NYSE:ALSN, an undervalued stock with good fundamentals.

Last update: Dec 26, 2023

Our stock screener has spotted ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as an undervalued stock with solid fundamentals. NYSE:ALSN shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Valuation Insights: NYSE:ALSN

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:ALSN has received a 9 out of 10:

Based on the Price/Earnings ratio of 8.29, the valuation of ALSN can be described as reasonable.
Based on the Price/Earnings ratio, ALSN is valued cheaply inside the industry as 93.94% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.95. ALSN is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 7.88 indicates a rather cheap valuation of ALSN.
Based on the Price/Forward Earnings ratio, ALSN is valued cheaper than 96.21% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ALSN to the average of the S&P500 Index (20.89), we can say ALSN is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaper than 86.36% of the companies in the same industry.
ALSN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALSN is cheaper than 90.91% of the companies in the same industry.
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.
A more expensive valuation may be justified as ALSN's earnings are expected to grow with 13.94% in the coming years.

Profitability Assessment of NYSE:ALSN

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:ALSN, the assigned 8 is noteworthy for profitability:

ALSN has a better Return On Assets (12.91%) than 90.15% of its industry peers.
The Return On Equity of ALSN (54.39%) is better than 98.48% of its industry peers.
ALSN has a better Return On Invested Capital (15.77%) than 87.88% of its industry peers.
ALSN had an Average Return On Invested Capital over the past 3 years of 12.92%. This is above the industry average of 10.54%.
The last Return On Invested Capital (15.77%) for ALSN is above the 3 year average (12.92%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 21.63%, ALSN belongs to the best of the industry, outperforming 98.48% of the companies in the same industry.
ALSN has a Operating Margin of 29.75%. This is amongst the best in the industry. ALSN outperforms 100.00% of its industry peers.
ALSN's Gross Margin of 48.25% is amongst the best of the industry. ALSN outperforms 93.18% of its industry peers.

Health Assessment of 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 4.14, ALSN is doing good in the industry, outperforming 64.39% of the companies in the same industry.
A Current Ratio of 2.41 indicates that ALSN has no problem at all paying its short term obligations.
The Current ratio of ALSN (2.41) is better than 62.88% of its industry peers.
With a decent Quick ratio value of 1.86, ALSN is doing good in the industry, outperforming 75.00% of the companies in the same industry.

Analyzing Growth Metrics

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:ALSN scores a 5 out of 10:

The Earnings Per Share has grown by an impressive 36.63% over the past year.
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.
The Revenue has grown by 10.50% in the past year. This is quite good.
The Earnings Per Share is expected to grow by 12.41% on average over the next years. This is quite good.

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

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

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.