NYSE:ALSN stands out as a stock that provides good value for the fundamentals it showcases.

Last update: Sep 22, 2023

Our stock screener has singled out ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as a stellar value proposition. NYSE:ALSN not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Deciphering NYSE:ALSN's Valuation Rating

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:ALSN was assigned a score of 9 for valuation:

Based on the Price/Earnings ratio of 8.78, the valuation of ALSN can be described as reasonable.
92.91% of the companies in the same industry are more expensive than ALSN, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ALSN to the average of the S&P500 Index (25.93), we can say ALSN is valued rather cheaply.
ALSN is valuated cheaply with a Price/Forward Earnings ratio of 7.96.
Based on the Price/Forward Earnings ratio, ALSN is valued cheaply inside the industry as 92.91% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 19.01, ALSN is valued rather cheaply.
83.46% of the companies in the same industry are more expensive than ALSN, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 91.34% of the companies listed in the same industry.
ALSN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ALSN has an outstanding profitability rating, which may justify a higher PE ratio.
ALSN's earnings are expected to grow with 16.47% in the coming years. This may justify a more expensive valuation.

A Closer Look at Profitability for NYSE:ALSN

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:ALSN, the assigned 8 is a significant indicator of profitability:

With an excellent Return On Assets value of 12.87%, ALSN belongs to the best of the industry, outperforming 89.76% of the companies in the same industry.
ALSN has a Return On Equity of 59.19%. This is amongst the best in the industry. ALSN outperforms 99.21% of its industry peers.
ALSN has a Return On Invested Capital of 15.87%. This is amongst the best in the industry. ALSN outperforms 88.19% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALSN is above the industry average of 10.08%.
The last Return On Invested Capital (15.87%) for ALSN is above the 3 year average (12.92%), which is a sign of increasing profitability.
ALSN's Profit Margin of 21.17% is amongst the best of the industry. ALSN outperforms 98.43% of its industry peers.
With an excellent Operating Margin value of 29.37%, ALSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Gross Margin value of 47.70%, ALSN belongs to the best of the industry, outperforming 93.70% of the companies in the same industry.

A Closer Look at Health for NYSE:ALSN

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ALSN has achieved a 5 out of 10:

With a decent Debt to FCF ratio value of 4.16, ALSN is doing good in the industry, outperforming 68.50% of the companies in the same industry.
ALSN has a Current Ratio of 2.15. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.59, ALSN is in the better half of the industry, outperforming 70.87% of the companies in the same industry.

Looking at the Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:ALSN, the assigned 6 reflects its growth potential:

ALSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.52%, which is quite impressive.
Measured over the past years, ALSN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.97% on average per year.
Looking at the last year, ALSN shows a quite strong growth in Revenue. The Revenue has grown by 15.67% in the last year.
Based on estimates for the next years, ALSN will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.47% on average per year.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of ALSN

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.