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Allison Transmission Holdings Inc ALSN

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Stock XNYS Rating as of
$87.76 +3.35 (3.97%)
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As of Delayed Price Closed
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Company Report

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Allison Transmission Earnings: Company's Dominance in North America On-Highway Continues

David Whiston

Allison Transmission’s second quarter saw strong contributions from the firm’s key market of North American on-highway trucks. We raise our fair value estimate to $87 per share from $85 on the time value of money and a lower tax rate (19% instead of 21%) for 2024 and 2025 based on how 2024 is tracking. Diluted earnings per share rose 11% year over year to $2.13 and management cited unprecedented demand for Class 8 vocational vehicles. This strength and pricing increases, likely to continue, led to increased 2024 guidance for revenue, adjusted EBITDA, net income, and adjusted free cash flow. The midpoint for revenue is now $3.13 billion, up from $3.1 billion, and adjusted EBITDA’s midpoint is now $1.115 billion, up from $1.1 billion.

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Price vs Fair Value

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ALSN is trading at a 384% premium.
Price
$87.76
Fair Value
$84.00
Uncertainty
Medium
1-Star Price
$975.75
5-Star Price
$63.20
Economic Moat
Qhdvmg
Capital Allocation
Mnryqsg

Bulls Say, Bears Say

Bulls

Allison leverages its strong brand to penetrate emerging markets with its fully automatic transmissions, substantially boosting sales.

Bears

Local competitors may prove to be stronger than expected, leaving Allison with limited market share opportunities abroad.

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Trading Information

Previous Close Price
$84.41
Day Range
$84.54–88.63
52-Week Range
$50.14–88.63
Bid/Ask
$87.24 / $88.27
Market Cap
$7.68 Bil
Volume/Avg
1.5 Mil / 624,798

Key Statistics

Price/Earnings (Normalized)
10.96
Price/Sales
2.51
Dividend Yield (Trailing)
1.09%
Dividend Yield (Forward)
1.14%
Total Yield
3.82%

Company Profile

Allison Transmission is the largest manufacturer of fully automatic transmissions for commercial vehicles. The company’s automatic transmissions allow customers to achieve better fuel and operator efficiency than less expensive manual and automated manual transmissions. Allison serves several end markets, including on- and off-highway equipment and military vehicles. Its on-highway business has about 60% global market share. The company’s transmissions can be found in Class 4-8 trucks, buses, and a limited number of large passenger vehicles (heavy-duty pickup trucks and motor homes). Allison also produces electric hybrid propulsion systems and is developing e-powertrains.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Small Core
Total Number of Employees
3,700
Website
https://www.allisontransmission.com

Competitors

Valuation

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Metric
ALSN
PCAR
CMI
Price/Earnings (Normalized)
 10.9610.2915.17
Price/Book Value
 5.162.944.38
Price/Sales
 2.511.481.22
Price/Cash Flow
 9.049.4327.52
Price/Earnings
ALSN
PCAR
CMI

Financial Strength

Metric
ALSN
PCAR
CMI
Quick Ratio
 2.022.440.73
Current Ratio
 2.782.731.34
Interest Coverage
 9.54—7.93
Quick Ratio
ALSN
PCAR
CMI

Profitability

Metric
ALSN
PCAR
CMI
Return on Assets (Normalized)
 14.26%13.26%3.38%
Return on Equity (Normalized)
 56.82%32.56%11.08%
Return on Invested Capital (Normalized)
 21.35%17.41%6.47%
Return on Assets
ALSN
PCAR
CMI
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