Allison Transmission (ALSN)
NYSE:ALSN
Top Page
Allison Transmission Holdings
(NYSE:ALSN)
Select Model
Select Model
Rating:74Outperform
Price Target:
$131.00
▲(10.11% Upside)
Action:ReiteratedDate:02/24/26
The score is primarily driven by strong cash flow generation and solid profitability, supported by an upward technical trend. It is tempered by leverage and cautious 2026 guidance that assumes ongoing demand softness and includes one-time costs, while valuation appears reasonable but not meaningfully boosted by dividend yield.
Positive Factors
Cash generation
Allison's operating cash flow has consistently covered net income (coverage above ~1.3x and ~1.82x in 2025) and free cash flow rebounded sharply in 2025. Durable cash conversion supports capex, debt reduction, share repurchases and reinvestment even through cyclical troughs.
Negative Factors
Elevated leverage
Material leverage, despite improvement from earlier peaks, limits financial flexibility in cyclical markets. High debt increases interest and refinancing risk, constrains capital allocation choices and makes the company more sensitive to sustained revenue weakness.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Allison's operating cash flow has consistently covered net income (coverage above ~1.3x and ~1.82x in 2025) and free cash flow rebounded sharply in 2025. Durable cash conversion supports capex, debt reduction, share repurchases and reinvestment even through cyclical troughs.
Read all positive factors
Allison Transmission Holdings (ALSN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.85B
Dividend Yield1.07%
Average Volume (3M)975.90K
Price to Earnings (P/E)13.2
Beta (1Y)0.96
Revenue Growth-4.21%
EPS Growth-0.45%
CountryUS
Employees4,000
SectorGeneral
Sector StrengthN/A
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.18
Shares Outstanding82,805,595
10 Day Avg. Volume965,435
30 Day Avg. Volume975,904
Financial Highlights & Ratios
PEG Ratio-1.13
Price to Book (P/B)4.40
Price to Sales (P/S)2.73
P/FCF Ratio12.67
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue3.69
Enterprise Value/Gross Profit7.60
Enterprise Value/Ebitda10.94
Forecast
1Y Price Target
$117.50Price Target Upside-1.24% Downside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)9.14
Revenue Forecast (FY)$5.73B
Allison Transmission Holdings Business Overview & Revenue Model
Company Description
Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium-and heavy-duty commercial vehicles, and medium-and heavy-tactical U.S. defense ve...
How the Company Makes Money
Allison Transmission generates revenue primarily through the sale of its transmissions and propulsion systems to OEMs (Original Equipment Manufacturers) and through aftermarket parts and services. The company's key revenue streams include direct s...
Allison Transmission Holdings Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Neutral
The call balanced strategic progress and financial resilience against persistent near-term demand and macro headwinds. Positives include the completed Off-Highway acquisition, strong cash generation, margin expansion, defense market growth (+26% to $267M), and a clear multi-year synergy target of $120M. Offsetting these are a 7% decline in full-year revenue, softness in North America On-Highway (medium-duty and vocational/Class 8), one-time charges (impairment and acquisition/integration costs), tariff and inflation pressures, and the decision to not assume synergy benefits in 2026 guidance. Management’s tone was cautiously optimistic with conservative 2026 assumptions and expectation of accretion from the acquisition over time.Positive Updates
Acquisition of Dana Off-Highway Completed
Acquisition closed January 1, creating combined company with ~14,000 employees in 25 countries; Allison expects $120 million annual run-rate synergies over the next few years (no synergies assumed in 2026 guidance).
Negative Updates
Revenue Decline (Full Year and Q4)
Full year 2025 revenue declined 7% year-over-year. Fourth quarter net sales were $737 million, down 7% versus Q4 2024.
Read all updates
Q4-2025 Updates
Positive
Negative
Acquisition of Dana Off-Highway Completed
Acquisition closed January 1, creating combined company with ~14,000 employees in 25 countries; Allison expects $120 million annual run-rate synergies over the next few years (no synergies assumed in 2026 guidance).
Read all positive updates
Company Guidance
Allison's 2026 guidance calls for consolidated net sales of $5.575–$5.925 billion, comprised of Allison Transmission net sales of $3.025–$3.175 billion and Allison Off‑Highway Drive & Motion Systems net sales of $2.550–$2.750 billion; consolidated net income of $600–$750 million (which includes roughly $70 million of one‑time pretax separation/integration/restructuring expenses); and consolidated adjusted EBITDA of $1.365–$1.515 billion (midpoint ~25% adjusted EBITDA margin). The company expects consolidated net cash provided by operating activities of $970 million–$1.10 billion, consolidated capital expenditures of $295–$315 million (including about $45 million of one‑time separation/integration CapEx), and consolidated adjusted free cash flow of $655–$805 million, noting the operating cash guidance includes roughly $55 million of one‑time acquisition cash outlays. Management said no synergies were modeled into the 2026 guide but reiterated a $120 million annual run‑rate synergy target over the next few years and said full synergy capture plus moderate end‑market improvement could push consolidated adjusted EBITDA margins to ~27%–29%; the guide also assumes continued softness in North America On‑Highway and key Off‑Highway end markets.Allison Transmission Holdings Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
58
Neutral
Cash Flow
86
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.01B | 3.23B | 3.04B | 2.77B | 2.40B |
| Gross Profit | 1.46B | 1.53B | 1.47B | 1.30B | 1.15B |
| EBITDA | 1.03B | 1.11B | 1.09B | 918.00M | 838.00M |
| Net Income | 623.00M | 731.00M | 673.00M | 531.00M | 442.00M |
Balance Sheet | |||||
| Total Assets | 6.08B | 5.34B | 5.03B | 4.67B | 4.46B |
| Cash, Cash Equivalents and Short-Term Investments | 1.50B | 781.00M | 555.00M | 232.00M | 127.00M |
| Total Debt | 2.92B | 2.42B | 2.51B | 2.52B | 2.53B |
| Total Liabilities | 4.21B | 3.69B | 3.79B | 3.80B | 3.82B |
| Stockholders Equity | 1.87B | 1.65B | 1.23B | 874.00M | 634.00M |
Cash Flow | |||||
| Free Cash Flow | 649.00M | 658.00M | 659.00M | 490.00M | 460.00M |
| Operating Cash Flow | 824.00M | 801.00M | 784.00M | 657.00M | 635.00M |
| Investing Cash Flow | -184.00M | -147.00M | -129.00M | -183.00M | -212.00M |
| Financing Cash Flow | 69.00M | -427.00M | -332.00M | -367.00M | -604.00M |
Allison Transmission Holdings Technical Analysis
Positive
118.97
Price Trends
114.99
Positive
103.15
Positive
95.62
Positive
Market Momentum
-0.12
Positive
57.49
Neutral
82.49
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALSN, the sentiment is Positive. The current price of 118.97 is above the 20-day moving average (MA) of 117.58, above the 50-day MA of 114.99, and above the 200-day MA of 95.62, indicating a bullish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 57.49 is Neutral, neither overbought nor oversold. The STOCH value of 82.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALSN.
Allison Transmission Holdings Risk Analysis
Allison Transmission Holdings disclosed 31 risk factors in its most recent earnings report. Allison Transmission Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Allison Transmission Holdings Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $9.85B | 13.20 | 34.97% | 1.07% | -4.21% | -0.45% | |
72 Outperform | $6.20B | 14.06 | 8.79% | 2.63% | -1.90% | -13.86% | |
72 Outperform | $2.35B | 12.87 | 13.90% | 0.57% | -4.03% | -39.51% | |
69 Neutral | $7.85B | 12.37 | 29.57% | 2.60% | 0.84% | 26.17% | |
62 Neutral | $11.62B | 35.20 | 4.80% | 1.24% | 0.08% | -83.69% | |
62 Neutral | $3.66B | 38.91 | -2.91% | 1.70% | -18.23% | ― | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
ALSN
Allison Transmission Holdings
116.32
21.35
22.48%
ALV
Autoliv
105.11
18.44
21.28%
BWA
BorgWarner
54.76
26.97
97.04%
DAN
Dana Incorporated
32.85
19.96
154.79%
LEA
Lear
121.95
36.53
42.77%
VC
Visteon
87.84
10.19
13.12%
Allison Transmission Holdings Corporate Events
Business Operations and StrategyExecutive/Board ChangesM&A TransactionsPrivate Placements and Financing
Allison Transmission Finalizes Major Dana Off-Highway Acquisition
Positive
Jan 2, 2026
On January 1, 2026, Allison Transmission Holdings completed its $2.732 billion acquisition of Dana Incorporated’s Off-Highway Drive Motion Systems business, creating a combined enterprise with about $5.5 billion in revenue and operations ac...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.