TRANSDIGM GROUP INC (TDG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TDG - US8936411003 - Common Stock
1435.96 USD
+16.77 (+1.18%)
1435.96 USD
0 (0%)
Overall TDG gets a fundamental rating of 6 out of 10. We evaluated TDG against 73 industry peers in the Aerospace & Defense industry. While TDG has a great profitability rating, there are some minor concerns on its financial health. TDG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year TDG was profitable.
- TDG had a positive operating cash flow in the past year.
- TDG had positive earnings in each of the past 5 years.
- In the past 5 years TDG always reported a positive cash flow from operatings.
1.2 Ratios
- TDG has a better Return On Assets (8.15%) than 87.67% of its industry peers.
- With an excellent Return On Invested Capital value of 15.43%, TDG belongs to the best of the industry, outperforming 94.52% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for TDG is significantly above the industry average of 8.56%.
- The 3 year average ROIC (14.06%) for TDG is below the current ROIC(15.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.15% | ||
| ROE | N/A | ||
| ROIC | 15.43% |
ROA(3y)6.75%
ROA(5y)5.54%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)14.06%
ROIC(5y)12.02%
1.3 Margins
- TDG has a Profit Margin of 21.13%. This is amongst the best in the industry. TDG outperforms 100.00% of its industry peers.
- In the last couple of years the Profit Margin of TDG has grown nicely.
- TDG has a Operating Margin of 47.96%. This is amongst the best in the industry. TDG outperforms 100.00% of its industry peers.
- TDG's Operating Margin has improved in the last couple of years.
- The Gross Margin of TDG (60.61%) is better than 90.41% of its industry peers.
- TDG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 47.96% | ||
| PM (TTM) | 21.13% | ||
| GM | 60.61% |
OM growth 3Y5.22%
OM growth 5Y5.99%
PM growth 3Y13.72%
PM growth 5Y15.97%
GM growth 3Y1.95%
GM growth 5Y2.8%
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.
- TDG has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.07 indicates that TDG is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of TDG (2.07) is worse than 75.34% of its industry peers.
- TDG has a debt to FCF ratio of 16.53. This is a negative value and a sign of low solvency as TDG would need 16.53 years to pay back of all of its debts.
- TDG has a Debt to FCF ratio (16.53) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 16.53 | ||
| Altman-Z | 2.07 |
ROIC/WACC1.58
WACC9.78%
2.3 Liquidity
- TDG has a Current Ratio of 3.21. This indicates that TDG is financially healthy and has no problem in meeting its short term obligations.
- TDG has a better Current ratio (3.21) than 65.75% of its industry peers.
- A Quick Ratio of 2.25 indicates that TDG has no problem at all paying its short term obligations.
- The Quick ratio of TDG (2.25) is better than 64.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.21 | ||
| Quick Ratio | 2.25 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 9.95% over the past year.
- TDG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.91% yearly.
- The Revenue has grown by 11.21% in the past year. This is quite good.
- The Revenue has been growing by 11.59% on average over the past years. This is quite good.
EPS 1Y (TTM)9.95%
EPS 3Y29.48%
EPS 5Y20.91%
EPS Q2Q%10.07%
Revenue 1Y (TTM)11.21%
Revenue growth 3Y17.61%
Revenue growth 5Y11.59%
Sales Q2Q%11.53%
3.2 Future
- TDG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.74% yearly.
- The Revenue is expected to grow by 7.87% on average over the next years.
EPS Next Y4.71%
EPS Next 2Y11.57%
EPS Next 3Y12.92%
EPS Next 5Y13.74%
Revenue Next Year13.17%
Revenue Next 2Y10.51%
Revenue Next 3Y9.46%
Revenue Next 5Y7.87%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 38.44, the valuation of TDG can be described as expensive.
- TDG's Price/Earnings ratio is a bit cheaper when compared to the industry. TDG is cheaper than 73.97% of the companies in the same industry.
- TDG is valuated rather expensively when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 36.71, the valuation of TDG can be described as expensive.
- TDG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TDG is cheaper than 67.12% of the companies in the same industry.
- TDG's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.44 | ||
| Fwd PE | 36.71 |
4.2 Price Multiples
- 67.12% of the companies in the same industry are more expensive than TDG, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of TDG indicates a somewhat cheap valuation: TDG is cheaper than 73.97% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.53 | ||
| EV/EBITDA | 23.12 |
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 12.92% in the coming years.
PEG (NY)8.16
PEG (5Y)1.84
EPS Next 2Y11.57%
EPS Next 3Y12.92%
5. Dividend
5.1 Amount
- TDG has a Yearly Dividend Yield of 6.34%, which is a nice return.
- Compared to an average industry Dividend Yield of 0.34, 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 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.34% |
5.2 History
- The dividend of TDG is nicely growing with an annual growth rate of 36.77%!
- TDG has been paying a dividend for over 5 years, so it has already some track record.
- The dividend of TDG decreased in the last 3 years.
Dividend Growth(5Y)36.77%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 516.02% of the earnings are spent on dividend by TDG. This is not a sustainable payout ratio.
- TDG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP516.02%
EPS Next 2Y11.57%
EPS Next 3Y12.92%
TRANSDIGM GROUP INC / TDG FAQ
Can you provide the ChartMill fundamental rating for TRANSDIGM GROUP INC?
ChartMill assigns a fundamental rating of 6 / 10 to TDG.
Can you provide the valuation status for TRANSDIGM GROUP INC?
ChartMill assigns a valuation rating of 4 / 10 to TRANSDIGM GROUP INC (TDG). This can be considered as Fairly Valued.
What is the profitability of TDG stock?
TRANSDIGM GROUP INC (TDG) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for TDG stock?
The Price/Earnings (PE) ratio for TRANSDIGM GROUP INC (TDG) is 38.44 and the Price/Book (PB) ratio is -8.35.
What is the expected EPS growth for TRANSDIGM GROUP INC (TDG) stock?
The Earnings per Share (EPS) of TRANSDIGM GROUP INC (TDG) is expected to grow by 4.71% in the next year.