TransDigm Group (TDG)
Industrials · $61.1B market cap · SEC CIK 0001260221
fundamentals score out of 100
Next reports on Nov 10, 2026, after the close, with analysts expecting $12.41 in earnings per share.
The case for TDG
- Generated $1.8B of free cash flow in FY2025, 21% of revenue.
- 21% of revenue drops through to net profit.
- Revenue growing 16.6% year over year.
- Has compounded revenue at 11.6% a year over five years.
- Gross margin of 60% absorbs cost shocks.
- Current assets cover the near-term bills 3.0 times over.
The case against
- Long-term debt of $29.3B would take 14 years of operating cash flow to repay.
- A yield of 8.7% is usually the market pricing in a cut.
- Near the bottom of its 52-week range, 24% below the high. Falling prices usually have a reason; find it first.
- Owes more than it owns: shareholder equity is -$9.3B, usually the result of buybacks funded with debt. ROE and price-to-book mean little here.
- Dividend takes 502% of earnings, leaving little cushion.
- Price/sales of 6.1× is higher than 86% of Industrials companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 38 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 74 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 75 |
| Momentumhow the price has behaved lately | 20 |
| Stabilityhow violently it moves, what it owes and what it pays you | 34 |
- Shareholder equity is negative, so return on equity, price-to-book and debt-to-equity are left out.
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
Key numbers
| Price / earnings | 28.7× |
|---|---|
| Price / book | n/m (negative equity) |
| Price / sales | 6.1× |
| Revenue growth (YoY) | +16.6% |
| EPS growth (YoY) | +10.3% |
| Gross margin | 60% |
| Operating margin | 46% |
| Net margin | 21% |
| Return on assets | 8.6% (ROE not meaningful: negative equity) |
| Debt / equity | n/m (negative equity) |
| Current ratio | 3.02 |
| Dividend yield | 8.65% |
| Beta | 0.97 |
| 52-week range | $1,071 – $1,463 |
| Position in that range | 11% of the way up |
| 3-month return | -16.5% |
| 1-year return | -13.5% |
Five years of financials, as filed
Pulled from TransDigm Group's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $8.8B | $7.9B | $6.6B | $5.4B | $4.8B |
| Gross profit | $5.3B | $4.7B | $3.8B | $3.1B | $2.5B |
| Operating income | $4.2B | $3.5B | $2.9B | $2.2B | $1.7B |
| Net income | $2.1B | $1.7B | $1.3B | $866M | $680M |
| Operating cash flow | $2.0B | $2.0B | $1.4B | $948M | $913M |
| Capital expenditure | $222M | $165M | $139M | $119M | $105M |
| Total assets | $23.8B | $21.5B | $20.7B | $18.5B | $19.2B |
| Total liabilities | $33.0B | $27.8B | $24.2B | $21.8B | $21.9B |
| Shareholder equity | -$9.3B | -$6.3B | -$3.5B | -$3.3B | -$2.6B |
| Cash | $2.5B | $2.5B | $4.1B | $3.3B | $4.8B |
| Long-term debt | $29.3B | $24.4B | $21.4B | $19.5B | $19.5B |
| Free cash flow | $1.8B | $1.9B | $1.2B | $829M | $808M |
| Gross margin | 60.1% | 58.8% | 58.3% | 57.1% | 52.4% |
| Operating margin | 47.2% | 44.5% | 44.4% | 40.8% | 35.2% |
| Net margin | 23.5% | 21.6% | 19.7% | 16.0% | 14.2% |
| Diluted shares | 58.2M | 57.8M | 57.2M | 58.2M | 58.4M |
Share count is essentially flat over 4 years.
What TransDigm Group says it does
The Company TD Group, through its wholly-owned subsidiary, TransDigm Inc., is a leading global designer, producer and supplier of highly engineered aircraft components that are critical to the safe and effective operation of nearly all commercial and military aircraft worldwide. Our products are represented in nearly every commercial and military aircraft in service today. Our business is well diversified due to the broad range of products we offer to our customers. We estimate that approximately 90% of our net sales for fiscal year 2025 were generated by proprietary products. Most of our products generate significant aftermarket revenue. Once our parts are designed into and sold on a new aircraft, we generate net sales from aftermarket consumption over the life of that aircraft, which is generally estimated to be approximately 25 to 30 years. A typical platform can be produced for 20 to 30 years, giving us an estimated product life…
Risk factors TDG lists in its 10-K
- Our business focuses almost exclusively on the aerospace and defense industry
- We may rely heavily on certain customers for much of our sales
- We generally do not have guaranteed future sales of our products. Further, when we enter into fixed price contracts with some of our customers, we take the risk for cost overruns
- We intend to pursue acquisitions. Our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired operations
- Our indebtedness could adversely affect our financial health and could harm our ability to react to changes to our business and prevent us from fulfilling our obligations under our indebtedness
- The terms of the senior secured credit facility and indentures governing the Notes may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions
- We are dependent on our executive officers, senior management team and highly trained employees and any work stoppage, difficulty hiring similar employees, or ineffective succession planning could adversely affect our business
- Public health crises, and health pandemics, epidemics and outbreaks could adversely affect our business
- Our sales to manufacturers of aircraft are cyclical, and a downturn in sales to these manufacturers may adversely affect us
- Our business is dependent on the availability of certain components and raw materials from suppliers
- Climate-related regulations designed to address climate change may result in additional compliance costs
- Our operations depend on our manufacturing facilities, which are subject to physical and other risks that could disrupt production
- Operations and sales outside of the United States may be subject to additional risks
- We are subject to certain unique business risks as a result of supplying equipment and services to the U.S. Government