TDG · sample dossier
TransDigm Group Incorporated
55/100
OutdatedGenerated Nov 7, 2026 · 11:00 AM UTC · 1 day ago
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EquityTransDigm Group Incorporated · XNYS
Decision context
Recommendation
Balanced between solid Quality (89/100) and constrained Valuation (3/100).
A mixed picture — no strong reason to buy or sell right now.
AlphaDog Fair Value
Executive thesis & key metrics
Executive Investment Thesis
TransDigm Group Incorporated is an aerospace components manufacturer generating a gross margin of 59.8% and net margin of 21.3%, trading at a P/E of 36.31. While revenue grew 22.5% YoY in the latest reported quarter, the verdict is constrained by a rich valuation of 19.03 EV/EBITDA and a stale financial reporting base older than 90 days from the June 27, 2026 quarter. The primary risk centers on balance-sheet stress reflected in an Altman Z-score of 1.87 in the grey zone alongside $1,250 million in incremental debt raised in April 2026.
Key Metrics to Watch
What changed recently
No material changes found in the last 30 days.
Why this rating
Score 55 · Hold
Data through
OutdatedJun 30, 2026
A newer quarter has been reported and is not in these statements.
Quality 89/100 — net margin 21.3%.
Re-evaluate if
- Net margin falls below 17.0% (was 21.3%)
Trim / reconsider if
- ROA falls below 7.7% (was 11.8%)
Think of these dollars as a map of our value estimate for Hold — helpful context, not a reason to override the view.
A Calmer Look · Devil's Advocate
Both sides of the TransDigm Group Incorporated story, next to the Hold above
The consensus 'Hold' verdict treats TransDigm's 59.8% gross margin as an impenetrable moat, ignoring that operating leverage is actively decoupling from underlying earnings quality.
May be overlooked
Severe operational conversion lag, evidenced by latest quarter EPS growth of 10.9% YoY trailing revenue growth of 22.5% YoY (and sequential EPS growth of only 2.1% against 7.9% revenue expansion).
Obscured balance-sheet leverage, marked by an undisclosed Debt/Equity ratio and an Altman Z-score of 1.87 in the grey zone following $1,250 million of incremental debt raised in April 2026.
Debt-financed equity shrinkage, where $800 million of the $1,250 million April 2026 debt raise was directed to buybacks rather than productive capital deployment.
Expectations look stretched
Uncritical extrapolation of the 59.8% gross margin and 21.3% net margin to justify an elevated 19.0 EV/EBITDA and 36.3 P/E multiple.
Anchoring on the 9.9% 1-month technical rebound while ignoring that the stock remains below its 200-day moving average and has delivered a -5.5% 1-year return.
Asymmetric insider behavior, where leadership recorded zero open-market purchases alongside Co-COO Joel Reiss selling 954 shares for $1.08 million on October 15, 2026.
Revenue growth decelerates below the latest quarter YoY rate of 22.5%.
Revenue growth decelerates below the latest quarter YoY rate of 22.5%.
Monitor These Triggers
3 Checkpoints · Next PrintMarket context
Snapshot returns at report publication
1 month
+9.9%
3 months
-2.2%
6 months
-1.5%
1 year
-5.5%
At a Glance
A large company has mixed momentum at growth-style pricing.
Top Holders
As of Jun 30, 2026Financial trajectory
Financial Performance
Go deeper
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