Allegion (ALLE) AI Stock Analysis

• Market Cap: $13.49B
• Dividend Yield: 1.27%
• Average Volume (3M): 906.78K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.62
• Revenue Growth: 6.87%
• EPS Growth: 13.53%
• Country: US
• Employees: 14,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 1.94
• Shares Outstanding: 86,145,485
• 10 Day Avg. Volume: 1,088,823
• 30 Day Avg. Volume: 906,782
• PEG Ratio: 2.27
• Price to Book (P/B): 6.61
• Price to Sales (P/S): 3.36
• P/FCF Ratio: 19.95
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 3.80
• Enterprise Value/Gross Profit: 8.40
• Enterprise Value/Ebitda: 15.44
• 1Y Price Target: $176.20
• Price Target Upside: 12.49% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 8.8
• Revenue Forecast (FY): $4.32B

• Rating: 72 Outperform
• Price Target: $200.00 ▲(27.68% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid financial performance (profitability, cash conversion, and improved leverage) and a generally positive earnings outlook with supportive 2026 guidance. This is tempered by a fairly rich valuation and technical indicators that suggest the stock may be overextended in the near term, plus some 2025 financial statement comparability/data-quality flags.

Positive Factors

Strong Cash Generation

Allegion’s elevated operating cash flow (~$784M) and free cash flow (~$686M) in 2025 indicate durable cash conversion. Sustained cash generation supports repeatable dividend increases, disciplined M&A, reinvestment and working-capital needs, reducing refinancing and cyclical risk over the medium term.

Improved Leverage / Balance Sheet

A meaningful decline in debt-to-equity to ~0.80x reflects material deleveraging and a stronger capital base. Lower leverage increases financial flexibility for strategic investments, cushions cash flow variability in downturns and supports capital returns without materially raising refinancing or covenant risk.

Accretive M&A and Electronics Growth

Management’s ~$630M of targeted, accretive acquisitions expanded electronics and software capabilities while Electronics grew low-double-digits. This shifts the portfolio toward higher-growth, tech-enabled products, diversifying revenue and improving structural growth and margin upside over the medium term.

Negative Factors

U.S. Residential Softness

Sustained weakness in U.S. residential volumes reduces a sizeable addressable market and creates persistent top-line pressure. Volume declines can offset pricing gains and cause deleveraging in segment margins, limiting organic growth and making near-term recovery dependent on macro and housing-cycle improvements.

International Organic Weakness / Reliance on M&A & FX

Reported international growth was materially supported by acquisitions and FX rather than underlying demand. Continued dependence on inorganic drivers raises sustainability risk: if acquisitive cadence slows or currency tailwinds reverse, reported growth could decelerate sharply versus core organic performance.

2025 Income Statement Comparability / Margin Data Gaps

Missing or zeroed gross profit/margin fields in 2025 impair confidence in reported margin trends and comparability. This complicates forecasting and obscures whether recent margin expansion is structural or one-time, increasing uncertainty about long-term margin sustainability and investor assessment of operating performance.

Allegion Business Overview & Revenue Model

Company Description

Allegion plc manufactures and sells mechanical and electronic security products and solutions worldwide. The company offers door closers, controls, and exit devices; locks, locksets, portable locks, and key systems and services; electronic security products and access control systems; time, attendance, and workforce productivity systems; doors and door systems; and other accessories. The company sells its products and solutions to end-users in commercial, institutional, and residential facilities, including education, healthcare, government, hospitality, commercial office, and single and multi-family residential markets under the CISA, Interflex, LCN, Schlage, SimonsVoss, and Von Duprin brands. It sells its products and solutions through distribution and retail channels, such as specialty distribution, e-commerce, and wholesalers, as well as through various retail channels comprising do-it-yourself home improvement centers, on-line and e-commerce platforms, and small specialty showroom outlets. Allegion plc was incorporated in 2013 and is headquartered in Dublin, Ireland.

How the Company Makes Money

Allegion generates revenue through the sale of its security products, which are categorized into two main segments: Residential and Commercial. The Residential segment focuses on locks and electronic security solutions for homes, while the Commercial segment encompasses a broader range of products designed for businesses, including high-security locking systems and access control technologies. Key revenue streams include direct sales to construction and building projects, distribution through wholesalers, and partnerships with contractors and architects. Additionally, Allegion benefits from ongoing maintenance and service contracts, particularly in commercial settings, which provide a steady income stream. The company's innovation in electronic security solutions and smart home technologies further enhances its market position and revenue potential.

Allegion Financial Statement Overview

Summary

Overall fundamentals are solid: consistent revenue growth through 2021–2025 with strong profitability and cash conversion, plus improved leverage (debt-to-equity down to ~0.80x in 2025). Key offsets are data-quality/comparability concerns in 2025 income statement fields (gross profit/margins reported as 0) and a modest free-cash-flow decline in 2025 despite higher earnings.

Income Statement

Revenue has grown consistently from 2021–2025, with a sharp re-acceleration in 2025 (2025 revenue growth ~220% vs low-single-digit in 2024), and profitability is solid with net margins holding around ~15–17% over the period. EBITDA margins are healthy (~18%–24%) and generally stable. Key weakness: 2025 gross profit and several margin fields appear reported as 0, which reduces confidence in margin quality/trend for the latest year despite strong EBIT/EBITDA and net income.

Balance Sheet

Leverage has improved meaningfully: debt-to-equity declined from ~2.22x (2022) to ~0.80x (2025), supported by a large step-up in equity in 2025. Returns on equity are strong across the period (roughly ~26%–64%), signaling good profitability versus the capital base. Main risk: total debt remains sizable (~$2.0B in 2025), and the sharp equity increase in 2025 creates a year-to-year comparability flag that investors should validate.

Cash Flow

Cash generation is robust: operating cash flow rose to ~$784M in 2025 and free cash flow to ~$686M, with free cash flow consistently high versus net income (~0.86–0.91x across years). Operating cash flow has generally covered accounting earnings (around ~1.04x in 2025). Weakness: free cash flow growth turned negative in 2025 (-2.38%) after growth in prior years, suggesting reinvestment/working-capital or conversion softness in the latest period.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.07B	3.77B	3.65B	3.27B	2.87B
Gross Profit	1.84B	1.67B	1.58B	1.32B	1.20B
EBITDA	989.20M	916.90M	821.90M	688.30M	657.30M
Net Income	643.80M	597.50M	540.40M	458.00M	483.00M
Balance Sheet
Total Assets	5.22B	4.49B	4.31B	3.99B	3.05B
Cash, Cash Equivalents and Short-Term Investments	356.20M	503.80M	468.10M	288.00M	397.90M
Total Debt	2.28B	2.15B	2.02B	2.09B	1.44B
Total Liabilities	3.16B	2.99B	2.99B	3.05B	2.29B
Stockholders Equity	2.07B	1.50B	1.32B	941.80M	759.10M
Cash Flow
Free Cash Flow	685.70M	582.90M	516.40M	395.50M	443.20M
Operating Cash Flow	783.80M	675.00M	600.60M	459.50M	488.60M
Investing Cash Flow	-685.50M	-228.40M	-129.10M	-994.10M	-31.60M
Financing Cash Flow	-266.70M	-394.50M	-298.70M	437.00M	-529.30M

Allegion Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 156.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLE, the sentiment is Negative. The current price of 156.64 is below the 20-day moving average (MA) of 167.17, below the 50-day MA of 164.73, and below the 200-day MA of 161.46, indicating a bearish trend. The MACD of -2.53 indicates Positive momentum. The RSI at 37.74 is Neutral, neither overbought nor oversold. The STOCH value of 50.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALLE.

Allegion Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSSC	78 Outperform	$1.55B	27.53	26.42%	1.29%	-2.28%	-9.94%
ALLE	72 Outperform	$13.49B	21.24	36.08%	1.27%	6.87%	13.53%
MSA	72 Outperform	$7.47B	22.52	22.22%	1.30%	3.31%	2.58%
ADT	70 Outperform	$5.62B	10.53	15.84%	2.73%	4.77%	-22.78%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BCO	62 Neutral	$5.09B	24.49	86.51%	0.85%	3.07%	48.57%
REZI	56 Neutral	$5.64B	9.68	-16.93%	―	15.45%	-488.24%

Allegion Corporate Events

Allegion Amends Credit Agreement, Expands Facility

On December 9, 2025, Allegion plc announced an amendment to its credit agreement, increasing its revolving credit facility from $750 million to $1 billion and extending the maturity date to May 20, 2030. This amendment allows Allegion to request an additional $500 million under certain conditions and involved borrowing $197.2 million to repay an outstanding term loan, resulting in no change to the company’s total debt.

The most recent analyst rating on (ALLE) stock is a Hold with a $187.00 price target. To see the full list of analyst forecasts on Allegion stock, see the ALLE Stock Forecast page.