Allison Transmission Holdings (ALSN) AI Stock Analysis

• Market Cap: $6.72B
• Dividend Yield: 1.3%
• Average Volume (3M): 890.01K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 1.02
• Revenue Growth: -4.21%
• EPS Growth: -0.45%
• Country: US
• Employees: 4,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 1.63
• Shares Outstanding: 83,228,714
• 10 Day Avg. Volume: 1,113,858
• 30 Day Avg. Volume: 890,006
• PEG Ratio: 1.05
• Price to Book (P/B): 5.69
• Price to Sales (P/S): 2.92
• P/FCF Ratio: 14.29
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 2.82
• Enterprise Value/Gross Profit: 5.83
• Enterprise Value/Ebitda: 8.05
• 1Y Price Target: $88.25
• Price Target Upside: 8.32% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 7.69
• Revenue Forecast (FY): $3.00B

• Rating: 68 Neutral
• Price Target: $89.00 ▲(9.24% Upside)

Allison Transmission Holdings' overall stock score reflects strong financial performance and strategic resilience despite a challenging market environment. The technical indicators suggest bearish momentum, while the valuation indicates potential undervaluation. Earnings call insights reveal strategic positioning for future growth, balancing the current revenue challenges.

Positive Factors

Cash Generation

Strong cash generation supports strategic investments and capital allocation, enhancing long-term business resilience and growth potential.

Defense Market Growth

Robust growth in the defense sector strengthens revenue streams and diversifies market exposure, providing stability against cyclical downturns.

Strategic Acquisition

The acquisition is expected to enhance market position and operational synergies, contributing to long-term competitive advantages and growth.

Negative Factors

Revenue Growth Challenges

Declining revenue growth may indicate challenges in market expansion and product demand, potentially impacting future profitability.

North America Market Decline

Weakness in a key market could pressure overall sales and profitability, necessitating strategic adjustments to mitigate long-term impacts.

Tariff Impact

New tariffs on trucks could increase costs and reduce competitiveness in the U.S. market, affecting sales and profit margins over time.

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 vehicles worldwide. It offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company markets its transmissions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. It also sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its transmissions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. The company serves customers through an independent network of approximately 1,400 independent distributor and dealer locations. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana.

How the Company Makes Money

Allison Transmission generates revenue primarily through the sale of its automatic transmissions and propulsion systems to original equipment manufacturers (OEMs) and aftermarket customers. The company has a diversified revenue model that includes both new product sales and aftermarket parts and services, which provide ongoing support and maintenance for its products. Key revenue streams include the sale of transmissions to commercial vehicle manufacturers, parts sales, and service contracts. Additionally, strategic partnerships with major truck manufacturers and military contracts contribute significantly to its earnings, as these relationships ensure a steady demand for its products in various markets.

Allison Transmission Holdings Financial Statement Overview

Summary

Allison Transmission Holdings shows strong profitability and cash flow generation, with stable margins and improving leverage ratios. However, the revenue growth has faced recent challenges, impacting the overall financial performance score.

Income Statement

Allison Transmission Holdings demonstrates strong profitability with a consistent gross profit margin around 48% and a net profit margin improving to 23.8% in the TTM. However, the revenue growth rate has declined by 4.1% in the TTM, indicating potential challenges in sales expansion. Despite this, the EBIT and EBITDA margins remain robust, reflecting efficient cost management.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 1.38 in the TTM, which is an improvement from previous years, indicating better leverage management. Return on equity is strong at 45.6%, showcasing effective use of equity capital. However, the equity ratio remains relatively low, suggesting a higher reliance on debt financing.

Cash Flow

Cash flow analysis reveals a healthy free cash flow growth rate of 10.5% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.74, reflecting efficient conversion of earnings into cash. The free cash flow to net income ratio is also solid at 86.5%, underscoring the company's ability to generate cash relative to its profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.07B	3.23B	3.04B	2.77B	2.40B	2.08B
Gross Profit	1.48B	1.53B	1.47B	1.30B	1.15B	998.00M
EBITDA	1.07B	1.11B	1.09B	918.00M	838.00M	678.00M
Net Income	699.00M	731.00M	673.00M	531.00M	442.00M	299.00M
Balance Sheet
Total Assets	5.52B	5.34B	5.03B	4.67B	4.46B	4.48B
Cash, Cash Equivalents and Short-Term Investments	902.00M	781.00M	562.00M	232.00M	127.00M	310.00M
Total Debt	2.40B	2.42B	2.52B	2.51B	2.51B	2.51B
Total Liabilities	3.68B	3.69B	3.79B	3.80B	3.82B	3.72B
Stockholders Equity	1.84B	1.65B	1.23B	874.00M	634.00M	756.00M
Cash Flow
Free Cash Flow	786.00M	658.00M	659.00M	490.00M	460.00M	446.00M
Operating Cash Flow	804.00M	801.00M	784.00M	657.00M	635.00M	561.00M
Investing Cash Flow	-185.00M	-147.00M	-129.00M	-183.00M	-212.00M	-111.00M
Financing Cash Flow	-508.00M	-427.00M	-332.00M	-367.00M	-604.00M	-335.00M

Allison Transmission Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 81.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALSN, the sentiment is Negative. The current price of 81.47 is below the 20-day moving average (MA) of 81.82, below the 50-day MA of 84.94, and below the 200-day MA of 93.66, indicating a bearish trend. The MACD of -0.98 indicates Negative momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 51.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALSN.

Allison Transmission Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LEA	75 Outperform	$5.66B	13.36	8.96%	2.84%	-1.90%	-13.86%
ALV	74 Outperform	$9.22B	12.54	31.09%	2.46%	0.84%	26.17%
BWA	72 Outperform	$9.60B	71.91	2.24%	1.11%	0.08%	-83.69%
VC	71 Outperform	$2.90B	9.55	23.16%	0.25%	-4.03%	-39.51%
ALSN	68 Neutral	$6.72B	9.89	40.38%	1.30%	-4.21%	-0.45%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	54 Neutral	$2.51B	48.64	-4.82%	1.87%	-18.23%	―

Allison Transmission Holdings Corporate Events

Allison Transmission Reports Strong Q3 2025 Results

Allison Transmission Holdings Inc., a prominent designer and manufacturer of propulsion solutions for commercial and defense vehicles, is the largest global producer of medium- and heavy-duty fully automatic transmissions. The company operates in over 150 countries, serving diverse sectors including on-highway vehicles, buses, off-highway vehicles, and defense vehicles.

Allison Transmission’s Earnings Call Highlights Growth and Challenges

Allison Transmission’s latest earnings call painted a picture of both triumphs and challenges. The company celebrated notable achievements, such as impressive growth in the defense market and record sales outside North America. However, these successes were contrasted by declines in other key markets and uncertainties related to regulations and tariffs. Despite these hurdles, the call maintained an optimistic outlook on future growth opportunities.

Allison Transmission’s Strong Q2 and Strategic Acquisition

Allison Transmission, a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles, is renowned for its fully automatic transmissions used in a variety of applications worldwide. The company operates in the automotive and defense sectors, with a significant global presence.