Allison Transmission Holdings (ALSN) AI Stock Analysis

• Market Cap: $8.18B
• Dividend Yield: 1.1%
• Average Volume (3M): 989.66K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.96
• 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: 1,173,863
• 30 Day Avg. Volume: 989,664
• 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: 1.06
• Enterprise Value/Revenue: 2.82
• Enterprise Value/Gross Profit: 5.83
• Enterprise Value/Ebitda: 8.05
• 1Y Price Target: $93.40
• Price Target Upside: -5.93% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $105.00 ▲(5.75% Upside)

Allison Transmission Holdings' overall stock score reflects strong valuation and strategic corporate actions, despite challenges in revenue growth and market conditions. The company's robust profitability and cash flow generation, coupled with strategic acquisitions, position it well for future growth. However, technical indicators suggest caution due to overbought conditions.

Positive Factors

Strategic Acquisitions

The acquisition of Dana's Off-Highway business enhances Allison's market positioning in the off-highway vehicle sector, potentially driving long-term growth and diversification.

Defense Segment Growth

Significant growth in the defense segment indicates successful strategic initiatives and partnerships, contributing to revenue diversification and stability.

Technology Innovation

Innovative technologies like 'Neutral at Stop' enhance product offerings, improving fuel efficiency and sustainability, which can strengthen market competitiveness.

Negative Factors

Revenue Decline

A significant decline in revenue suggests challenges in demand, particularly in the North American On-Highway market, potentially impacting future earnings.

Global Economic Uncertainty

Macroeconomic uncertainties, including tariffs and trade policies, pose risks to demand and revenue, affecting long-term market stability.

Decreased Net Income

A decline in net income, partly due to acquisition-related expenses, may strain financial resources and impact profitability in the near term.

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 transmissions and propulsion systems to OEMs (Original Equipment Manufacturers) and through aftermarket parts and services. The company's key revenue streams include direct sales of transmission systems to various sectors such as commercial trucks, buses, and military applications. Additionally, Allison earns revenue from the sale of replacement parts, service contracts, and maintenance services that support its products over their lifecycle. The company's strong relationships with major OEMs, as well as its focus on technological advancements and expanding its product offerings into hybrid and electric vehicle markets, significantly contribute to its earnings. Furthermore, partnerships with leading vehicle manufacturers enhance its market presence and drive consistent demand for its products.

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	555.00M	232.00M	127.00M	310.00M
Total Debt	2.40B	2.42B	2.51B	2.52B	2.53B	2.53B
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	685.00M	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: Positive
• Last Price: 99.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 99.29 is above the 20-day moving average (MA) of 92.54, above the 50-day MA of 85.86, and above the 200-day MA of 90.76, indicating a bullish trend. The MACD of 4.18 indicates Negative momentum. The RSI at 74.84 is Negative, neither overbought nor oversold. The STOCH value of 74.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALSN.

Allison Transmission Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALV	78 Outperform	$9.09B	12.35	31.09%	2.60%	0.84%	26.17%
LEA	75 Outperform	$6.04B	14.27	8.96%	2.63%	-1.90%	-13.86%
VC	73 Outperform	$2.73B	8.98	23.16%	0.55%	-4.03%	-39.51%
ALSN	71 Outperform	$8.18B	12.04	40.38%	1.10%	-4.21%	-0.45%
BWA	65 Neutral	$9.55B	71.56	2.24%	1.25%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	58 Neutral	$2.67B	51.65	-4.82%	1.75%	-18.23%	―

Allison Transmission Holdings Corporate Events

Allison Transmission Issues $500M Senior Notes for Acquisition

On November 21, 2025, Allison Transmission Holdings issued $500 million in 5.875% Senior Notes due 2033 in a private placement. The proceeds from this issuance, along with other financial resources, are intended to finance the acquisition of Dana Incorporated’s off-highway business. The Notes include various redemption provisions and are senior unsecured obligations, ranking equally with other senior debt but subordinated to secured indebtedness. The acquisition’s completion and financing are subject to risks, and if the acquisition does not close, the Notes will be subject to a special mandatory redemption.

Allison Transmission Announces $500M Senior Notes Offering

On November 6, 2025, Allison Transmission Holdings announced that its subsidiary, Allison Transmission, Inc., priced a $500 million offering of 5.875% Senior Notes due 2033 and a $1,200 million senior secured incremental term loan facility. These financial moves aim to fund the acquisition of the off-highway business of Dana Incorporated, with the transactions expected to close around November 21, 2025. This strategic acquisition is intended to enhance Allison’s market positioning in the off-highway vehicle sector.

Allison Transmission Initiates $500M Senior Notes Offering

On November 4, 2025, Allison Transmission Holdings announced that its subsidiary, Allison Transmission, Inc., initiated a private placement offering of $500 million in senior notes. This move is part of a strategic effort to finance the acquisition of Dana Incorporated’s off-highway business, which was previously announced. The company plans to use the proceeds from this offering, along with funds from a $1.2 billion incremental term loan facility and existing cash reserves, to complete the acquisition. However, the completion of the offering and the acquisition is subject to market conditions and other factors, with no assurance of favorable terms.

Allison Transmission Seeks $1.2B Loan for Acquisition

On October 30, 2025, Allison Transmission Holdings announced that its subsidiary, Allison Transmission, Inc., is seeking to amend its existing credit agreement to secure a $1.2 billion incremental term loan facility. The funds are intended to finance the acquisition of Dana Incorporated’s off-highway business. However, there is no assurance that the amendment will be finalized on favorable terms, which could impact the acquisition and related financial strategies.