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

Last update: Dec 25, 2024

Our stock screening tool has pinpointed ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as an undervalued stock. NYSE:ALSN maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

ChartMill's Evaluation of Valuation

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:

Compared to the rest of the industry, the Price/Earnings ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 81.54% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.54, ALSN is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.49, the valuation of ALSN can be described as very reasonable.
Based on the Price/Forward Earnings ratio, ALSN is valued cheaper than 89.23% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.99, ALSN is valued rather cheaply.
77.69% of the companies in the same industry are more expensive than ALSN, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALSN indicates a rather cheap valuation: ALSN is cheaper than 90.00% of the companies listed 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 14.22% in the coming years. This may justify a more expensive valuation.

Exploring NYSE:ALSN's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:ALSN, the assigned 8 is a significant indicator of profitability:

ALSN's Return On Assets of 13.52% is amongst the best of the industry. ALSN outperforms 91.54% of its industry peers.
ALSN has a Return On Equity of 44.79%. This is amongst the best in the industry. ALSN outperforms 96.15% of its industry peers.
ALSN has a Return On Invested Capital of 16.73%. This is amongst the best in the industry. ALSN outperforms 88.46% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALSN is above the industry average of 11.13%.
The last Return On Invested Capital (16.73%) for ALSN is above the 3 year average (15.20%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 22.66%, ALSN belongs to the best of the industry, outperforming 98.46% of the companies in the same industry.
Looking at the Operating Margin, with a value of 30.65%, ALSN belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Gross Margin, with a value of 47.66%, ALSN belongs to the top of the industry, outperforming 89.23% of the companies in the same industry.

Health Assessment of 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 7 out of 10:

ALSN has a debt to FCF ratio of 3.39. This is a good value and a sign of high solvency as ALSN would need 3.39 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.39, ALSN is doing good in the industry, outperforming 64.62% of the companies in the same industry.
ALSN has a Current Ratio of 2.83. This indicates that ALSN is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of ALSN (2.83) is better than 72.31% of its industry peers.
A Quick Ratio of 2.25 indicates that ALSN has no problem at all paying its short term obligations.
The Quick ratio of ALSN (2.25) is better than 80.00% of its industry peers.

Unpacking NYSE:ALSN's Growth Rating

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ALSN boasts a 5 out of 10:

The Earnings Per Share has grown by an nice 16.45% 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.
ALSN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.27% yearly.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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

Disclaimer

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.