ALLISON TRANSMISSION HOLDING (NYSE:ALSN) was identified as a decent value stock by our stock screener. The company shows solid profitability and financial health while trading at a reasonable valuation, making it a candidate for value investors. Below, we examine the key aspects of its fundamental profile.
Valuation
ALLISON TRANSMISSION scores well on valuation metrics, with a ChartMill Valuation Rating of 8 out of 10. Key highlights include:
- A Price/Earnings (P/E) ratio of 11.87, significantly below the S&P 500 average of 26.31.
- A Forward P/E of 10.10, indicating expectations of continued earnings growth.
- The stock is cheaper than 88% of its industry peers based on P/E.
- An Enterprise Value to EBITDA ratio that suggests the stock is undervalued compared to 79% of competitors.
Profitability
The company excels in profitability, earning a 9/10 rating. Notable strengths:
- Return on Equity (ROE) of 45.29%, outperforming 96% of industry peers.
- Operating Margin of 31.45%, among the best in its sector.
- Profit Margin of 23.55%, placing it in the top 2% of its industry.
Financial Health
With a Health Rating of 7/10, ALLISON TRANSMISSION maintains a stable financial position:
- Current Ratio of 3.05, indicating strong short-term liquidity.
- Debt to Free Cash Flow ratio of 3.69, suggesting manageable debt levels.
- Share buybacks over the past five years reflect confidence in the business.
Growth
While growth is more moderate, the company still holds a 4/10 rating:
- EPS growth of 15.35% over the past year.
- Revenue growth of 3.86% year-over-year.
- Future EPS growth is expected at 6.70% annually, though slower than historical rates.
Our Decent Value Stocks screener lists more stocks with similar characteristics and is updated daily.
For a deeper dive, review the full fundamental report on ALLISON TRANSMISSION.
Disclaimer
This is not investment advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.
