Transdigm Group (TDG) AI Stock Analysis

• Market Cap: $72.40B
• Dividend Yield: N/A
• Average Volume (3M): 276.94K
• Price to Earnings (P/E): 42.7
• Beta (1Y): 0.86
• Revenue Growth: 12.86%
• EPS Growth: 11.44%
• Country: US
• Employees: 16,600
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 9.60
• Shares Outstanding: 56,350,285
• 10 Day Avg. Volume: 251,340
• 30 Day Avg. Volume: 276,935
• PEG Ratio: 3.42
• Price to Book (P/B): -13.11
• Price to Sales (P/S): 10.39
• P/FCF Ratio: 43.88
• Enterprise Value/Market Cap: 1.51
• Enterprise Value/Revenue: 12.75
• Enterprise Value/Gross Profit: 22.08
• Enterprise Value/Ebitda: 25.18
• 1Y Price Target: $1,498.20
• Price Target Upside: 16.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $1,437.00 ▲(11.49% Upside)

Transdigm Group's strong financial performance and strategic growth initiatives are key strengths, supported by robust EBITDA margins and cash flow. However, high leverage and valuation concerns, along with challenges in the commercial OEM sector, pose risks that temper the overall score.

Positive Factors

Cash Flow Generation

Strong cash flow generation supports operational flexibility and strategic investments, ensuring long-term sustainability and growth potential.

EBITDA Margin

High EBITDA margins reflect efficient operations and strong pricing power, enhancing profitability and competitive positioning in the aerospace sector.

Defense Revenue Growth

Growth in defense revenue indicates robust demand and strategic positioning in a stable market, contributing to diversified revenue streams.

Negative Factors

High Leverage

High leverage poses financial risks, potentially limiting financial flexibility and increasing vulnerability to economic downturns.

Commercial OEM Revenue Decline

Declining OEM revenue highlights challenges in production rates, impacting growth prospects and signaling potential market headwinds.

Lowered Sales Guidance

Reduced sales guidance reflects market challenges and uncertainties, potentially affecting revenue growth and investor confidence.

Transdigm Group Business Overview & Revenue Model

Company Description

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. Its Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The company's Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. Its Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.

How the Company Makes Money

Transdigm Group generates revenue primarily through the sale of its proprietary aerospace components to original equipment manufacturers (OEMs) and aftermarket services. The company's revenue model is structured around both new part sales and aftermarket support, with a significant portion of earnings derived from long-term contracts and maintenance, repair, and overhaul (MRO) services. Key revenue streams include the sale of components used in aircraft production and the ongoing maintenance of existing aircraft fleets. Additionally, Transdigm benefits from strong relationships with major aerospace manufacturers and defense contractors, which provide a stable customer base and contribute to recurring revenue through aftermarket services. The company's focus on high-margin products and strategic acquisitions further enhances its profitability and market position.

Transdigm Group Financial Statement Overview

Summary

Transdigm Group demonstrates strong profitability and cash flow generation, crucial for sustaining operations and growth. However, high leverage and negative equity pose financial risks, impacting the overall financial performance score.

Income Statement

Transdigm Group shows strong profitability with a consistent increase in revenue and margins over the years. The TTM data reveals a gross profit margin of 57.7% and a net profit margin of 20.4%, indicating efficient cost management and strong bottom-line performance. Revenue growth is steady at 2.3% TTM, reflecting resilience in the aerospace and defense sector.

Balance Sheet

The balance sheet highlights significant leverage with a negative stockholders' equity, resulting in a high debt-to-equity ratio of -5.0 TTM. This indicates potential financial risk, although the company has managed to maintain operations effectively. Return on equity is negative, reflecting the impact of high debt levels on shareholder returns.

Cash Flow

Cash flow analysis shows robust free cash flow growth of 26.3% TTM, supporting operational flexibility. The operating cash flow to net income ratio is strong at 0.95, suggesting efficient cash generation relative to earnings. The free cash flow to net income ratio of 0.91 further underscores the company's ability to convert profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.58B	7.94B	6.58B	5.44B	4.80B	5.11B
Gross Profit	4.95B	4.56B	3.75B	2.94B	2.42B	2.55B
EBITDA	4.34B	3.87B	3.20B	2.46B	2.06B	2.08B
Net Income	1.75B	1.48B	1.26B	780.00M	607.00M	474.00M
Balance Sheet
Total Assets	22.70B	25.59B	19.97B	18.11B	19.32B	18.39B
Cash, Cash Equivalents and Short-Term Investments	2.79B	6.26B	3.47B	3.00B	4.79B	4.72B
Total Debt	25.01B	24.90B	19.77B	19.81B	20.02B	20.03B
Total Liabilities	27.70B	31.87B	21.95B	21.87B	22.23B	22.36B
Stockholders Equity	-5.00B	-6.29B	-1.98B	-3.77B	-2.92B	-3.97B
Cash Flow
Free Cash Flow	1.91B	1.88B	1.24B	829.00M	808.00M	1.11B
Operating Cash Flow	2.10B	2.04B	1.38B	948.00M	913.00M	1.21B
Investing Cash Flow	-1.05B	-2.44B	-900.00M	-553.00M	-785.00M	799.00M
Financing Cash Flow	-1.65B	3.17B	-16.00M	-2.15B	-70.00M	1.23B

Transdigm Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1288.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDG, the sentiment is Negative. The current price of 1288.91 is below the 20-day moving average (MA) of 1302.39, below the 50-day MA of 1294.82, and below the 200-day MA of 1315.04, indicating a bearish trend. The MACD of -3.60 indicates Positive momentum. The RSI at 46.00 is Neutral, neither overbought nor oversold. The STOCH value of 18.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TDG.

Transdigm Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	80 Outperform	$93.55B	22.45	17.78%	1.69%	11.86%	17.39%
NOC	75 Outperform	$81.15B	20.41	26.15%	1.54%	-0.14%	72.35%
HEI	74 Outperform	$38.95B	70.79	16.71%	0.07%	13.46%	33.75%
TDG	70 Outperform	$72.40B	42.65	―	―	12.86%	11.44%
LMT	70 Outperform	$106.06B	25.59	62.78%	2.92%	2.88%	-35.15%
LHX	70 Neutral	$54.37B	31.21	9.13%	1.64%	2.83%	47.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Transdigm Group Corporate Events

TransDigm Group Reports Strong Q3 2025 Results

TransDigm Group Incorporated is a leading global designer, producer, and supplier of highly engineered aircraft components, serving both commercial and military aerospace sectors with a wide range of specialized products.

TransDigm’s Earnings Call: Optimism Amid Challenges

TransDigm’s recent earnings call paints a picture of optimism tempered by some challenges. The company showcased strong EBITDA margins and impressive operating cash flow, buoyed by growth in the defense market and a stable commercial aftermarket. However, the commercial OEM segment faced hurdles with revenue decline and reduced sales guidance. The company’s strategic acquisitions and mergers and acquisitions (M&A) activities indicate a focus on sustaining long-term growth.