Allison Transmission ALSN
United StatesConsumer Cyclical · Auto PartsUSD
140.73 USD (+27.1%)
11 analysts
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Allison Transmission is a US manufacturer of automatic transmissions for commercial vehicles, buses, and military applications, with a business model based on original equipment sales and a growing parts and services business.
Key points
from its scores- ✓Good share-price trend9.4
- ✕Little or no dividend4.5
- ✕Fragile balance sheet4.9
- !Average business quality5.8
AI analysis
bottom line, main risk, context and newsStrong revenue growth and solid profitability are offset by high leverage and declining earnings. Wait for the company to demonstrate it can convert growth into sustainable profits and reduce debt before increasing the position.
Allison Transmission shows exceptional revenue growth (92.4%) and solid ROE (28.4%), but its high leverage (Net Debt/EBITDA of 3.2x) and declining earnings (-6.1%) raise doubts about the sustainability of its current momentum. The valuation (forward P/E of 9.8) seems reasonable if the business stabilizes, but the risk profile is high.
The main risk is the high financial leverage (Net Debt/EBITDA of 3.2x) in a rising interest rate environment, which could pressure cash flow and limit financial flexibility if the commercial vehicle demand cycle weakens.
Context and risks
Allison Transmission, based in the US, operates in a sector (auto parts) that is under moderate regulatory and demand scrutiny. Its high leverage (Net Debt/EBITDA of 3.2x) makes it sensitive to the interest rate cycle, although its commercial vehicle transmission business has relatively stable demand. The main risk is its exposure to the global supply chain and potential tariffs, given the recent and changing US tariff regime.
Is Allison Transmission stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades in line with the Consumer Cyclical median (within 15%).
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 17.6 | 17.8 | −1% |
| EV / EBITDA | 10.9 | 11.2 | −3% |
| Price / book | 4.6 | 2.9 | +61% |
| Price / sales | 2.1 | 1.3 | +66% |
Sector: median of the 228 Consumer Cyclical companies analysed. In bold, the multiples used for the comparison.
Valuation score: 6.3 out of 10 (median for Consumer Cyclical: 6.6).
Average analyst target: 140.73 USD, +27.1% versus the price.
Classic formulas with standard assumptions (10.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Consumer Cyclical medianValuation
- P/E
- 17.6
- Forward P/E
- 9.8
- EV / EBITDA
- 10.9
- Price / book
- 4.6
- Price / sales
- 2.1
- PEG
- 0.52
- Market cap
- 9.1B USD
- Enterprise value
- 12.9B USD
Profitability
- ROE
- 28.3%
- ROA
- 8.5%
- ROIC (approx.)
- 13.6%
- Gross margin
- 37.8%
- Operating margin
- 19.1%
- Net margin
- 12.0%
- Free cash flow
- 211.0M USD
- FCF yield
- 2.3%
- Cash conversion
- 18%
Solvency
- Total debt
- 4.2B USD
- Net debt
- 3.8B USD
- Cash
- 399.0M USD
- EBITDA
- 1.2B USD
- Net debt / EBITDA
- 3.20
- Debt / equity
- 211.93
- Current ratio
- 1.81
- Quick ratio
- 0.99
Growth
- Revenue growth
- +92.4%
- Earnings growth
- −6.1%
- EPS (TTM)
- 6.29 USD
- EPS (forward)
- 11.32 USD
Dividend
- Dividend yield
- 1.0%
- Payout
- 17.8%
Risk and market
- Beta
- 0.98
- Analyst consensus
- Buy (11)
- Target price
- 140.73 USD
- 52-week range
- 76.01 – 137.62
Recent news
All ALSN news →Compare it with its sector
All 228 in Consumer Cyclical →Frequently asked questions about Allison Transmission
Is Allison Transmission stock cheap or expensive?
On P/E and EV / EBITDA, it trades in line with the Consumer Cyclical median (within 15%). Valuation score: 6.3 out of 10 (median for Consumer Cyclical: 6.6). Average analyst target: 140.73 USD, +27.1% versus the price. This is not investment advice.
What score does Allison Transmission get on MeridIAn Screener?
It scores 6.0 out of 10, rank 959 of 2,130 (better than 51% of the companies analysed). Its strongest category is Momentum (9.4) and its weakest, Dividend (4.5). Analysis of 08/10/2026.
What is Allison Transmission's P/E ratio?
Its P/E is 17.6: the share price equals 17.6 times earnings per share over the last 12 months. The Consumer Cyclical median is 17.8. Based on the earnings analysts expect, the forward P/E is 9.8.
How much is Allison Transmission worth on the stock market?
Its market capitalisation is 9.1B USD and its enterprise value, debt included, is 12.9B USD.
How much debt does Allison Transmission have?
Its net debt (debt minus cash) is 3.8B USD. That is 3.20 times its EBITDA; the Consumer Cyclical median is 1.91.
Does Allison Transmission pay a dividend?
Yes: its dividend yield is 1.05% and it pays out 18% of its earnings.
How has Allison Transmission stock performed over the last year?
It has risen 40.8% over the last year, excluding dividends. Over the last 52 weeks it has traded between 76.01 and 137.62 USD. Past performance does not guarantee future results.
What do analysts think of Allison Transmission?
11 analysts cover it; their average recommendation is “Buy” and their average target is 140.73 USD (+27.1% versus the price). It is an estimate, not market data.