Don't overlook NYSE:ALSN—it's a hidden gem with strong fundamentals and an attractive price tag.

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.

A Closer Look at Valuation for NYSE:ALSN

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:ALSN has achieved a 8 out of 10:

• 84.50% of the companies in the same industry are more expensive than ALSN, based on the Price/Earnings ratio.
• ALSN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 31.01.
• With a Price/Forward Earnings ratio of 10.68, 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 86.05% of the companies in the same industry.
• ALSN is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.36, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, ALSN is valued a bit cheaper than the industry average as 77.52% 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 88.37% of the companies in the same industry.
• The excellent profitability rating of ALSN may justify a higher PE ratio.
• ALSN's earnings are expected to grow with 12.96% in the coming years. This may justify a more expensive valuation.

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 13.21%, ALSN belongs to the top of the industry, outperforming 89.15% of the companies in the same industry.
• With an excellent Return On Equity value of 46.09%, ALSN belongs to the best of the industry, outperforming 96.12% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 16.56%, ALSN belongs to the best of the industry, outperforming 89.15% of the companies in the same industry.
• ALSN had an Average Return On Invested Capital over the past 3 years of 15.20%. This is above the industry average of 11.21%.
• The last Return On Invested Capital (16.56%) for ALSN is above the 3 year average (15.20%), which is a sign of increasing profitability.
• ALSN's Profit Margin of 21.95% is amongst the best of the industry. ALSN outperforms 98.45% of its industry peers.
• ALSN has a Operating Margin of 30.30%. This is amongst the best in the industry. ALSN outperforms 100.00% of its industry peers.
• The Gross Margin of ALSN (47.75%) is better than 90.70% of its industry peers.

Health Analysis for NYSE:ALSN

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ALSN has received a 7 out of 10:

• The Debt to FCF ratio of ALSN is 3.53, which is a good value as it means it would take ALSN, 3.53 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 3.53, ALSN is in the better half of the industry, outperforming 64.34% of the companies in the same industry.
• A Current Ratio of 2.78 indicates that ALSN has no problem at all paying its short term obligations.
• With a decent Current ratio value of 2.78, ALSN is doing good in the industry, outperforming 71.32% of the companies in the same industry.
• ALSN has a Quick Ratio of 2.19. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
• Looking at the Quick ratio, with a value of 2.19, ALSN is in the better half of the industry, outperforming 77.52% of the companies in the same industry.

Analyzing Growth Metrics

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:ALSN was assigned a score of 5 for growth:

• ALSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.24%, which is quite good.
• The Earnings Per Share has been growing by 9.25% on average over the past years. This is quite good.
• 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.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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. 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.