Transdigm Group (TDG) AI Stock Analysis

• Market Cap: $76.60B
• Dividend Yield: N/A
• Average Volume (3M): 290.68K
• Price to Earnings (P/E): 42.4
• Beta (1Y): 0.83
• Revenue Growth: 11.33%
• EPS Growth: 25.37%
• Country: US
• Employees: 16,600
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 10.82
• Shares Outstanding: 56,318,584
• 10 Day Avg. Volume: 273,806
• 30 Day Avg. Volume: 290,675
• PEG Ratio: 0.95
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 8.69
• P/FCF Ratio: 42.24
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 12.11
• Enterprise Value/Gross Profit: 20.48
• Enterprise Value/Ebitda: 23.89
• 1Y Price Target: $1,564.58
• Price Target Upside: 15.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 39.08
• Revenue Forecast (FY): $9.91B

• Rating: 69 Neutral
• Price Target: $1,465.00 ▲(8.13% Upside)

Transdigm Group's strong financial performance and positive earnings call outlook are offset by high leverage and valuation concerns. The technical indicators suggest bullish momentum, but the high P/E ratio indicates potential overvaluation. The company's strategic focus on acquisitions and M&A supports long-term growth despite OEM challenges.

Positive Factors

Revenue Growth

Projected revenue growth of 12% for 2026 indicates strong market demand and effective business strategies, supporting long-term expansion.

Market Position

The focus on proprietary, mission-critical aerospace components secures a competitive edge and stable demand, reinforcing market leadership.

Cash Generation

Strong cash generation capabilities ensure financial flexibility, enabling strategic investments and shareholder returns over the long term.

Negative Factors

High Leverage

High leverage and negative equity pose risks to financial stability, potentially limiting growth and increasing vulnerability to market fluctuations.

OEM Production Challenges

Production challenges with OEM partners can disrupt supply chains and revenue streams, affecting long-term growth and operational efficiency.

Margin Dilution

Margin dilution from acquisitions can impact profitability, requiring strategic adjustments to maintain financial performance and shareholder value.

Transdigm Group Business Overview & Revenue Model

Company Description

Transdigm Group Incorporated (TDG) is a leading global designer, producer, and supplier of highly engineered aircraft components, primarily for commercial and military aerospace applications. The company operates through various sectors, including aerospace, defense, and government services, offering a wide range of products such as mechanical actuators, electrical power distribution, fuel systems, and other critical aerospace components. Transdigm focuses on proprietary, mission-critical products that enhance the safety and performance of aircraft.

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 shows strong profitability and operational efficiency with high margins and consistent revenue growth. However, the balance sheet's high leverage and negative equity pose significant risks. Cash flow generation is solid, but recent declines in free cash flow growth warrant attention.

Income Statement

Transdigm Group has demonstrated consistent revenue growth over the years, with a notable increase in gross profit margins, reaching 60.14% in 2025. The net profit margin has also improved to 23.49%, indicating strong profitability. EBIT and EBITDA margins are robust, reflecting efficient operations. However, the revenue growth rate has slowed down to 2.95% in 2025, suggesting a potential plateau in growth.

Balance Sheet

The balance sheet reveals a concerning negative stockholders' equity, leading to an undefined debt-to-equity ratio. This indicates high leverage and potential financial instability. The return on equity is also negative, reflecting challenges in generating returns for shareholders. Despite these issues, the company maintains a substantial asset base.

Cash Flow

Operating cash flow remains strong, but free cash flow has seen a slight decline in 2025. The free cash flow to net income ratio is healthy at 89.11%, indicating efficient cash generation relative to net income. However, the negative growth in free cash flow suggests potential challenges in sustaining cash flow levels.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.58B	8.83B	7.94B	6.58B	5.43B	4.80B
Gross Profit	5.07B	5.31B	4.67B	3.84B	3.10B	2.51B
EBITDA	4.35B	4.57B	3.81B	3.15B	2.46B	2.03B
Net Income	1.93B	2.07B	1.71B	1.30B	866.00M	680.00M
Balance Sheet
Total Assets	22.70B	22.91B	25.59B	19.97B	18.11B	19.32B
Cash, Cash Equivalents and Short-Term Investments	2.79B	2.81B	6.26B	3.47B	3.00B	4.79B
Total Debt	25.07B	30.03B	24.94B	19.77B	19.81B	20.02B
Total Liabilities	27.70B	32.59B	31.87B	21.95B	21.87B	22.23B
Stockholders Equity	-5.00B	-9.69B	-6.29B	-1.98B	-3.77B	-2.92B
Cash Flow
Free Cash Flow	1.91B	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	-1.05B	-595.00M	-2.44B	-900.00M	-553.00M	-785.00M
Financing Cash Flow	-1.65B	-4.90B	3.17B	-16.00M	-2.15B	-70.00M

Transdigm Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1354.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 1354.86 is above the 20-day moving average (MA) of 1321.63, above the 50-day MA of 1308.85, and above the 200-day MA of 1321.39, indicating a bullish trend. The MACD of 13.91 indicates Negative momentum. The RSI at 59.15 is Neutral, neither overbought nor oversold. The STOCH value of 81.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$89.78B	21.54	17.78%	1.78%	11.86%	17.39%
NOC	75 Outperform	$77.86B	19.58	26.15%	1.65%	-0.14%	72.35%
HEI	74 Outperform	$37.49B	67.88	16.71%	0.07%	13.46%	33.75%
LMT	70 Outperform	$105.95B	25.56	62.78%	3.04%	2.88%	-35.15%
LHX	70 Neutral	$50.94B	29.24	9.13%	1.76%	2.83%	47.00%
TDG	69 Neutral	$76.60B	42.39	―	―	11.33%	25.37%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Transdigm Group Corporate Events

TransDigm Group Reports Strong Fiscal 2025 Results

TransDigm Group, a prominent global designer and supplier of highly engineered aircraft components, operates within the aerospace industry, providing critical components for both commercial and military aircraft worldwide.

TransDigm’s Earnings Call Highlights Growth and Challenges

The recent earnings call for TransDigm highlighted a strong fiscal year end with a positive outlook for 2026. The company reported significant revenue and EBITDA growth, robust capital allocation, and successful mergers and acquisitions (M&A) activities. However, challenges remain in original equipment manufacturer (OEM) production performance and margin dilution from recent acquisitions, which were points of concern during the call.