TransDigm Group Inc TDG

Morningstar Rating
$1,097.24 +14.64 (1.35%)
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Company Report

TransDigm Continues Its Roll-Up of Franchises in Proprietary Aerospace and Aftermarket Parts

TransDigm is a holding company with a clear, consistent strategy: Acquire and operate businesses that supply proprietary and highly engineered aerospace components with high aftermarket demand. Its businesses manufacture and sell parts for aircraft, like ignition systems, pumps, actuators, flight controls, and cabin equipment, among other things. Since TransDigm is the only provider of many such products, it has significant pricing power. The firm also operates with a high degree of financial leverage to amplify operating results.

Price vs Fair Value

TDG is trading at a LOCK|kB?^dv premium.
Price
$1,082.60
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Roughly three-fourths of TransDigm’s sales are sole-source, which gives it immense pricing power.

Bears

TransDigm may not be able to find appropriate acquisition targets at reasonable prices, which would limit its addressable market or make it pay higher multiples.

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Trading Information

Previous Close Price
$1,082.60
Day Range
$1,080.09–1,102.20
52-Week Range
$1,071.25–1,463.03
Bid/Ask
$1,096.25 / $1,098.34
Shares Outstanding
55.28M
Market Cap
$60.65B
Volume/Avg
402,117 / 392,631

Key Statistics

Price/Earnings (Normalized)
27.59
Price/Sales
6.36
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Dividend Payment Schedule
—
Total Yield
2.98%

Company Profile

TransDigm manufactures and services a broad set of specialized parts for commercial and military aircraft. The firm has three segments: power and control, airframes, and a small nonaviation segment, which serves mostly off-road vehicles and mining equipment. It is an acquisitive holding company focused on buying up smaller firms that make proprietary aerospace products with substantial aftermarket revenue. TransDigm regularly employs financial leverage to amplify its operating results.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Mid Growth
Total Number of Employees
16,500

Competitors

Valuation

Metric
TDG
RTX
PH
Price/Earnings (Normalized)
27.5926.7329.94
Price/Book Value
—3.767.91
Price/Sales
6.362.705.76
Price/Cash Flow
23.2619.0526.55
Price/Earnings
TDG
RTX
PH

Financial Strength

Metric
TDG
RTX
PH
Quick Ratio
1.780.650.65
Current Ratio
3.021.011.26
Interest Coverage
2.456.8812.34
Quick Ratio
TDG
RTX
PH

Profitability

Metric
TDG
RTX
PH
Return on Assets (Normalized)
9.48%5.54%13.59%
Return on Equity (Normalized)
—14.51%28.83%
Return on Invested Capital (Normalized)
17.57%10.02%18.63%
Return on Assets
TDG
RTX
PH

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