TransDigm Group INC (TDG) stock analysis

P/E below its 5-year median

TransDigm's P/E of 33.9 is below its own 5-year median of 45.9.

P/E above the industry

TransDigm's P/E of 33.9 is above the Aircraft and Parts median of 26.3.

EV/EBITDA below its 5-year median

TransDigm's EV/EBITDA of 18.7 is below its 5-year median of 25.6.

P/S above the industry

TransDigm's price-to-sales of 6.30 is above the Aircraft and Parts median of 2.28 (book value is negative, so we use sales).

Trading below fair value

The share price of $1203.00 is below our fair value estimate of $1348.93.

Margin of safety under 20%

The price is 10.8% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 17.0% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 17.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 1.6% over the last twelve months, against a 5-year average of 25.4% a year.

Growing faster than the industry

Revenue grew 19.5% over the last twelve months; the Aircraft and Parts median is 18.0%.

Guidance raised

TransDigm raised its fiscal 2026 Net sales outlook on Aug 4, 2026.

Gross margin slipping

Gross margin was 59.2% over the last twelve months, against 60.1% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 19.1%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 25.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 20.0% over the last twelve months, against a 5-year average of 20.1%.

Net margin above the industry

TransDigm's net margin of 20.0% is above the Aircraft and Parts median of 5.5%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 6.5% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.90 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.78; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

TransDigm has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.