TransDigm (TDG) Valuation Check After Q4 Earnings Beat, Analyst Upgrades, and Strong FY26 Outlook

TransDigm Group (TDG) is back in the spotlight after its Q4 earnings, where upbeat fiscal 2026 guidance and analyst upgrades have investors rechecking their assumptions on growth, margins, and valuation.

See our latest analysis for TransDigm Group.

Those upbeat Q4 numbers and the stronger fiscal 2026 outlook seem to be feeding into the story, with a roughly 7 percent 3 month share price return and a powerful 3 year total shareholder return well over 150 percent indicating that momentum is still very much on TransDigm’s side.

If this earnings driven move has you rethinking the aerospace and defense space more broadly, it could be worth scanning aerospace and defense stocks for other names riding similar themes.

With the stock near record highs, analyst targets still implying upside, and valuation screens flagging it as fully priced, investors now face a harder question: is TransDigm genuinely undervalued, or is future growth already baked in?

Most Popular Narrative: 13.8% Undervalued

With TransDigm Group last closing at $1,360.10 against a narrative fair value of $1,577.65, the current setup leans toward upside if the projections land.

Ongoing industry trends toward outsourcing parts manufacturing by major OEMs are creating opportunities for specialized suppliers like TransDigm to capture additional content per aircraft, ultimately boosting long-term revenue growth, EBITDA margins, and free cash flow generation.

Read the complete narrative.

Curious how steady demand, rising margins, and a premium future earnings multiple all fit together. One core assumption drives this upside case. Want to see it.

Result: Fair Value of $1,577.65 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative wobbles if legacy aftermarket demand fades faster than expected, or if TransDigm’s leveraged balance sheet bites harder as rates and costs rise.

Find out about the key risks to this TransDigm Group narrative.

Another Angle on Valuation

While the narrative fair value suggests upside, our multiples based view is more cautious. At 41 times earnings versus a 33.3 times fair ratio, 37.4 times for the industry, and 31.5 times for peers, TransDigm looks richly priced, which raises the risk that expectations are already stretched.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own TransDigm Group Narrative

If this framework does not fully align with your view, or you prefer to dig into the numbers yourself, you can easily build a personalized narrative in just a few minutes, Do it your way.

A great starting point for your TransDigm Group research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Before you move on, scan fresh ideas tailored to different strategies so you are not leaving potential returns on the table.

• Explore potential turnaround stories by reviewing these 3572 penny stocks with strong financials that already show solid financial underpinnings instead of speculative hype.
• Prepare for emerging technology trends by reviewing these 26 AI penny stocks focused on real revenue growth from artificial intelligence, not just buzzwords.
• Strengthen your income strategy by targeting these 15 dividend stocks with yields > 3% that can support cash yields while maintaining quality fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com