TransDigm Group Incorporated Fundamental Analysis
TransDigm Group Incorporated (TDG) shows weak financial fundamentals with a PE ratio of 34.88, profit margin of 21.29%, and ROE of -24.26%. The company generates $9.1B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 87.2/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TDG's fundamental strength across five key dimensions:
Efficiency Score
WeakTDG struggles to generate sufficient returns from assets.
Valuation Score
WeakTDG trades at a premium to fair value.
Growth Score
ModerateTDG shows steady but slowing expansion.
Financial Health Score
ExcellentTDG maintains a strong and stable balance sheet.
Profitability Score
ModerateTDG maintains healthy but balanced margins.
Key Financial Metrics
Is TDG Expensive or Cheap?
P/E Ratio
TDG trades at 34.88 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TDG's PEG of 4.27 indicates potential overvaluation.
Price to Book
The market values TransDigm Group Incorporated at -7.50 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 8.31 times EBITDA. This is generally considered low.
How Well Does TDG Make Money?
Net Profit Margin
For every $100 in sales, TransDigm Group Incorporated keeps $21.29 as profit after all expenses.
Operating Margin
Core operations generate 46.51 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-24.26 in profit for every $100 of shareholder equity.
ROA
TransDigm Group Incorporated generates $7.95 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
TransDigm Group Incorporated produces operating cash flow of $2.02B, showing steady but balanced cash generation.
Free Cash Flow
TransDigm Group Incorporated generates strong free cash flow of $1.78B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $31.79 in free cash annually.
FCF Yield
TDG converts 2.73% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.88
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.27
vs 25 benchmark
P/B Ratio
Price to book value ratio
-7.50
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.14
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-3.40
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.52
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.24
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.19
vs 25 benchmark
How TDG Stacks Against Its Sector Peers
| Metric | TDG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.88 | 33.17 | Neutral |
| ROE | -24.26% | 1178.00% | Weak |
| Net Margin | 21.29% | -29242.00% (disorted) | Strong |
| Debt/Equity | -3.40 | 0.74 | Strong (Low Leverage) |
| Current Ratio | 3.52 | 25.78 | Strong Liquidity |
| ROA | 7.95% | -1368598.00% (disorted) | Weak |
TDG outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews TransDigm Group Incorporated's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure
EPS CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure
FCF CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure