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When you look at NYSE:ALSN, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

By Mill Chart

Last update: Nov 13, 2023

Our stock screening tool has pinpointed ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as an undervalued stock option. NYSE:ALSN retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Assessing Valuation for NYSE:ALSN

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:ALSN was assigned a score of 9 for valuation:

  • ALSN is valuated cheaply with a Price/Earnings ratio of 7.53.
  • Compared to the rest of the industry, the Price/Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 91.54% of the companies listed in the same industry.
  • The average S&P500 Price/Earnings ratio is at 23.45. ALSN is valued rather cheaply when compared to this.
  • The Price/Forward Earnings ratio is 7.01, which indicates a rather cheap valuation of ALSN.
  • Based on the Price/Forward Earnings ratio, ALSN is valued cheaply inside the industry as 93.85% of the companies are valued more expensively.
  • ALSN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 18.84.
  • Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
  • Based on the Price/Free Cash Flow ratio, ALSN is valued cheaper than 89.23% of the companies in the same industry.
  • ALSN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • ALSN has an outstanding profitability rating, which may justify a higher PE ratio.
  • A more expensive valuation may be justified as ALSN's earnings are expected to grow with 17.71% in the coming years.

Assessing Profitability for NYSE:ALSN

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:ALSN, the assigned 8 is noteworthy for profitability:

  • ALSN's Return On Assets of 12.91% is amongst the best of the industry. ALSN outperforms 90.00% of its industry peers.
  • ALSN's Return On Equity of 54.39% is amongst the best of the industry. ALSN outperforms 99.23% of its industry peers.
  • ALSN has a Return On Invested Capital of 15.77%. This is amongst the best in the industry. ALSN outperforms 88.46% of its industry peers.
  • ALSN had an Average Return On Invested Capital over the past 3 years of 12.92%. This is above the industry average of 10.14%.
  • The last Return On Invested Capital (15.77%) for ALSN is above the 3 year average (12.92%), which is a sign of increasing profitability.
  • ALSN's Profit Margin of 21.63% is amongst the best of the industry. ALSN outperforms 98.46% of its industry peers.
  • The Operating Margin of ALSN (29.75%) is better than 100.00% of its industry peers.
  • With an excellent Gross Margin value of 48.25%, ALSN belongs to the best of the industry, outperforming 93.85% of the companies in the same industry.

Health Assessment of NYSE:ALSN

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:ALSN scores a 5 out of 10:

  • With a decent Debt to FCF ratio value of 4.14, ALSN is doing good in the industry, outperforming 64.62% of the companies in the same industry.
  • A Current Ratio of 2.41 indicates that ALSN has no problem at all paying its short term obligations.
  • With a decent Current ratio value of 2.41, ALSN is doing good in the industry, outperforming 63.08% of the companies in the same industry.
  • Looking at the Quick ratio, with a value of 1.86, ALSN is in the better half of the industry, outperforming 75.38% of the companies in the same industry.

ChartMill's Evaluation of Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ALSN boasts a 6 out of 10:

  • ALSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.63%, which is quite impressive.
  • ALSN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.97% yearly.
  • ALSN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.50%.
  • Based on estimates for the next years, ALSN will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.52% on average per year.
  • 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.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of ALSN

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.

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ALLISON TRANSMISSION HOLDING

NYSE:ALSN (2/23/2024, 11:01:51 AM)

73.27

-0.12 (-0.16%)

ALSN News

News Image2 days ago - Allison Transmission Holdings Inc.Allison Transmission Announces a 9% Increase to the Quarterly Dividend and the Annual Stockholders Meeting and Record Date
News Image3 days ago - Seeking AlphaAllison Transmission announces investment in non-rare earth magnets maker Niron Magnetics

Allison Ventures invests in Niron Magnetics, a company specializing in sustainable non-rare earth permanent magnets, to address the demand for eco-friendly...

News Image3 days ago - Allison TransmissionAllison Ventures Announces Strategic Investment in Niron Magnetics
News Image9 days ago - The Motley FoolWhy Allison Transmission Stock Jumped Today

The commercial-duty transmission manufacturer just capped a record year.

News Image9 days ago - Seeking AlphaAllison Transmission shares rally on record sales (ALSN)

Allison Transmission shares set all-time high on record Q4, 2024 sales. Read more here.

News Image9 days ago - Investor's Business DailyStock Chart Special: Allison Sets Up For a Breakaway Gap

Allison shares rocketed on Q4 results Wednesday, setting the stage for a stock chart maneuver known as a breakaway gap.

News Image10 days ago - Allison Transmission Holdings Inc.Allison Transmission Announces Record Fourth Quarter and Full Year 2023 Results
News Image11 days ago - ChartmillExploring NYSE:ALSN's dividend characteristics.

Why the dividend investor may take a look at ALLISON TRANSMISSION HOLDING (NYSE:ALSN).

News Image15 days ago - Market News VideoInteresting ALSN Put And Call Options For March 15th
News Image15 days ago - Allison TransmissionAllison Transmission’s 3414 Regional Haul Series™ Selected by One of the World’s Largest Logistics Companies for Natural Gas-Powered Fleet
News Image16 days ago - Allison TransmissionAllison Transmission Partners with Volare to Introduce South America’s First School Buses Equipped with Fully Automatic Transmissions
News Image16 days ago - ChartmillNYSE:ALSN is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Despite its impressive fundamentals, ALLISON TRANSMISSION HOLDING (NYSE:ALSN) remains undervalued.

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