ALLISON TRANSMISSION HOLDING (ALSN) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:ALSN • US01973R1014
110.97 USD
+2.27 (+2.09%)
Last: Feb 2, 2026, 01:42 PM
We assign a fundamental rating of 7 out of 10 to ALSN. ALSN was compared to 132 industry peers in the Machinery industry. ALSN gets an excellent profitability rating and is at the same time showing great financial health properties. ALSN is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings would make ALSN suitable for value and quality investing!
1. Profitability
1.1 Basic Checks
- In the past year ALSN was profitable.
- In the past year ALSN had a positive cash flow from operations.
- ALSN had positive earnings in each of the past 5 years.
- ALSN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 12.67%, ALSN belongs to the top of the industry, outperforming 90.15% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 37.97%, ALSN belongs to the top of the industry, outperforming 96.21% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 15.60%, ALSN belongs to the best of the industry, outperforming 90.15% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for ALSN is significantly above the industry average of 10.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.67% | ||
| ROE | 37.97% | ||
| ROIC | 15.6% |
ROA(3y)12.82%
ROA(5y)11.01%
ROE(3y)53.2%
ROE(5y)53.78%
ROIC(3y)16.17%
ROIC(5y)14.56%
1.3 Margins
- With an excellent Profit Margin value of 22.78%, ALSN belongs to the best of the industry, outperforming 97.73% 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.
- Looking at the Operating Margin, with a value of 31.70%, ALSN belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- ALSN's Operating Margin has been stable in the last couple of years.
- The Gross Margin of ALSN (48.29%) is better than 90.15% of its industry peers.
- In the last couple of years the Gross Margin of ALSN has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.7% | ||
| PM (TTM) | 22.78% | ||
| GM | 48.29% |
OM growth 3Y3.47%
OM growth 5Y-1.48%
PM growth 3Y7.2%
PM growth 5Y0.25%
GM growth 3Y-0.12%
GM growth 5Y-1.71%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ALSN is still creating some value.
- Compared to 1 year ago, ALSN has less shares outstanding
- ALSN has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ALSN has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.87 indicates that ALSN is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of ALSN (2.87) is comparable to the rest of the industry.
- ALSN has a debt to FCF ratio of 3.82. This is a good value and a sign of high solvency as ALSN would need 3.82 years to pay back of all of its debts.
- ALSN's Debt to FCF ratio of 3.82 is fine compared to the rest of the industry. ALSN outperforms 61.36% of its industry peers.
- ALSN has a Debt/Equity ratio of 1.30. This is a high value indicating a heavy dependency on external financing.
- ALSN has a worse Debt to Equity ratio (1.30) than 81.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | 3.82 | ||
| Altman-Z | 2.87 |
ROIC/WACC1.65
WACC9.45%
2.3 Liquidity
- ALSN has a Current Ratio of 3.82. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
- ALSN has a Current ratio of 3.82. This is amongst the best in the industry. ALSN outperforms 87.12% of its industry peers.
- ALSN has a Quick Ratio of 3.06. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
- ALSN has a better Quick ratio (3.06) than 88.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.82 | ||
| Quick Ratio | 3.06 |
3. Growth
3.1 Past
- ALSN shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.61%.
- ALSN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.10% yearly.
- The Revenue has decreased by -4.21% in the past year.
- The Revenue has been growing slightly by 3.63% on average over the past years.
EPS 1Y (TTM)-0.61%
EPS 3Y26.35%
EPS 5Y11.1%
EPS Q2Q%-28.19%
Revenue 1Y (TTM)-4.21%
Revenue growth 3Y10.32%
Revenue growth 5Y3.63%
Sales Q2Q%-15.9%
3.2 Future
- ALSN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.03% yearly.
- ALSN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.49% yearly.
EPS Next Y-6.57%
EPS Next 2Y0.84%
EPS Next 3Y7.51%
EPS Next 5Y14.03%
Revenue Next Year-6.76%
Revenue Next 2Y-3.49%
Revenue Next 3Y1.45%
Revenue Next 5Y14.49%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 13.60 indicates a correct valuation of ALSN.
- ALSN's Price/Earnings ratio is rather cheap when compared to the industry. ALSN is cheaper than 93.18% of the companies in the same industry.
- When comparing the Price/Earnings ratio of ALSN to the average of the S&P500 Index (28.32), we can say ALSN is valued rather cheaply.
- With a Price/Forward Earnings ratio of 13.13, ALSN is valued correctly.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 90.15% of the companies listed in the same industry.
- ALSN's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.6 | ||
| Fwd PE | 13.13 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaply inside the industry as 87.12% of the companies are valued more expensively.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 86.36% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.71 | ||
| EV/EBITDA | 9.62 |
4.3 Compensation for Growth
- The excellent profitability rating of ALSN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.23
EPS Next 2Y0.84%
EPS Next 3Y7.51%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.97%, ALSN is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 1.01, ALSN pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.83, ALSN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
5.2 History
- The dividend of ALSN is nicely growing with an annual growth rate of 10.94%!
- ALSN has been paying a dividend for at least 10 years, so it has a reliable track record.
- ALSN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.94%
Div Incr Years5
Div Non Decr Years12
5.3 Sustainability
- 12.88% of the earnings are spent on dividend by ALSN. This is a low number and sustainable payout ratio.
- The dividend of ALSN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP12.88%
EPS Next 2Y0.84%
EPS Next 3Y7.51%
ALLISON TRANSMISSION HOLDING / ALSN FAQ
Can you provide the ChartMill fundamental rating for ALLISON TRANSMISSION HOLDING?
ChartMill assigns a fundamental rating of 7 / 10 to ALSN.
What is the valuation status of ALLISON TRANSMISSION HOLDING (ALSN) stock?
ChartMill assigns a valuation rating of 7 / 10 to ALLISON TRANSMISSION HOLDING (ALSN). This can be considered as Undervalued.
What is the profitability of ALSN stock?
ALLISON TRANSMISSION HOLDING (ALSN) has a profitability rating of 8 / 10.
How financially healthy is ALLISON TRANSMISSION HOLDING?
The financial health rating of ALLISON TRANSMISSION HOLDING (ALSN) is 7 / 10.
Is the dividend of ALLISON TRANSMISSION HOLDING sustainable?
The dividend rating of ALLISON TRANSMISSION HOLDING (ALSN) is 6 / 10 and the dividend payout ratio is 12.88%.