NYSE:TDG

Stock Analysis Report

Executive Summary

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally.


Snowflake Analysis

Moderate growth potential with questionable track record.


Similar Companies

Share Price & News

How has TransDigm Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.7%

TDG

1.7%

US Aerospace & Defense

0.8%

US Market


1 Year Return

84.7%

TDG

38.8%

US Aerospace & Defense

25.1%

US Market

Return vs Industry: TDG exceeded the US Aerospace & Defense industry which returned 37.9% over the past year.

Return vs Market: TDG exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

TDGIndustryMarket
7 Day1.7%1.7%0.8%
30 Day8.7%6.1%3.1%
90 Day23.0%10.2%10.9%
1 Year106.8%84.7%41.4%38.8%27.7%25.1%
3 Year256.3%192.9%59.6%51.1%51.3%41.6%
5 Year315.4%212.3%101.8%82.6%77.2%57.6%

Price Volatility Vs. Market

How volatile is TransDigm Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TransDigm Group undervalued compared to its fair value and its price relative to the market?

49.75x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TDG ($633.33) is trading above our estimate of fair value ($629.37)

Significantly Below Fair Value: TDG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TDG is poor value based on its PE Ratio (47x) compared to the Aerospace & Defense industry average (20.7x).

PE vs Market: TDG is poor value based on its PE Ratio (47x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TDG is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: TDG has negative assets, so we can't compare its PB Ratio to the US Aerospace & Defense industry average.


Next Steps

Future Growth

How is TransDigm Group forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

19.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TDG's forecast earnings growth (23.1% per year) is above the savings rate (1.7%).

Earnings vs Market: TDG's earnings (23.1% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: TDG's earnings are forecast to grow, but not significantly.

Revenue vs Market: TDG's revenue (8.4% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: TDG's revenue (8.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TDG's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has TransDigm Group performed over the past 5 years?

21.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TDG has high quality earnings.

Growing Profit Margin: TDG's current net profit margins (13.9%) are lower than last year (23.8%).


Past Earnings Growth Analysis

Earnings Trend: TDG's earnings have grown significantly by 21.9% per year over the past 5 years.

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

Earnings vs Industry: TDG had negative earnings growth (-19.6%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (13.9%).


Return on Equity

High ROE: TDG's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is TransDigm Group's financial position?


Financial Position Analysis

Short Term Liabilities: TDG has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: TDG has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: TDG has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: TDG's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: TDG's debt is not well covered by operating cash flow (6%).

Interest Coverage: TDG's interest payments on its debt are not well covered by EBIT (2.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: TDG has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is TransDigm Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate TDG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TDG's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TDG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TDG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TDG's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of TransDigm Group's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Kevin Stein (53yo)

1.8yrs

Tenure

US$23,471,608

Compensation

Dr. Kevin M. Stein, Ph.D., has been President and Chief Executive Officer of TransDigm Group Incorporated since 2016 and April 25, 2018 respectively. Prior to that, Dr. Stein served as President and Chief  ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD23.47M) is above average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

1.8yrs

Average Tenure

52yo

Average Age

Experienced Management: TDG's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

9.3yrs

Average Tenure

63yo

Average Age

Experienced Board: TDG's board of directors are considered experienced (9.3 years average tenure).


Insider Trading

Insider Buying: TDG insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$298,64912 Dec 19
Halle Terrion
EntityIndividual
Role
Chief Compliance Officer
General Counsel
Shares523
Max PriceUS$571.03
BuyUS$4,31912 Mar 19
Sarah Wynne
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares10
Max PriceUS$431.94
SellUS$3,866,27001 Mar 19
Mervin Dunn
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares8,944
Max PriceUS$432.28
SellUS$2,176,34325 Feb 19
Mervin Dunn
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$435.27
SellUS$2,004,78022 Feb 19
Mervin Dunn
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,600
Max PriceUS$435.82
SellUS$77,23412 Feb 19
Michael Graff
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares182
Max PriceUS$424.36

Ownership Breakdown

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


Management Team

  • Nick Howley (67yo)

    Executive Chairman of the Board

    • Tenure: 16.5yrs
    • Compensation: US$13.13m
  • Kevin Stein (53yo)

    President

    • Tenure: 1.8yrs
    • Compensation: US$23.47m
  • Bernie Iversen (62yo)

    Executive Vice President of Mergers & Acquisitions and Business Development

    • Tenure: 7.7yrs
    • Compensation: US$14.06m
  • Mike Lisman (37yo)

    Chief Financial Officer

    • Tenure: 1.5yrs
    • Compensation: US$2.33m
  • Jorge Valladares (45yo)

    Chief Operating Officer

    • Tenure: 0.8yrs
    • Compensation: US$6.76m
  • Peter Palmer (55yo)

    Executive Vice President

    • Tenure: 7.9yrs
    • Compensation: US$2.12m
  • Jim Skulina (60yo)

    Executive Vice President

    • Tenure: 2yrs
    • Compensation: US$7.49m
  • Halle Terrion (51yo)

    General Counsel

    • Liza Sabol (41yo)

      Director of Investor Relations

      • Sarah Wynne (45yo)

        Chief Accounting Officer

        • Tenure: 1.2yrs

      Board Members

      • David Barr (56yo)

        Independent Director

        • Tenure: 2.3yrs
        • Compensation: US$60.00k
      • Rob Small (52yo)

        Independent Director

        • Tenure: 9.8yrs
        • Compensation: US$157.05k
      • Bill Dries (67yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$157.05k
      • Sean Hennessy (61yo)

        Independent Director

        • Tenure: 13.8yrs
        • Compensation: US$172.05k
      • Nick Howley (67yo)

        Executive Chairman of the Board

        • Tenure: 16.5yrs
        • Compensation: US$13.13m
      • Merv Dunn (65yo)

        Independent Director

        • Tenure: 12.3yrs
        • Compensation: US$162.05k
      • Ray Laubenthal (58yo)

        Independent Director

        • Tenure: 5yrs
        • Compensation: US$60.00k
      • John Staer (68yo)

        Independent Director

        • Tenure: 8yrs
        • Compensation: US$157.05k
      • Kevin Stein (53yo)

        President

        • Tenure: 1.8yrs
        • Compensation: US$23.47m
      • Michael Graff (67yo)

        Independent Director

        • Tenure: 16.5yrs
        • Compensation: US$162.05k

      Company Information

      TransDigm Group Incorporated's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: TransDigm Group Incorporated
      • Ticker: TDG
      • Exchange: NYSE
      • Founded: 1993
      • Industry: Aerospace and Defense
      • Sector: Capital Goods
      • Market Cap: US$34.486b
      • Shares outstanding: 53.55m
      • Website: https://www.transdigm.com

      Number of Employees


      Location

      • TransDigm Group Incorporated
      • The Tower at Erieview
      • Suite 3000
      • Cleveland
      • Ohio
      • 44114
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      TDGNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2006
      T7DDB (Deutsche Boerse AG)YesCommon StockDEEURMar 2006
      TDGSWX (SIX Swiss Exchange)YesCommon StockCHCHFMar 2006
      0REKLSE (London Stock Exchange)YesCommon StockGBUSDMar 2006
      TDG *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMar 2006

      Biography

      TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The company operates through three segments: Power & Control, Airframe, and Non-aviation. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, thermal protection products, lighting and control technology, military personnel parachutes, and cargo delivery systems. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications, mechanical/electro-mechanical actuators and controls for space applications, and refueling systems for heavy equipment, as well as hydraulic/electromechanical actuators and fuel valves for land based gas turbines. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is headquartered in Cleveland, Ohio. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/23 00:06
      End of Day Share Price2020/01/22 00:00
      Earnings2019/09/30
      Annual Earnings2019/09/30


      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.