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TRANSDIGM GROUP INC (TDG) Stock Fundamental Analysis

NYSE:TDG - New York Stock Exchange, Inc. - US8936411003 - Common Stock

1358.01  +17.99 (+1.34%)

After market: 1358.01 0 (0%)

Fundamental Rating

5

Overall TDG gets a fundamental rating of 5 out of 10. We evaluated TDG against 65 industry peers in the Aerospace & Defense industry. TDG scores excellent on profitability, but there are concerns on its financial health. TDG shows excellent growth, but is valued quite expensive already.


Dividend Valuation Growth Profitability Health

8

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.
In the past 5 years TDG always reported a positive cash flow from operatings.
TDG Yearly Net Income VS EBIT VS OCF VS FCFTDG Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

1.2 Ratios

With a decent Return On Assets value of 5.79%, TDG is doing good in the industry, outperforming 70.31% of the companies in the same industry.
TDG's Return On Invested Capital of 14.15% is amongst the best of the industry. TDG outperforms 96.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TDG is above the industry average of 7.66%.
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 RankSector 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%
TDG Yearly ROA, ROE, ROICTDG Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 -20 -40 -60 -80

1.3 Margins

Looking at the Profit Margin, with a value of 18.65%, TDG belongs to the top of the industry, outperforming 96.88% of the companies in the same industry.
In the last couple of years the Profit Margin of TDG has grown nicely.
Looking at the Operating Margin, with a value of 45.92%, TDG belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
TDG's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 59.74%, 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 RankSector 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%
TDG Yearly Profit, Operating, Gross MarginsTDG Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40 50

3

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.
Compared to 1 year ago, TDG has more shares outstanding
Compared to 5 years ago, TDG has more shares outstanding
The debt/assets ratio for TDG has been reduced compared to a year ago.
TDG Yearly Shares OutstandingTDG Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M 40M 50M
TDG Yearly Total Debt VS Total AssetsTDG Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B 25B

2.2 Solvency

TDG has an Altman-Z score of 1.99. 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 worse Altman-Z score (1.99) than 67.19% of its industry peers.
The Debt to FCF ratio of TDG is 13.23, which is on the high side as it means it would take TDG, 13.23 years of fcf income to pay off all of its debts.
TDG has a Debt to FCF ratio (13.23) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 13.23
Altman-Z 1.99
ROIC/WACC1.45
WACC9.76%
TDG Yearly LT Debt VS Equity VS FCFTDG Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10B 20B

2.3 Liquidity

A Current Ratio of 1.58 indicates that TDG should not have too much problems paying its short term obligations.
With a Current ratio value of 1.58, TDG is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
TDG has a Quick Ratio of 1.29. This is a normal value and indicates that TDG is financially healthy and should not expect problems in meeting its short term obligations.
TDG has a Quick ratio (1.29) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 1.58
Quick Ratio 1.29
TDG Yearly Current Assets VS Current LiabilitesTDG Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

7

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 31.50% over the past year.
TDG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.77% yearly.
The Revenue has grown by 20.58% in the past year. This is a very strong growth!
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 quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.96% yearly.
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 Y11.58%
EPS Next 2Y13.36%
EPS Next 3Y13.42%
EPS Next 5Y8.96%
Revenue Next Year12.33%
Revenue Next 2Y10.29%
Revenue Next 3Y9.19%
Revenue Next 5Y9.56%

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 stable: in the next years the growth will be about the same than in the last years.
TDG Yearly Revenue VS EstimatesTDG Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2B 4B 6B 8B 10B
TDG Yearly EPS VS EstimatesTDG Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 10 20 30 40 50

3

4. Valuation

4.1 Price/Earnings Ratio

TDG is valuated quite expensively with a Price/Earnings ratio of 39.96.
Based on the Price/Earnings ratio, TDG is valued a bit cheaper than the industry average as 64.06% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.29, TDG is valued a bit more expensive.
TDG is valuated quite expensively with a Price/Forward Earnings ratio of 35.82.
The rest of the industry has a similar Price/Forward Earnings ratio as TDG.
TDG is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 39.96
Fwd PE 35.82
TDG Price Earnings VS Forward Price EarningsTDG Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

TDG's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, TDG is valued a bit cheaper than the industry average as 73.44% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 40.62
EV/EBITDA 23.87
TDG Per share dataTDG EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 100 -100 -200 -300

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.
TDG's earnings are expected to grow with 13.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.45
PEG (5Y)3.13
EPS Next 2Y13.36%
EPS Next 3Y13.42%

5

5. Dividend

5.1 Amount

TDG has a Yearly Dividend Yield of 5.60%, which is a nice return.
Compared to an average industry Dividend Yield of 1.36, TDG pays a better dividend. On top of this TDG pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, TDG pays a better dividend.
Industry RankSector Rank
Dividend Yield 5.6%

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
TDG Yearly Dividends per shareTDG Yearly Dividends per shareYearly Dividends per share 2019 2022 2023 2024 20 40 60

5.3 Sustainability

TDG pays out 137.61% of its income as dividend. This is not a sustainable payout ratio.
The dividend of TDG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP137.61%
EPS Next 2Y13.36%
EPS Next 3Y13.42%
TDG Yearly Income VS Free CF VS DividendTDG Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B 2.5B
TDG Dividend Payout.TDG Dividend Payout, showing the Payout Ratio.TDG Dividend Payout.PayoutRetained Earnings

TRANSDIGM GROUP INC

NYSE:TDG (1/21/2025, 8:04:00 PM)

After market: 1358.01 0 (0%)

1358.01

+17.99 (+1.34%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)11-07 2024-11-07/bmo
Earnings (Next)02-11 2025-02-11/bmo
Inst Owners95.17%
Inst Owner Change-0.16%
Ins Owners0.31%
Ins Owner Change-0.06%
Market Cap76.36B
Analysts80
Price Target1521.75 (12.06%)
Short Float %2.16%
Short Ratio3.81
Dividend
Industry RankSector Rank
Dividend Yield 5.6%
Yearly Dividend36.65
Dividend Growth(5Y)2.56%
DP137.61%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.47%
Min EPS beat(2)4.16%
Max EPS beat(2)4.79%
EPS beat(4)4
Avg EPS beat(4)6.53%
Min EPS beat(4)4.16%
Max EPS beat(4)10.59%
EPS beat(8)8
Avg EPS beat(8)7.41%
EPS beat(12)11
Avg EPS beat(12)5.96%
EPS beat(16)14
Avg EPS beat(16)5.97%
Revenue beat(2)1
Avg Revenue beat(2)0.31%
Min Revenue beat(2)-0.41%
Max Revenue beat(2)1.04%
Revenue beat(4)3
Avg Revenue beat(4)1.76%
Min Revenue beat(4)-0.41%
Max Revenue beat(4)5.36%
Revenue beat(8)6
Avg Revenue beat(8)1.69%
Revenue beat(12)7
Avg Revenue beat(12)0.61%
Revenue beat(16)8
Avg Revenue beat(16)0.08%
PT rev (1m)-0.64%
PT rev (3m)2.86%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-8.36%
EPS NY rev (1m)0%
EPS NY rev (3m)-6.96%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.69%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.33%
Valuation
Industry RankSector Rank
PE 39.96
Fwd PE 35.82
P/S 9.62
P/FCF 40.62
P/OCF 37.34
P/B N/A
P/tB N/A
EV/EBITDA 23.87
EPS(TTM)33.98
EY2.5%
EPS(NY)37.92
Fwd EY2.79%
FCF(TTM)33.43
FCFY2.46%
OCF(TTM)36.37
OCFY2.68%
SpS141.21
BVpS-111.86
TBVpS-358.44
PEG (NY)3.45
PEG (5Y)3.13
Profitability
Industry RankSector Rank
ROA 5.79%
ROE N/A
ROCE 18.94%
ROIC 14.15%
ROICexc 20.72%
ROICexgc N/A
OM 45.92%
PM (TTM) 18.65%
GM 59.74%
FCFM 23.68%
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-Score5
Asset Turnover0.31
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 13.23
Debt/EBITDA 6.26
Cap/Depr 52.88%
Cap/Sales 2.08%
Interest Coverage 3.15
Cash Conversion 51.67%
Profit Quality 126.94%
Current Ratio 1.58
Quick Ratio 1.29
Altman-Z 1.99
F-Score5
WACC9.76%
ROIC/WACC1.45
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)31.5%
EPS 3Y40.97%
EPS 5Y12.77%
EPS Q2Q%22.42%
EPS Next Y11.58%
EPS Next 2Y13.36%
EPS Next 3Y13.42%
EPS Next 5Y8.96%
Revenue 1Y (TTM)20.58%
Revenue growth 3Y18.28%
Revenue growth 5Y8.74%
Sales Q2Q%17.98%
Revenue Next Year12.33%
Revenue Next 2Y10.29%
Revenue Next 3Y9.19%
Revenue Next 5Y9.56%
EBIT growth 1Y23.34%
EBIT growth 3Y27.44%
EBIT growth 5Y11.72%
EBIT Next Year30.62%
EBIT Next 3Y15.62%
EBIT Next 5Y13.06%
FCF growth 1Y52.1%
FCF growth 3Y32.51%
FCF growth 5Y15.52%
OCF growth 1Y48.73%
OCF growth 3Y30.84%
OCF growth 5Y15.03%