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Transdigm Group
(NYSE:TDG)
Select Model
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Rating:66Neutral
Price Target:
$1,323.00
▲(6.98% Upside)
Action:Reiterated
Date:08/08/26
The score is driven primarily by strong underlying profitability and cash flow, reinforced by a guidance raise and positive earnings-call momentum. Offsetting these strengths are meaningful balance-sheet risk from heavy leverage/negative equity, a weak technical trend (trading below major moving averages), and a relatively high P/E without dividend support.
Positive Factors
Exceptional Profitability
TransDigm's outsized gross and EBITDA margins reflect durable pricing power from engineered, proprietary parts and efficient scale. High operating profitability supports reinvestment, M&A funding and resilience through aerospace cycles, underpinning long‑term cash generation and return potential.
Negative Factors
Heavy Leverage and Negative Equity
Very high gross debt and a deeply negative equity base constrain financial flexibility, amplify refinancing and interest‑rate risk, and limit ability to absorb shocks. Elevated leverage increases sensitivity to cyclical downturns and can force prioritization between deleveraging and strategic investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Exceptional Profitability
TransDigm's outsized gross and EBITDA margins reflect durable pricing power from engineered, proprietary parts and efficient scale. High operating profitability supports reinvestment, M&A funding and resilience through aerospace cycles, underpinning long‑term cash generation and return potential.
Read all positive factors
Transdigm Group Key Performance Indicators (KPIs)
Any
EBITDA by Segment
Shows earnings before interest, taxes, depreciation, and amortization for each business segment, highlighting which areas are most profitable and where there might be opportunities or challenges in cost management.
Shows earnings before interest, taxes, depreciation, and amortization for each business segment, highlighting which areas are most profitable and where there might be opportunities or challenges in cost management.
Data provided by:
The Fly
The FlyTransdigm Group (TDG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$68.89B
Dividend YieldN/A
Average Volume (3M)370.45K
Price to Earnings (P/E)38.1
Beta (1Y)0.86
Revenue Growth16.64%
EPS Growth9.48%
CountryUS
Employees16,500
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)32.96
Shares Outstanding55,276,524
10 Day Avg. Volume353,212
30 Day Avg. Volume370,453
Financial Highlights & Ratios
PEG Ratio1.63
Price to Book (P/B)-7.92
Price to Sales (P/S)8.69
P/FCF Ratio42.24
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$1,487.60Price Target Upside20.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)40.95
Revenue Forecast (FY)$10.49B
Transdigm Group Business Overview & Revenue Model
Company Description
TransDigm Group Incorporated (TDG) is a U.S.-based aerospace components manufacturer and designer focused on engineered, highly specialized parts used primarily on commercial and military aircraft. Through a portfolio of operating subsidiaries, it...
How the Company Makes Money
TransDigm makes money by selling aerospace components and related spares across both original equipment manufacturing (OEM) and aftermarket channels, with the aftermarket typically benefiting from recurring demand tied to the installed base of air...
Transdigm Group Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Positive
The call emphasized strong, broad-based revenue growth across commercial OEM, commercial aftermarket, and defense, accompanied by robust cash flow, raised full-year guidance, active accretive M&A, and significant share repurchases. Headwinds were largely transaction-related (Stellant withdrawal) and short-term margin dilution from recent acquisitions, along with elevated leverage and working capital consumption. Management framed regulatory and geopolitical exposures as monitored risks but not currently material. Overall, positive operational and financial momentum outweighs the manageable near-term challenges.Positive Updates
Raised Full-Year Guidance
Raised fiscal 2026 guidance: revenue midpoint to $10.51B (≈ +19% YoY), EBITDA As Defined midpoint to $5.52B (≈ +16% YoY) and adjusted EPS midpoint to $41.04; sales guidance increased ~$150M and EBITDA guidance increased ~$100M at the midpoint.
Negative Updates
Acquisition Withdrawal – Stellant
Withdrew from the Stellant acquisition after DOJ indicated intent to challenge the transaction; management called this outcome disappointing and noted it required reallocating M&A focus and resources.
Read all updates
Q3-2026 Updates
Positive
Negative
Raised Full-Year Guidance
Raised fiscal 2026 guidance: revenue midpoint to $10.51B (≈ +19% YoY), EBITDA As Defined midpoint to $5.52B (≈ +16% YoY) and adjusted EPS midpoint to $41.04; sales guidance increased ~$150M and EBITDA guidance increased ~$100M at the midpoint.
Read all positive updates
Company Guidance
TransDigm raised its fiscal 2026 outlook: the midpoint of revenue guidance is now $10.51 billion (about +19% year‑over‑year; midpoint up $150 million), EBITDA As Defined midpoint is $5.52 billion (about +16% YoY; midpoint up $100 million) implying an EBITDA margin around 52.5% (Q3 margin was 52.8% and included >2 full percentage points of acquisition dilution and ~0.5 ppt headwind from Jet Parts/Victor Sierra), and adjusted EPS midpoint is $41.04. The updated guidance assumes market‑channel growth of mid‑teens for commercial OEM, low‑double‑digit growth for commercial aftermarket (raised from high‑single digits), and high‑single to low‑double digits for defense. Management cited strong cash metrics supporting the plan — Q3 operating cash flow >$700 million, Q3 free cash flow ≈ $870 million (YTD FCF $2.1 billion) and full‑year FCF guidance raised to ≈ $2.6 billion (from $2.5 billion) — while ending the quarter with ~$2.8 billion cash, net debt/EBITDA ~5.8x (target 5–7x), EBITDA/interest coverage ~3x, and M&A firepower in excess of $10 billion.Transdigm Group Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
38
Negative
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.01B | 8.83B | 7.94B | 6.58B | 5.43B | 4.80B |
| Gross Profit | 5.96B | 5.31B | 4.67B | 3.84B | 3.10B | 2.51B |
| EBITDA | 4.97B | 4.57B | 3.81B | 3.15B | 2.46B | 2.03B |
| Net Income | 2.13B | 2.07B | 1.71B | 1.30B | 866.00M | 680.00M |
Balance Sheet | ||||||
| Total Assets | 24.04B | 22.91B | 25.59B | 19.97B | 18.11B | 19.32B |
| Cash, Cash Equivalents and Short-Term Investments | 2.77B | 2.81B | 6.26B | 3.47B | 3.00B | 4.79B |
| Total Debt | 33.35B | 30.03B | 24.90B | 19.77B | 19.81B | 20.02B |
| Total Liabilities | 36.19B | 32.59B | 31.87B | 21.95B | 21.87B | 22.23B |
| Stockholders Equity | -12.16B | -9.69B | -6.29B | -1.98B | -3.77B | -2.92B |
Cash Flow | ||||||
| Free Cash Flow | 1.93B | 1.82B | 1.88B | 1.24B | 829.00M | 808.00M |
| Operating Cash Flow | 2.20B | 2.04B | 2.04B | 1.38B | 948.00M | 913.00M |
| Investing Cash Flow | -3.62B | -595.00M | -2.44B | -900.00M | -553.00M | -785.00M |
| Financing Cash Flow | 1.42B | -4.90B | 3.17B | -16.00M | -2.15B | -70.00M |
Transdigm Group Technical Analysis
Positive
1236.71
Price Trends
1267.58
Negative
1233.05
Positive
1277.98
Negative
Market Momentum
-4.69
Negative
50.83
Neutral
23.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDG, the sentiment is Positive. The current price of 1236.71 is below the 20-day moving average (MA) of 1246.27, below the 50-day MA of 1267.58, and below the 200-day MA of 1277.98, indicating a neutral trend. The MACD of -4.69 indicates Negative momentum. The RSI at 50.83 is Neutral, neither overbought nor oversold. The STOCH value of 23.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TDG.
Transdigm Group Risk Analysis
Transdigm Group disclosed 30 risk factors in its most recent earnings report. Transdigm Group 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
Transdigm Group Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $106.32B | 23.80 | 17.43% | 1.60% | 9.13% | 10.37% | |
76 Outperform | $43.55B | 66.20 | 17.82% | 0.04% | 18.80% | 30.84% | |
76 Outperform | $138.02B | 22.34 | 86.24% | 2.34% | 7.20% | 52.79% | |
70 Outperform | $81.65B | 18.58 | 26.58% | 1.73% | 5.90% | 16.00% | |
68 Neutral | $53.72B | 29.30 | 9.41% | 1.63% | 7.29% | 10.75% | |
66 Neutral | $68.89B | 38.13 | -21.02% | ― | 16.64% | 9.48% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
TDG
Transdigm Group
1,256.90
-41.69
-3.21%
GD
General Dynamics
395.78
87.53
28.40%
LHX
L3Harris Technologies
291.82
25.59
9.61%
HEI
HEICO
374.67
66.99
21.77%
LMT
Lockheed Martin
608.68
182.61
42.86%
NOC
Northrop Grumman
585.87
10.92
1.90%
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.