TransDigm Group Inc (TDG) Stock Analysis
Verdict: WATCH (do not buy)
Surpassing 46% operating margins, TDG's debt-fueled growth faces resistance as cyclical aerospace aftermarket tailwinds fade near 52W lows.
Investment score: 42/100
Analysis as of
Is TransDigm Group Inc stock worth reviewing? The TradeMates thesis
The TradeMates model evaluates TransDigm Group as a HOLD due to deteriorating technical momentum and industry-wide warnings of slowing aerospace aftermarket growth. While proprietary products maintain a 59.81% gross margin, a 6.15x Net Debt/EBITDA ratio limits safety margins.
7-factor investment score
- Valuation: 40/100 (weight 20%)
- Financial Health: 50/100 (weight 15%)
- Technical Momentum: 20/100 (weight 15%)
- Earnings Quality: 80/100 (weight 15%)
- Insider Sentiment: 15/100 (weight 10%)
- Analyst Consensus: 50/100 (weight 10%)
- Risk-Adjusted Return: 35/100 (weight 15%)
TransDigm Group Inc opportunities and risks
What speaks for TDG
- Proprietary aftermarket pricing power yields unmatched profitability
What speaks against TDG
- Deceleration in commercial aerospace aftermarket growth
Peers and competitors
| Ticker | P/E | P/S | EV/EBITDA | Gross margin | Net margin | FCF yield |
|---|---|---|---|---|---|---|
| TDG | 32.6x | 6.0x | 18.3x | 59.6% | 21.3% | 3.2% |
| BA | 73.8x | 1.7x | 28.0x | 4.7% | 2.6% | -0.1% |
| LMT | 19.7x | 1.6x | 14.3x | 11.8% | 8.2% | 7.0% |
| GD | 21.4x | 1.8x | 15.7x | 15.4% | 8.2% | 6.7% |
| HWM | 48.3x | 9.9x | 34.2x | 34.4% | 20.5% | 1.7% |
| NOC | 16.6x | 1.7x | 11.9x | 20.1% | 10.5% | 4.9% |
| Peer median | 21.4x | 1.7x | 15.7x | 15.4% | 8.2% | 4.9% |
Frequently asked questions about TransDigm Group Inc (TDG)
Is TDG stock a good investment?
The TradeMates model rates TransDigm Group Inc as WATCH (do not buy) with an investment score of 42/100. The TradeMates model evaluates TransDigm Group as a HOLD due to deteriorating technical momentum and industry-wide warnings of slowing aerospace aftermarket growth. While proprietary products maintain a 59.81% gross margin, a 6.15x Net Debt/EBITDA ratio limits safety margins. This is algorithmic model output, not personal investment advice.
Is TDG stock a buy?
The TradeMates model verdict for TDG is WATCH (do not buy) with an investment score of 42/100. Treat this as a model signal to review, not a personal buy recommendation.