In a market where value is scarce, NYSE:ALSN offers a refreshing opportunity with its solid fundamentals.

Last update: May 6, 2024

Consider ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as a top value stock, identified by our stock screening tool. NYSE:ALSN shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

How We Gauge Valuation for NYSE:ALSN

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:ALSN scores a 8 out of 10:

ALSN is valuated reasonably with a Price/Earnings ratio of 9.89.
Based on the Price/Earnings ratio, ALSN is valued cheaply inside the industry as 88.37% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ALSN to the average of the S&P500 Index (27.73), we can say ALSN is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.63, the valuation of ALSN can be described as very reasonable.
ALSN's Price/Forward Earnings ratio is rather cheap when compared to the industry. ALSN is cheaper than 92.25% of the companies in the same industry.
ALSN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.41.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 82.17% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ALSN is valued cheaper than 93.02% of the companies in the same industry.
ALSN has an outstanding profitability rating, which may justify a higher PE ratio.

Exploring NYSE:ALSN's Profitability

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:

Looking at the Return On Assets, with a value of 13.29%, ALSN belongs to the top of the industry, outperforming 87.60% of the companies in the same industry.
ALSN's Return On Equity of 50.07% is amongst the best of the industry. ALSN outperforms 97.67% of its industry peers.
With an excellent Return On Invested Capital value of 16.65%, ALSN belongs to the best of the industry, outperforming 89.92% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ALSN is above the industry average of 10.72%.
The 3 year average ROIC (15.20%) for ALSN is below the current ROIC(16.65%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 21.80%, ALSN belongs to the top of the industry, outperforming 98.45% of the companies in the same industry.
The Operating Margin of ALSN (29.94%) is better than 100.00% of its industry peers.
ALSN's Gross Margin of 47.84% is amongst the best of the industry. ALSN outperforms 93.02% of its industry peers.

How do we evaluate the Health for NYSE:ALSN?

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:ALSN, the assigned 6 for health provides valuable insights:

The Debt to FCF ratio of ALSN is 3.69, which is a good value as it means it would take ALSN, 3.69 years of fcf income to pay off all of its debts.
ALSN has a better Debt to FCF ratio (3.69) than 61.24% of its industry peers.
ALSN has a Current Ratio of 2.51. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.51, ALSN is doing good in the industry, outperforming 66.67% of the companies in the same industry.
ALSN has a better Quick ratio (1.95) than 76.74% of its industry peers.

Growth Insights: NYSE:ALSN

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:

ALSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.19%, which is quite impressive.
The Earnings Per Share has been growing by 9.25% on average over the past years. This is quite good.
Looking at the last year, ALSN shows a quite strong growth in Revenue. The Revenue has grown by 8.82% in the last year.
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.

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

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

Disclaimer

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.