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Transdigm Group
(NYSE:TDG)
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Rating:70Neutral
Price Target:
$1,460.00
▲(15.33% Upside)
Action:Reiterated
Date:06/22/26
The score is driven by outstanding profitability and solid cash generation, reinforced by a guidance raise and strong booking/backlog commentary. Offsetting this are a highly leveraged, negative-equity balance sheet and a rich P/E valuation, while technicals remain supportive but somewhat stretched.
Positive Factors
Margin sustainability
TransDigm’s exceptionally high operating and EBITDA margins reflect durable pricing power from proprietary, highly engineered components and aftermarket pricing. These structurally wide margins support strong cash generation, buffer cyclical OEM swings, and underpin long-term profitability even as the business grows.
Negative Factors
High leverage and negative equity
A very high debt load and negative equity materially increase financial vulnerability. Elevated leverage limits flexibility to withstand revenue shocks, raises refinancing and covenant risk, and makes earnings more sensitive to interest costs and cyclical downturns over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin sustainability
TransDigm’s exceptionally high operating and EBITDA margins reflect durable pricing power from proprietary, highly engineered components and aftermarket pricing. These structurally wide margins support strong cash generation, buffer cyclical OEM swings, and underpin long-term profitability even as the business grows.
Read all positive factors
Transdigm Group Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales figures for each business segment, indicating which parts of the company are driving growth and which may need strategic adjustments.
Breaks down sales figures for each business segment, indicating which parts of the company are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The FlyTransdigm Group (TDG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.08B
Dividend YieldN/A
Average Volume (3M)373.69K
Price to Earnings (P/E)37.9
Beta (1Y)0.86
Revenue Growth13.26%
EPS Growth8.24%
CountryUS
Employees16,500
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)32.04
Shares Outstanding55,933,582
10 Day Avg. Volume309,269
30 Day Avg. Volume373,694
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 Cap1.47
Enterprise Value/Revenue10.71
Enterprise Value/Gross Profit18.14
Enterprise Value/Ebitda21.27
Forecast
1Y Price Target
$1,506.70Price Target Upside19.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)40.03
Revenue Forecast (FY)$10.38B
Transdigm Group Business Overview & Revenue Model
Company Description
TransDigm Group Incorporated is a global aerospace enterprise specializing in the development, manufacturing, and distribution of a wide array of aircraft components. Operating across the United States and internationally, its business is structur...
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:May 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial performance with raised full-year guidance, double-digit organic growth across major market channels, robust bookings and backlog, solid margin performance, and continued M&A momentum and shareholder returns. The primary negatives are geopolitical uncertainty (Middle East), near-term margin dilution from acquisitions, elevated leverage, and quarter-to-quarter free cash flow variability. Overall, the positive execution and guidance increases materially outweigh the near-term risks highlighted by management.Positive Updates
Raised Full-Year Revenue Guidance
Midpoint fiscal 2026 revenue guidance increased to $10.36 billion, approximately +17% year-over-year; midpoint EBITDA as defined guidance raised to $5.42 billion (+~14% YoY) and midpoint adjusted EPS now expected at $39.52.
Negative Updates
Geopolitical Uncertainty - Middle East Impact
Conflict in the Middle East slowed global RPM growth to 2.1% in March and caused takeoffs/landings to dip slightly negative; excluding the Middle East, March RPM growth was 8%. Management is cautious about duration-dependent downstream effects on demand.
Read all updates
Q2-2026 Updates
Positive
Negative
Raised Full-Year Revenue Guidance
Midpoint fiscal 2026 revenue guidance increased to $10.36 billion, approximately +17% year-over-year; midpoint EBITDA as defined guidance raised to $5.42 billion (+~14% YoY) and midpoint adjusted EPS now expected at $39.52.
Read all positive updates
Company Guidance
The company raised fiscal 2026 guidance at the midpoint to $10.36 billion of revenue (≈+17% year‑over‑year) and $5.42 billion of EBITDA as defined (≈+14% y/y) implying an EBITDA margin around 52.3% (Q2 margin was 52.6%, including slightly less than 2 full percentage points of dilution from recent acquisitions); adjusted EPS midpoint is $39.52; the update increases sales guidance by ~$420 million and EBITDA guidance by ~$210 million and assumes no additional acquisitions or divestitures (Stellant excluded until close). Guidance is built on market channel assumptions of commercial OEM growth in the low double‑digit to mid‑teens range, commercial aftermarket growth in the high single‑digit to low double‑digit range, and defense growth in the high single‑digit range, and reflects strong H1 performance (organic growth ~11% in Q2, bookings outpaced shipments, book‑to‑bill supportive). Financial assumptions include FY free cash flow nearer $2.5 billion (Q2 FCF ≈$350 million, Q1 just under $900 million), quarter‑end cash of $3.9 billion (incl. $2.0 billion new debt), net debt/EBITDA ~5.6x (pro forma 5.9x), >$10 billion of remaining M&A firepower, gross debt of $33.7 billion with ~75% fixed through FY2029, EBITDA/interest ≈3x, and continued capacity for ~$950 million of YTD share repurchases (≈670k shares at avg <$1,200).Transdigm Group Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
22
Negative
Cash Flow
76
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.50B | 8.83B | 7.94B | 6.58B | 5.43B | 4.80B |
| Gross Profit | 5.61B | 5.31B | 4.67B | 3.84B | 3.10B | 2.51B |
| EBITDA | 4.78B | 4.57B | 3.81B | 3.15B | 2.46B | 2.03B |
| Net Income | 2.02B | 2.07B | 1.71B | 1.30B | 866.00M | 680.00M |
Balance Sheet | ||||||
| Total Assets | 25.44B | 22.91B | 25.59B | 19.97B | 18.11B | 19.32B |
| Cash, Cash Equivalents and Short-Term Investments | 3.88B | 2.81B | 6.26B | 3.47B | 3.00B | 4.79B |
| Total Debt | 32.00B | 30.03B | 24.90B | 19.77B | 19.81B | 20.02B |
| Total Liabilities | 34.84B | 32.59B | 31.87B | 21.95B | 21.87B | 22.23B |
| Stockholders Equity | -9.40B | -9.69B | -6.29B | -1.98B | -3.77B | -2.92B |
Cash Flow | ||||||
| Free Cash Flow | 1.85B | 1.82B | 1.88B | 1.24B | 829.00M | 808.00M |
| Operating Cash Flow | 2.10B | 2.04B | 2.04B | 1.38B | 948.00M | 913.00M |
| Investing Cash Flow | -1.54B | -595.00M | -2.44B | -900.00M | -553.00M | -785.00M |
| Financing Cash Flow | 889.00M | -4.90B | 3.17B | -16.00M | -2.15B | -70.00M |
Transdigm Group Technical Analysis
Negative
1265.88
Price Trends
1251.01
Negative
1238.68
Negative
1284.21
Negative
Market Momentum
2.67
Positive
36.92
Neutral
10.20
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 1265.88 is below the 20-day moving average (MA) of 1305.99, above the 50-day MA of 1251.01, and below the 200-day MA of 1284.21, indicating a bearish trend. The MACD of 2.67 indicates Positive momentum. The RSI at 36.92 is Neutral, neither overbought nor oversold. The STOCH value of 10.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $100.81B | 22.94 | 17.41% | 1.73% | 9.35% | 10.49% | |
76 Outperform | $40.05B | 61.06 | 17.82% | 0.07% | 18.80% | 30.84% | |
70 Neutral | $69.08B | 37.93 | -24.26% | ― | 13.26% | 8.24% | |
69 Neutral | $53.78B | 31.32 | 8.87% | 1.61% | 5.79% | 9.31% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $76.96B | 16.52 | 28.05% | 1.55% | 4.95% | 26.05% | |
59 Neutral | $120.05B | 24.84 | 74.53% | 2.77% | 4.59% | -10.76% |
* Industrials Sector Average
TDG
Transdigm Group
1,215.34
-257.95
-17.51%
GD
General Dynamics
369.50
74.70
25.34%
LHX
L3Harris Technologies
290.01
30.56
11.78%
HEI
HEICO
345.61
26.14
8.18%
LMT
Lockheed Martin
514.99
55.90
12.18%
NOC
Northrop Grumman
528.67
16.99
3.32%
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.