TransDigm Group (TDG)

Industrials · $68.3B market cap · SEC CIK 0001260221

Next reports on Feb 1, 2027, with analysts expecting $9.87 in earnings per share.

52-week range $1,071 to $1,463. 16% below its 52-week high and 14% above its low.

The case for TDG

• Generated $1.9B of free cash flow in FY2026, 18% of revenue.
• 21% of revenue drops through to net profit.
• Revenue growing 16.6% year over year.
• Pays a 7.8% dividend while you wait.
• Reasonably priced for its growth: 32.1× earnings, where 17% a year of growth plus a 7.8% dividend (7.6% of it counted) would justify about 46×.
• Has compounded revenue at 11.6% a year over five years.

The case against

• Long-term debt of $33.9B would take 15 years of operating cash flow to repay.
• Operating profit covers its interest bill only 2.7 times.
• Owes more than it owns: shareholder equity is −$10.0B, 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 6.8× is higher than 94% 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. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• 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.

The financials

The financials, five years deep

Pulled from TransDigm Group's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

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 believe our business strategy is built on the following key strengths: (1) a focus on proprietary products with significant aftermarket content, (2) successful execution of our value-driven operating strategy focused on our three core value drivers, (3) a decentralized organizational structure, (4) a disciplined acquisition strategy, and (5) an efficient capital structure. 1 Table of Contents Proprietary Aerospace and Aftermarket. We estimate that approximately 90% of…

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
• Our business may be adversely affected if we lose our government or industry approvals or if more stringent government regulations are enacted or if industry oversight is increased
• We could incur substantial costs as a result of data protection concerns
• We could incur substantial costs as a result of violations of or liabilities under environmental laws and regulations
• We may be subject to periodic litigation and regulatory proceedings, which may adversely affect our business and financial performance
• We could be adversely affected by the impact of failure, misuse or quality issues of our products
• We have recorded a significant amount of intangible assets, which may never generate the returns we expect
• We may be subject to risks relating to changes in our tax rates or exposure to additional income tax liabilities
• We do not regularly declare and pay quarterly or annual cash dividends on our stock
• Common stock repurchases under our capital allocation strategy are subject to uncertainties of the market and may affect our common stock price
• U.S. military spending is dependent upon the U.S. defense budget
• Our stock price may be volatile, and an investment in our common stock could suffer a decline in value

Filings

Other Industrials companies