable valuation of ALSN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 90.00% of the companies listed in the same industry.
ALSN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.03 | ||
| Fwd PE | 8.76 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaper than 83.85% of the companies in the same industry.
ALSN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALSN is cheaper than 93.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.08 | ||
| EV/EBITDA | 7.86 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ALSN may justify a higher PE ratio.
PEG (NY)2.85
PEG (5Y)1.08
EPS Next 2Y7.4%
EPS Next 3Y10.49%
5. Dividend
5.1 Amount
ALSN has a Yearly Dividend Yield of 1.33%. Purely for dividend investing, there may be better candidates out there.
ALSN's Dividend Yield is a higher than the industry average which is at 1.66.
Compared to an average S&P500 Dividend Yield of 2.32, ALSN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
5.2 History
The dividend of ALSN is nicely growing with an annual growth rate of 9.02%!
ALSN has been paying a dividend for at least 10 years, so it has a reliable track record.
ALSN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.02%
Div Incr Years4
Div Non Decr Years11
5.3 Sustainability
ALSN pays out 12.35% of its income as dividend. This is a sustainable payout ratio.
The dividend of ALSN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP12.35%
EPS Next 2Y7.4%
EPS Next 3Y10.49%
ALLISON TRANSMISSION HOLDING
NYSE:ALSN (5/17/2024, 7:04:00 PM)
After market: 75.14 0 (0%)75.14
-0.19 (-0.25%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.57B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.03 | ||
| Fwd PE | 8.76 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.85
PEG (5Y)1.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.29% | ||
| ROE | 50.07% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 29.94% | ||
| PM (TTM) | 21.8% | ||
| GM | 47.84% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.79 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.95 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)23.19%
EPS 3Y37.85%
EPS 5Y
EPS growth Q2Q
EPS Next Y3.53%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.82%
Revenue growth 3Y13.4%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y