TRANSDIGM GROUP INC (TDG) Stock Fundamental Analysis
NYSE:TDG - New York Stock Exchange, Inc. - US8936411003 - Common Stock - Currency: USD
TDG gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. TDG has an excellent profitability rating, but there are some minor concerns on its financial health. TDG is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
TDG had positive earnings in the past year.
TDG had a positive operating cash flow in the past year.
In the past 5 years TDG has always been profitable.
Each year in the past 5 years TDG had a positive operating cash flow.
1.2 Ratios
TDG has a better Return On Assets (7.64%) than 78.13% of its industry peers.
TDG has a better Return On Invested Capital (14.82%) than 95.31% of its industry peers.
TDG had an Average Return On Invested Capital over the past 3 years of 12.09%. This is above the industry average of 7.98%.
The 3 year average ROIC (12.09%) for TDG is below the current ROIC(14.82%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.64% | ||
| ROE | N/A | ||
| ROIC | 14.82% |
ROA(3y)5.47%
ROA(5y)4.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.09%
ROIC(5y)10.39%
1.3 Margins
TDG has a Profit Margin of 20.15%. This is amongst the best in the industry. TDG outperforms 96.88% of its industry peers.
TDG's Profit Margin has improved in the last couple of years.
TDG's Operating Margin of 47.17% is amongst the best of the industry. TDG outperforms 100.00% of its industry peers.
TDG's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 60.65%, TDG belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Gross Margin of TDG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 47.17% | ||
| PM (TTM) | 20.15% | ||
| GM | 60.65% |
OM growth 3Y7.74%
OM growth 5Y2.75%
PM growth 3Y13.82%
PM growth 5Y4.58%
GM growth 3Y3.98%
GM growth 5Y1.47%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TDG is creating some value.
The number of shares outstanding for TDG has been increased compared to 1 year ago.
The number of shares outstanding for TDG has been increased compared to 5 years ago.
The debt/assets ratio for TDG has been reduced compared to a year ago.
2.2 Solvency
TDG has an Altman-Z score of 2.33. This is not the best score and indicates that TDG is in the grey zone with still only limited risk for bankruptcy at the moment.
TDG has a Altman-Z score of 2.33. This is in the lower half of the industry: TDG underperforms 60.94% of its industry peers.
TDG has a debt to FCF ratio of 12.59. This is a negative value and a sign of low solvency as TDG would need 12.59 years to pay back of all of its debts.
TDG has a Debt to FCF ratio (12.59) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 12.59 | ||
| Altman-Z | 2.33 |
ROIC/WACC1.66
WACC8.94%
2.3 Liquidity
A Current Ratio of 2.70 indicates that TDG has no problem at all paying its short term obligations.
The Current ratio of TDG (2.70) is better than 64.06% of its industry peers.
A Quick Ratio of 1.85 indicates that TDG should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.85, TDG is doing good in the industry, outperforming 71.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.85 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.92% over the past year.
The Earnings Per Share has been growing by 12.77% on average over the past years. This is quite good.
TDG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.91%.
TDG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.74% yearly.
EPS 1Y (TTM)21.92%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%9.36%
Revenue 1Y (TTM)16.91%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%12.13%
3.2 Future
Based on estimates for the next years, TDG will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.96% on average per year.
TDG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.56% yearly.
EPS Next Y11.43%
EPS Next 2Y13.59%
EPS Next 3Y13.76%
EPS Next 5Y8.96%
Revenue Next Year12.35%
Revenue Next 2Y10.3%
Revenue Next 3Y9.29%
Revenue Next 5Y9.56%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 37.23, the valuation of TDG can be described as expensive.
TDG's Price/Earnings ratio is in line with the industry average.
TDG's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 29.63.
The Price/Forward Earnings ratio is 29.43, which means the current valuation is very expensive for TDG.
Based on the Price/Forward Earnings ratio, TDG is valued a bit cheaper than the industry average as 60.94% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, TDG is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.23 | ||
| Fwd PE | 29.43 |
4.2 Price Multiples
TDG's Enterprise Value to EBITDA is on the same level as the industry average.
73.44% of the companies in the same industry are more expensive than TDG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.36 | ||
| EV/EBITDA | 22.86 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TDG does not grow enough to justify the current Price/Earnings ratio.
TDG has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TDG's earnings are expected to grow with 13.76% in the coming years.
PEG (NY)3.26
PEG (5Y)2.92
EPS Next 2Y13.59%
EPS Next 3Y13.76%
5. Dividend
5.1 Amount
TDG has a Yearly Dividend Yield of 5.71%, which is a nice return.
TDG's Dividend Yield is rather good when compared to the industry average which is at 1.45. TDG pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, TDG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.71% |
5.2 History
The dividend of TDG has a limited annual growth rate of 2.56%.
TDG has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)2.56%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
TDG pays out 267.40% of its income as dividend. This is not a sustainable payout ratio.
TDG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP267.4%
EPS Next 2Y13.59%
EPS Next 3Y13.76%
1290.13
-22.41 (-1.71%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners95.17%
Inst Owner Change3.22%
Ins Owners0.31%
Ins Owner Change-0.06%
Market Cap72.35B
Analysts79.26
Price Target1509.92 (17.04%)
Short Float %2.02%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.71% |
Yearly Dividend36.65
Dividend Growth(5Y)2.56%
DP267.4%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.05%
Min EPS beat(2)1.31%
Max EPS beat(2)4.79%
EPS beat(4)4
Avg EPS beat(4)4.21%
Min EPS beat(4)1.31%
Max EPS beat(4)6.59%
EPS beat(8)8
Avg EPS beat(8)6.75%
EPS beat(12)12
Avg EPS beat(12)6.51%
EPS beat(16)15
Avg EPS beat(16)6.19%
Revenue beat(2)0
Avg Revenue beat(2)-1.3%
Min Revenue beat(2)-2.19%
Max Revenue beat(2)-0.41%
Revenue beat(4)2
Avg Revenue beat(4)-0.13%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)1.05%
Revenue beat(8)5
Avg Revenue beat(8)1.32%
Revenue beat(12)7
Avg Revenue beat(12)0.79%
Revenue beat(16)8
Avg Revenue beat(16)0.04%
PT rev (1m)-0.78%
PT rev (3m)-0.43%
EPS NQ rev (1m)-1.45%
EPS NQ rev (3m)-6.48%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)-3.05%
Revenue NQ rev (1m)-0.86%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.23 | ||
| Fwd PE | 29.43 | ||
| P/S | 8.87 | ||
| P/FCF | 36.36 | ||
| P/OCF | 33.48 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.86 |
EPS(TTM)34.65
EY2.69%
EPS(NY)43.84
Fwd EY3.4%
FCF(TTM)35.49
FCFY2.75%
OCF(TTM)38.53
OCFY2.99%
SpS145.45
BVpS-111.59
TBVpS-355.24
PEG (NY)3.26
PEG (5Y)2.92
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.64% | ||
| ROE | N/A | ||
| ROCE | 20.01% | ||
| ROIC | 14.82% | ||
| ROICexc | 16.91% | ||
| ROICexgc | 78.42% | ||
| OM | 47.17% | ||
| PM (TTM) | 20.15% | ||
| GM | 60.65% | ||
| FCFM | 24.4% |
ROA(3y)5.47%
ROA(5y)4.47%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.09%
ROIC(5y)10.39%
ROICexc(3y)15.91%
ROICexc(5y)13.84%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.13%
ROCE(5y)13.86%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y26.62%
ROICexc growth 5Y11.93%
OM growth 3Y7.74%
OM growth 5Y2.75%
PM growth 3Y13.82%
PM growth 5Y4.58%
GM growth 3Y3.98%
GM growth 5Y1.47%
F-Score7
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 12.59 | ||
| Debt/EBITDA | 5.97 | ||
| Cap/Depr | 51.66% | ||
| Cap/Sales | 2.1% | ||
| Interest Coverage | 3.45 | ||
| Cash Conversion | 51.71% | ||
| Profit Quality | 121.05% | ||
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.85 | ||
| Altman-Z | 2.33 |
F-Score7
WACC8.94%
ROIC/WACC1.66
Cap/Depr(3y)50.6%
Cap/Depr(5y)46.08%
Cap/Sales(3y)2.13%
Cap/Sales(5y)2.13%
Profit Quality(3y)110.44%
Profit Quality(5y)136%
High Growth Momentum
Growth
EPS 1Y (TTM)21.92%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%9.36%
EPS Next Y11.43%
EPS Next 2Y13.59%
EPS Next 3Y13.76%
EPS Next 5Y8.96%
Revenue 1Y (TTM)16.91%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%12.13%
Revenue Next Year12.35%
Revenue Next 2Y10.3%
Revenue Next 3Y9.29%
Revenue Next 5Y9.56%
EBIT growth 1Y22.2%
EBIT growth 3Y27.44%
EBIT growth 5Y11.72%
EBIT Next Year30.53%
EBIT Next 3Y15.59%
EBIT Next 5Y13.06%
FCF growth 1Y116.07%
FCF growth 3Y32.51%
FCF growth 5Y15.52%
OCF growth 1Y106.6%
OCF growth 3Y30.84%
OCF growth 5Y15.03%