TRANSDIGM GROUP INC (TDG)
US8936411003 - Common Stock
We assign a fundamental rating of 5 out of 10 to TDG. TDG was compared to 65 industry peers in the Aerospace & Defense industry. TDG has an excellent profitability rating, but there are 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
In the past year TDG was profitable.
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
The Return On Assets of TDG (5.79%) is better than 72.31% of its industry peers.
The Return On Invested Capital of TDG (14.15%) is better than 95.38% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TDG is above the industry average of 7.71%.
The last Return On Invested Capital (14.15%) for TDG is above the 3 year average (12.09%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.79% | ||
| ROE | N/A | ||
| ROIC | 14.15% |
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
The Profit Margin of TDG (18.65%) is better than 95.38% of its industry peers.
TDG's Profit Margin has improved in the last couple of years.
TDG has a Operating Margin of 45.92%. This is amongst the best in the industry. TDG outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of TDG has grown nicely.
TDG has a better Gross Margin (59.74%) than 93.85% of its industry peers.
TDG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.92% | ||
| PM (TTM) | 18.65% | ||
| GM | 59.74% |
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
TDG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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.
Compared to 1 year ago, TDG has an improved debt to assets ratio.
2.2 Solvency
TDG has an Altman-Z score of 1.92. 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 1.92. This is in the lower half of the industry: TDG underperforms 61.54% of its industry peers.
TDG has a debt to FCF ratio of 13.23. This is a negative value and a sign of low solvency as TDG would need 13.23 years to pay back of all of its debts.
TDG has a Debt to FCF ratio (13.23) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.23 | ||
| Altman-Z | 1.92 |
ROIC/WACC1.66
WACC8.54%
2.3 Liquidity
TDG has a Current Ratio of 1.58. This is a normal value and indicates that TDG is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.58, TDG is in line with its industry, outperforming 41.54% of the companies in the same industry.
A Quick Ratio of 1.29 indicates that TDG should not have too much problems paying its short term obligations.
TDG has a Quick ratio (1.29) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.58 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
TDG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.50%, which is quite impressive.
The Earnings Per Share has been growing by 12.77% on average over the past years. This is quite good.
Looking at the last year, TDG shows a very strong growth in Revenue. The Revenue has grown by 20.58%.
The Revenue has been growing by 8.74% on average over the past years. This is quite good.
EPS 1Y (TTM)31.5%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%22.42%
Revenue 1Y (TTM)20.58%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%17.98%
3.2 Future
TDG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.13% yearly.
Based on estimates for the next years, TDG will show a small growth in Revenue. The Revenue will grow by 4.69% on average per year.
EPS Next Y14.94%
EPS Next 2Y13.93%
EPS Next 3Y12.3%
EPS Next 5Y4.13%
Revenue Next Year12.4%
Revenue Next 2Y9.96%
Revenue Next 3Y8.16%
Revenue Next 5Y4.69%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 36.50 indicates a quite expensive valuation of TDG.
Based on the Price/Earnings ratio, TDG is valued a bit cheaper than the industry average as 61.54% of the companies are valued more expensively.
TDG is valuated rather expensively when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 31.75 indicates a quite expensive valuation of TDG.
TDG's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.82. TDG is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.5 | ||
| Fwd PE | 31.75 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as TDG.
Based on the Price/Free Cash Flow ratio, TDG is valued a bit cheaper than 72.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.09 | ||
| EV/EBITDA | 22.95 |
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.
The excellent profitability rating of TDG may justify a higher PE ratio.
A more expensive valuation may be justified as TDG's earnings are expected to grow with 12.30% in the coming years.
PEG (NY)2.44
PEG (5Y)2.86
EPS Next 2Y13.93%
EPS Next 3Y12.3%
5. Dividend
5.1 Amount
TDG has a Yearly Dividend Yield of 8.77%, which is a nice return.
Compared to an average industry Dividend Yield of 1.49, TDG pays a better dividend. On top of this TDG pays more dividend than 100.00% of the companies listed in the same industry.
TDG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.77% |
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 Years1
Div Non Decr Years1
5.3 Sustainability
137.61% of the earnings are spent on dividend by TDG. This is not a sustainable payout ratio.
TDG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP137.61%
EPS Next 2Y13.93%
EPS Next 3Y12.3%
TRANSDIGM GROUP INC
NYSE:TDG (11/21/2024, 8:04:00 PM)
After market: 1240.13 0 (0%)1240.13
-52.98 (-4.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap69.73B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.77% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.5 | ||
| Fwd PE | 31.75 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.44
PEG (5Y)2.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.79% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 45.92% | ||
| PM (TTM) | 18.65% | ||
| GM | 59.74% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.58 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)31.5%
EPS 3Y40.97%
EPS 5Y
EPS Q2Q%
EPS Next Y14.94%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.58%
Revenue growth 3Y18.28%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y