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

Last update: Feb 7, 2024

Our stock screening tool has identified ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as an undervalued gem with strong fundamentals. NYSE:ALSN boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

How do we evaluate the Valuation for NYSE:ALSN?

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:ALSN boasts a 9 out of 10:

Based on the Price/Earnings ratio of 8.71, the valuation of ALSN can be described as reasonable.
ALSN's Price/Earnings ratio is rather cheap when compared to the industry. ALSN is cheaper than 93.89% of the companies in the same industry.
ALSN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.74.
ALSN is valuated reasonably with a Price/Forward Earnings ratio of 8.66.
ALSN's Price/Forward Earnings ratio is rather cheap when compared to the industry. ALSN is cheaper than 95.42% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.37. ALSN is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaper than 85.50% of the companies in the same industry.
89.31% of the companies in the same industry are more expensive than ALSN, based on the Price/Free Cash Flow ratio.
The 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 12.18% in the coming years. This may justify a more expensive valuation.

How do we evaluate the Profitability for 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 12.91%. This is amongst the best in the industry. ALSN outperforms 90.08% of its industry peers.
ALSN has a better Return On Equity (54.39%) than 98.47% of its industry peers.
ALSN has a better Return On Invested Capital (15.77%) than 87.02% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALSN is above the industry average of 10.57%.
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.
ALSN's Profit Margin of 21.63% is amongst the best of the industry. ALSN outperforms 98.47% of its industry peers.
ALSN has a better Operating Margin (29.75%) than 99.24% of its industry peers.
ALSN has a better Gross Margin (48.25%) than 93.13% of its industry peers.

Health Assessment of NYSE:ALSN

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:ALSN was assigned a score of 6 for health:

Looking at the Debt to FCF ratio, with a value of 4.14, ALSN is in the better half of the industry, outperforming 64.12% of the companies in the same industry.
ALSN has a Current Ratio of 2.41. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
ALSN's Current ratio of 2.41 is fine compared to the rest of the industry. ALSN outperforms 63.36% of its industry peers.
The Quick ratio of ALSN (1.86) is better than 74.81% of its industry peers.

Growth Assessment of NYSE:ALSN

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:ALSN has achieved a 6 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.
ALSN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.50%.
ALSN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.41% yearly.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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

Keep in mind

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.