Transdigm Group Incorporated
Exchange: NYSESector: IndustrialsIndustry: Aerospace & Defense
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, engineered audio, radio and antenna systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems, specialized flight, wind tunnel and jet engine testing services and equipment, electronic components used in the generation, amplification, transmission and reception of microwave signals, and complex testing and instrumentation solutions.
Did you know?
Profit margin of 22.2% — that's well above average.
Current Price
$1158.36
+0.89%GoodMoat Value
$795.57
31.3% overvaluedProfile
Valuation (TTM)
Market Cap$65.24B
P/E36.08
EV$92.45B
P/B—
Shares Out56.32M
P/Sales7.16
Revenue$9.11B
EV/EBITDA20.04
Transdigm Group Incorporated (TDG) Stock Analysis
GoodMoat Analysis
Transdigm is a high-margin aerospace components manufacturer with a potentially durable moat built on switching costs and niche dominance, but it appears significantly overvalued relative to its estimated intrinsic value. The stock's current price is 45% above the GoodMoat target, presenting a substantial valuation hurdle.
Read full analysis
Transdigm Group is a specialized aerospace and defense manufacturer focused on proprietary, highly engineered components that are often mission-critical for aircraft. According to the GoodMoat framework, its primary competitive advantages likely stem from high switching costs (criterion #2) and niche dominance (#10). Its products are essential, difficult to substitute, and embedded in complex aircraft systems, creating a durable moat that supports its exceptionally high operating margin of 47.2%. This business strength suggests a Moat Score that could meet the framework's 5+ threshold for further analysis. However, the valuation assessment is a major concern. The stock trades at a P/E of 36x and a price of $1,156.49, which is 45% above the GoodMoat target fair value estimate of $795.57. This indicates a negative margin of safety, placing it in the framework's 'Unfavourable' valuation band (<10% MoS). While the company demonstrates strong profitability with a 22.2% net margin and solid 13.9% revenue growth, the extreme premium to estimated value and the low free cash flow yield of 2.8% create a significant barrier. For a value investor, Transdigm represents a classic case of a high-quality business at an unattractive price. It is worth investigating further only to understand the sources of its economic moat, but any potential investment would require a much more favourable entry point to provide the necessary margin of safety. Analysis based on data as of 2024-05-15.
Market Cap$65.24B
Current Price$1158.36
P/E Ratio36.08
Forward P/E—
PEG Ratio-2.75
EPS$32.08
Book Value$-171.99
P/B Ratio—
TDG Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 12.1% FCF growth (CAGR)
Cash vs Debt
Net Debt: 27.2B
Revenue
5.2B
FY19
5.1B
FY20
4.8B
FY21
5.4B
FY22
6.6B
FY23
7.9B
FY24
8.8B
FY25
Net Income
890M
FY19
699M
FY20
680M
FY21
866M
FY22
1.3B
FY23
1.7B
FY24
2.1B
FY25
TDG 52-Week Range
$1132.88
$1516.25
50-Day MA: $1235.29200-Day MA: $1314.99
Did you know?
Trading 31% above its estimated fair value of $795.57.
Transdigm Group Incorporated (TDG) Financial Summary
Transdigm Group Incorporated (TDG) is a Industrials company in the Aerospace & Defense industry, listed on NYSE. The stock currently trades at $1158.36 with a market capitalization of $65.24B.
Key valuation metrics include a P/E ratio of 36.08, and EPS of $32.08. The company reports a profit margin of 22.2%.
TDG Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $65.24B |
| P/E Ratio | 36.08 |
| EPS | $32.08 |
| P/S Ratio | 7.16 |
| EV/EBITDA | 20.04 |
| Dividend Yield | 14.76% |
| Profit Margin | 22.2% |
TDG Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $5.22B | $890.00M |
| FY20 | $5.10B | $699.00M |
| FY21 | $4.80B | $680.00M |
| FY22 | $5.43B | $866.00M |
| FY23 | $6.58B | $1.30B |
| FY24 | $7.94B | $1.71B |
| FY25 | $8.83B | $2.07B |
Transdigm Group Incorporated (TDG) Valuation
Based on GoodMoat's DCF model, Transdigm Group Incorporated has a fair value estimate of $795.57. At the current price of $1158.36, the stock appears 45.6% overvalued relative to our intrinsic value estimate.
TDG Quality Indicators
Transdigm Group Incorporated maintains a profit margin of 22.2% and an operating margin of 47.2%. The current ratio is 3.21.
About Transdigm Group Incorporated
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, engineered audio, radio and antenna systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems, specialized flight, wind tunnel and jet engine testing services and equipment, electronic components used in the generation, amplification, transmission and reception of microwave signals, and complex testing and instrumentation solutions.
TDG Free Cash Flow
Transdigm Group Incorporated generated $1.82B in trailing twelve-month free cash flow, representing an FCF yield of 2.78%. This moderate FCF yield indicates reasonable cash generation.
TDG Shares Outstanding
Transdigm Group Incorporated has 0.06 billion shares outstanding at a share price of $1158.36, giving it a market capitalization of $65.24B.
TDG Recent Insider Trades
Recent insider transactions at Transdigm Group Incorporated include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Howley W Nicholas (Director) | SELL | 60 | $75620.31 |
| Reiss Joel (Co-Chief Operating Officer) | SELL | 233 | $296975.60 |
| Howley W Nicholas (Director) | SELL | 202 | $243493.85 |