NYSE:ALSN is an undervalued gem with solid fundamentals.

Last update: Jul 8, 2024

ALLISON TRANSMISSION HOLDING (NYSE:ALSN) has caught the attention of our stock screener as a great value stock. NYSE:ALSN excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

What does the Valuation looks like 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 8 out of 10:

ALSN is valuated reasonably with a Price/Earnings ratio of 9.91.
Compared to the rest of the industry, the Price/Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 87.40% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ALSN to the average of the S&P500 Index (28.36), we can say ALSN is valued rather cheaply.
ALSN is valuated reasonably with a Price/Forward Earnings ratio of 8.38.
ALSN's Price/Forward Earnings ratio is rather cheap when compared to the industry. ALSN is cheaper than 88.98% 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 20.19.
Based on the Enterprise Value to EBITDA ratio, ALSN is valued cheaper than 83.46% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALSN is valued cheaply inside the industry as 90.55% of the companies are valued more expensively.
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 13.39% in the coming years.

Looking at the 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:

ALSN has a better Return On Assets (13.29%) than 88.19% of its industry peers.
The Return On Equity of ALSN (50.07%) is better than 96.85% of its industry peers.
With an excellent Return On Invested Capital value of 16.65%, ALSN belongs to the best of the industry, outperforming 88.98% 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 10.80%.
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.
ALSN's Profit Margin of 21.80% is amongst the best of the industry. ALSN outperforms 98.43% of its industry peers.
Looking at the Operating Margin, with a value of 29.94%, ALSN belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
ALSN has a Gross Margin of 47.84%. This is amongst the best in the industry. ALSN outperforms 92.91% of its industry peers.

Understanding NYSE:ALSN's Health Score

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 6 out of 10:

ALSN has a debt to FCF ratio of 3.69. This is a good value and a sign of high solvency as ALSN would need 3.69 years to pay back of all of its debts.
ALSN has a better Debt to FCF ratio (3.69) than 63.78% 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.
ALSN has a better Current ratio (2.51) than 66.14% of its industry peers.
The Quick ratio of ALSN (1.95) is better than 75.59% of its industry peers.

Growth Analysis for NYSE:ALSN

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 5 out of 10:

The Earnings Per Share has grown by an impressive 23.19% 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 9.25% on average per year.
ALSN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.82%.
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.

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.