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

Last update: Jun 17, 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 do we evaluate the Valuation for NYSE:ALSN?

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:ALSN has earned a 8 for valuation:

With a Price/Earnings ratio of 9.67, the valuation of ALSN can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 88.28% of the companies listed in the same industry.
ALSN is valuated cheaply when we compare the Price/Earnings ratio to 28.42, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 8.18, which indicates a very decent valuation of ALSN.
Based on the Price/Forward Earnings ratio, ALSN is valued cheaply inside the industry as 89.84% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ALSN to the average of the S&P500 Index (20.02), we can say ALSN is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
ALSN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALSN is cheaper than 92.97% of the companies in the same industry.
ALSN has an outstanding profitability rating, which may justify a higher PE ratio.
ALSN's earnings are expected to grow with 13.39% in the coming years. This may justify a more expensive valuation.

Profitability Examination for 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 Return On Assets of 13.29%. This is amongst the best in the industry. ALSN outperforms 88.28% of its industry peers.
ALSN has a better Return On Equity (50.07%) than 96.88% of its industry peers.
The Return On Invested Capital of ALSN (16.65%) is better than 89.84% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALSN is above the industry average of 10.66%.
The last Return On Invested Capital (16.65%) for ALSN is above the 3 year average (15.20%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 21.80%, ALSN belongs to the top of the industry, outperforming 98.44% of the companies in the same industry.
With an excellent Operating Margin value of 29.94%, ALSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Gross Margin of ALSN (47.84%) is better than 92.97% of its industry peers.

A Closer Look at Health for NYSE:ALSN

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:ALSN has earned a 6 out of 10:

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's Debt to FCF ratio of 3.69 is fine compared to the rest of the industry. ALSN outperforms 64.06% of its industry peers.
A Current Ratio of 2.51 indicates that ALSN has no problem at all paying its short term obligations.
The Current ratio of ALSN (2.51) is better than 66.41% of its industry peers.
With a decent Quick ratio value of 1.95, ALSN is doing good in the industry, outperforming 75.78% of the companies in the same industry.

Growth Analysis for NYSE:ALSN

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:ALSN has earned a 5 for growth:

The Earnings Per Share has grown by an impressive 23.19% over the past year.
ALSN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.25% yearly.
Looking at the last year, ALSN shows a quite strong growth in Revenue. The Revenue has grown by 8.82% in the last 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.

Our latest full fundamental report of ALSN contains the most current fundamental analsysis.

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.