NYSE:ALSN is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Oct 23, 2023

ALLISON TRANSMISSION HOLDING (NYSE:ALSN) was identified as a decent value stock by our stock screener. NYSE:ALSN scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

ChartMill's Evaluation of Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:ALSN has achieved a 9 out of 10:

The Price/Earnings ratio is 8.46, which indicates a very decent valuation of ALSN.
Based on the Price/Earnings ratio, ALSN is valued cheaply inside the industry as 92.31% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ALSN to the average of the S&P500 Index (25.03), we can say ALSN is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.53, the valuation of ALSN can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 92.31% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ALSN to the average of the S&P500 Index (18.58), we can say ALSN is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaper than 83.85% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALSN is valued cheaply inside the industry as 91.54% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of ALSN may justify a higher PE ratio.
ALSN's earnings are expected to grow with 17.71% in the coming years. This may justify a more expensive valuation.

Profitability Assessment of NYSE:ALSN

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:ALSN has earned a 8 out of 10:

ALSN has a Return On Assets of 12.87%. This is amongst the best in the industry. ALSN outperforms 90.00% of its industry peers.
Looking at the Return On Equity, with a value of 59.19%, ALSN belongs to the top of the industry, outperforming 99.23% of the companies in the same industry.
ALSN has a Return On Invested Capital of 15.87%. This is amongst the best in the industry. ALSN outperforms 88.46% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALSN is above the industry average of 9.96%.
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 has a Profit Margin of 21.17%. This is amongst the best in the industry. ALSN outperforms 98.46% of its industry peers.
The Operating Margin of ALSN (29.37%) is better than 100.00% of its industry peers.
ALSN's Gross Margin of 47.70% is amongst the best of the industry. ALSN outperforms 93.85% of its industry peers.

A Closer Look at Health for NYSE:ALSN

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:ALSN, the assigned 5 reflects its health status:

With a decent Debt to FCF ratio value of 4.16, ALSN is doing good in the industry, outperforming 69.23% of the companies in the same industry.
A Current Ratio of 2.15 indicates that ALSN has no problem at all paying its short term obligations.
The Quick ratio of ALSN (1.59) is better than 70.77% of its industry peers.

Deciphering NYSE:ALSN's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:ALSN has received a 6 out of 10:

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.
The Earnings Per Share is expected to grow by 12.52% on average over the next years. This is quite good.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of ALSN for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.