NYSE:ALSN: good value for what you're paying.

Uncover the potential of ALLISON TRANSMISSION HOLDING (NYSE:ALSN) as our stock screener's choice for an undervalued stock. NYSE:ALSN maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Valuation Examination 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's Price/Earnings ratio is rather cheap when compared to the industry. ALSN is cheaper than 82.68% of the companies in the same industry.
• ALSN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.39.
• Based on the Price/Forward Earnings ratio, ALSN is valued cheaply inside the industry as 89.76% of the companies are valued more expensively.
• ALSN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.37.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALSN indicates a somewhat cheap valuation: ALSN is cheaper than 76.38% of the companies listed in the same industry.
• ALSN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ALSN is cheaper than 88.98% of the companies in the same industry.
• 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 14.22% in the coming years.

Looking at the Profitability

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:

• Looking at the Return On Assets, with a value of 13.52%, ALSN belongs to the top of the industry, outperforming 91.34% of the companies in the same industry.
• ALSN has a Return On Equity of 44.79%. This is amongst the best in the industry. ALSN outperforms 95.28% of its industry peers.
• ALSN's Return On Invested Capital of 16.73% is amongst the best of the industry. ALSN outperforms 88.19% of its industry peers.
• ALSN had an Average Return On Invested Capital over the past 3 years of 15.20%. This is above the industry average of 11.19%.
• 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.
• ALSN's Profit Margin of 22.66% is amongst the best of the industry. ALSN outperforms 98.43% of its industry peers.
• The Operating Margin of ALSN (30.65%) is better than 100.00% of its industry peers.
• ALSN's Gross Margin of 47.66% is amongst the best of the industry. ALSN outperforms 88.98% of its industry peers.

Analyzing Health Metrics

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:ALSN scores 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.
• ALSN has a better Debt to FCF ratio (3.39) than 62.99% of its industry peers.
• 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 72.44% of its industry peers.
• A Quick Ratio of 2.25 indicates that ALSN has no problem at all paying its short term obligations.
• ALSN's Quick ratio of 2.25 is amongst the best of the industry. ALSN outperforms 81.89% of its industry peers.

Assessing Growth Metrics for NYSE:ALSN

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:ALSN has achieved a 5 out of 10:

• ALSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.45%, which is quite good.
• 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.
• Based on estimates for the next years, ALSN will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.27% on average per 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.

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

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.