NYSE:ALSN

Stock Analysis Report

Allison Transmission Holdings

Executive Summary

Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical U.S.

Snowflake

Fair value with mediocre balance sheet.


Similar Companies

Share Price & News

How has Allison Transmission Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ALSN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

ALSN

-0.9%

US Machinery

0.5%

US Market


1 Year Return

-4.6%

ALSN

15.6%

US Machinery

16.1%

US Market

Return vs Industry: ALSN underperformed the US Machinery industry which returned 15.6% over the past year.

Return vs Market: ALSN underperformed the US Market which returned 16.1% over the past year.


Shareholder returns

ALSNIndustryMarket
7 Day-2.4%-0.9%0.5%
30 Day-1.6%4.3%3.9%
90 Day5.8%13.7%6.6%
1 Year-3.4%-4.6%17.8%15.6%18.7%16.1%
3 Year45.9%39.8%40.8%31.9%47.2%37.7%
5 Year45.3%33.5%56.7%37.7%61.5%43.7%

Price Volatility Vs. Market

How volatile is Allison Transmission Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Allison Transmission Holdings undervalued compared to its fair value and its price relative to the market?

18.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ALSN ($45.44) is trading below our estimate of fair value ($56.05)

Significantly Below Fair Value: ALSN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ALSN is good value based on its PE Ratio (8.7x) compared to the Machinery industry average (22.3x).

PE vs Market: ALSN is good value based on its PE Ratio (8.7x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: ALSN's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ALSN is overvalued based on its PB Ratio (7.3x) compared to the US Machinery industry average (2.3x).


Next Steps

Future Growth

How is Allison Transmission Holdings forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

-9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ALSN's earnings are forecast to decline over the next 3 years (-9.1% per year).

Earnings vs Market: ALSN's earnings are forecast to decline over the next 3 years (-9.1% per year).

High Growth Earnings: ALSN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ALSN's revenue is expected to decline over the next 3 years (-2.9% per year).

High Growth Revenue: ALSN's revenue is forecast to decline over the next 3 years (-2.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ALSN's Return on Equity is forecast to be very high in 3 years time (61.9%).


Next Steps

Past Performance

How has Allison Transmission Holdings performed over the past 5 years?

30.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ALSN has high quality earnings.

Growing Profit Margin: ALSN's current net profit margins (23.6%) are lower than last year (26.6%).


Past Earnings Growth Analysis

Earnings Trend: ALSN's earnings have grown significantly by 30.9% per year over the past 5 years.

Accelerating Growth: ALSN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ALSN had negative earnings growth (-8.9%) over the past year, making it difficult to compare to the Machinery industry average (13.5%).


Return on Equity

High ROE: Whilst ALSN's Return on Equity (86.68%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Allison Transmission Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: ALSN's short term assets ($748.0M) exceeds its short term liabilities ($477.0M)

Long Term Liabilities: ALSN's short term assets ($748.0M) do not cover its long term liabilities (3.3B)


Debt to Equity History and Analysis

Debt Level: ALSN's debt to equity ratio (344.5%) is considered high.

Reducing Debt: ALSN's debt to equity ratio has increased from 191.7% to 344.5% over the past 5 years.

Debt Coverage: ALSN's debt is well covered by operating cash flow (34.3%).

Interest Coverage: ALSN's interest payments on its debt are well covered by EBIT (7.5x coverage).


Balance Sheet

Inventory Level: ALSN has a low level of unsold assets or inventory.

Debt Coverage by Assets: ALSN's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Allison Transmission Holdings's current dividend yield, its reliability and sustainability?

1.32%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: ALSN's dividend (1.32%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: ALSN's dividend (1.32%) is low compared to the top 25% of dividend payers in the US market (3.65%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ALSN has been paying a dividend for less than 10 years.

Growing Dividend: ALSN's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (11.6%), ALSN's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ALSN's dividends in 3 years are forecast to be thoroughly covered by earnings (9.6% payout ratio).


Next Steps

Management

What is the CEO of Allison Transmission Holdings's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Dave Graziosi (53yo)

1.4yrs

Tenure

US$16,905,055

Compensation

Mr. David S. Graziosi, also known as Dave, has been Chief Executive Officer of Allison Transmission Holdings, Inc. since June 1, 2018. Mr. Graziosi has been President of Allison Transmission Holdings, Inc. ...


CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD16.91M) is above average for companies of similar size in the US market ($USD6.79M).

Compensation vs Earnings: Dave's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

4.3yrs

Average Tenure

54.5yo

Average Age

Experienced Management: ALSN's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

65yo

Average Age

Experienced Board: ALSN's board of directors are considered experienced (3.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$232,427,90810 May 19
Ashe Capital Management, LP
EntityCompany
Shares4,977,043
Max PriceUS$46.70
SellUS$3,531,00804 May 19
Ashe Capital Management, LP
EntityCompany
Shares75,000
Max PriceUS$47.08
BuyUS$229,99530 Apr 19
G. Bohley
EntityIndividual
Role
Chief Financial Officer
VP, CFO & Treasurer
Shares5,000
Max PriceUS$46.00

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dave Graziosi (53yo)

    President

    • Tenure: 1.4yrs
    • Compensation: US$16.91m
  • Randy Kirk (63yo)

    Senior Vice President of Product Engineering & Product Teams

    • Tenure: 5.3yrs
    • Compensation: US$2.00m
  • Eric Scroggins (48yo)

    VP, General Counsel & Secretary

    • Tenure: 11.9yrs
  • Mike Dick (57yo)

    Senior Vice President of Operations & Purchasing

    • Tenure: 3.8yrs
    • Compensation: US$2.11m
  • Fred Bohley (50yo)

    VP, CFO & Treasurer

    • Tenure: 1.4yrs
    • Compensation: US$2.05m
  • Dean Ranalli

    Chief Information Officer & VPof Information Systems & Services

    • Tenure: 6.3yrs
  • Mary Hoffman

    Vice President of Human Resources

    • Tenure: 4.8yrs
  • John Coll (56yo)

    Senior Vice President of Global Marketing

    • Tenure: 3.1yrs
    • Compensation: US$2.08m
  • Melissa Sauer

    Executive Director of Corporate Affairs & Communications

    • Tenure: 0yrs
  • Raymond Posadas

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Alvaro Garcia-Tunon (67yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: US$214.96k
  • Dave Graziosi (53yo)

    President

    • Tenure: 1.4yrs
    • Compensation: US$16.91m
  • Tom Rabaut (71yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$229.96k
  • Richard Lavin (67yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: US$204.96k
  • Stan Askren (58yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: US$202.46k
  • Dave Everitt (67yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: US$199.96k
  • Richard Reynolds (70yo)

    Independent Director

    • Tenure: 9yrs
    • Compensation: US$219.96k
  • Larry Dewey (63yo)

    Chairman of the Board

    • Tenure: 12.3yrs
    • Compensation: US$2.23m
  • Judy Altmaier (58yo)

    Independent Director

    • Tenure: 0.8yrs
  • Carolann Haznedar (59yo)

    Independent Director

    • Tenure: 1yrs
    • Compensation: US$81.21k

Company Information

Allison Transmission Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Allison Transmission Holdings, Inc.
  • Ticker: ALSN
  • Exchange: NYSE
  • Founded: 1915
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: US$5.418b
  • Shares outstanding: 119.23m
  • Website: https://www.allisontransmission.com

Number of Employees


Location

  • Allison Transmission Holdings, Inc.
  • One Allison Way
  • Indianapolis
  • Indiana
  • 46222
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ALSNNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2012
1A7DB (Deutsche Boerse AG)YesCommon StockDEEURMar 2012

Biography

Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium- and heavy-duty commercial vehicles, an ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/21 00:18
End of Day Share Price2019/11/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.