NYSE:TDG

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Reasonable 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


Market Performance


7 Day Return

0.3%

TDG

-1.5%

US Aerospace & Defense

0.5%

US Market


1 Year Return

56.2%

TDG

7.2%

US Aerospace & Defense

6.8%

US Market

Return vs Industry: TDG exceeded the US Aerospace & Defense industry which returned 7.2% over the past year.

Return vs Market: TDG exceeded the US Market which returned 6.8% over the past year.


Shareholder returns

TDGIndustryMarket
7 Day0.3%-1.5%0.5%
30 Day-0.1%-2.8%-0.8%
90 Day8.7%2.1%-0.9%
1 Year65.4%56.2%9.3%7.2%9.2%6.8%
3 Year130.5%100.3%59.7%51.0%45.6%36.2%
5 Year262.2%188.0%92.1%74.0%63.2%45.4%

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?

2.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TDG ($526.57) is trading below our estimate of fair value ($541.99)

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


Price To Earnings Ratio

PE vs Industry: TDG is poor value based on its PE Ratio (39.4x) compared to the Aerospace & Defense industry average (22.4x).

PE vs Market: TDG is poor value based on its PE Ratio (39.4x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: TDG is poor value based on its PEG Ratio (1.6x)


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 16 analysts?

24.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TDG's forecast earnings growth (24.9% per year) is above the savings rate (2.7%).

Earnings vs Market: TDG's earnings (24.9% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TDG's revenue (8.6% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: TDG's revenue (8.6% 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?

26.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TDG's earnings have grown significantly by 26.4% 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 (-5.9%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (10.5%).


Return on Equity

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


Return on Assets

ROA vs Industry: TDG has a higher Return on Assets than the Aerospace & Defense industry average last year.


Return on Capital Employed

ROCE Improving: TDG's Return on Capital Employed has declined over the past 3 years.


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 (6.5%).

Interest Coverage: TDG's interest payments on its debt are not well covered by EBIT (2.5x 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%industryaverage1.8%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

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.

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?

1.5yrs

Average management tenure


CEO

Kevin Stein (53yo)

1.5yrs

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

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

1.5yrs

Average Tenure

53yo

Average Age

Experienced Management: TDG's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

9.0yrs

Average Tenure

63yo

Average Age

Experienced Board: TDG's board of directors are considered experienced (9 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

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


Management Team

  • Nick Howley (67yo)

    Executive Chairman

    • Tenure: 16.3yrs
    • Compensation: US$13.13m
  • Kevin Stein (53yo)

    President

    • Tenure: 1.5yrs
    • Compensation: US$23.47m
  • Bernie Iversen (62yo)

    Executive Vice President of Mergers & Acquisitions and Business Development

    • Tenure: 7.4yrs
    • Compensation: US$14.06m
  • Mike Lisman (35yo)

    Chief Financial Officer

    • Tenure: 1.3yrs
    • Compensation: US$2.33m
  • Jorge Valladares (45yo)

    Chief Operating Officer

    • Tenure: 0.5yrs
    • Compensation: US$6.76m
  • Peter Palmer (55yo)

    Executive Vice President

    • Tenure: 7.7yrs
    • Compensation: US$2.12m
  • Jim Skulina (60yo)

    Executive Vice President

    • Tenure: 1.8yrs
    • Compensation: US$7.49m
  • Halle Terrion (51yo)

    General Counsel

    • Tenure: 0yrs
  • Liza Sabol

    Director of Investor Relations

    • Tenure: 0yrs
  • Sarah Wynne (45yo)

    Chief Accounting Officer

    • Tenure: 0.9yrs

Board Members

  • David Barr (56yo)

    Independent Director

    • Tenure: 2yrs
    • Compensation: US$60.00k
  • Rob Small (52yo)

    Independent Director

    • Tenure: 9.6yrs
    • Compensation: US$157.05k
  • Bill Dries (67yo)

    Independent Director

    • Tenure: 8.5yrs
    • Compensation: US$157.05k
  • Sean Hennessy (61yo)

    Independent Director

    • Tenure: 13.5yrs
    • Compensation: US$172.05k
  • Nick Howley (67yo)

    Executive Chairman

    • Tenure: 16.3yrs
    • Compensation: US$13.13m
  • Merv Dunn (65yo)

    Independent Director

    • Tenure: 12.1yrs
    • Compensation: US$162.05k
  • Ray Laubenthal (58yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$60.00k
  • John Staer (68yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$157.05k
  • Kevin Stein (53yo)

    President

    • Tenure: 1.5yrs
    • Compensation: US$23.47m
  • Michael Graff (67yo)

    Independent Director

    • Tenure: 16.3yrs
    • 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$28.106b
  • Shares outstanding: 53.37m
  • 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
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 in three segments: Power & Control, Airframe, and Non-aviatio ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 23:56
End of Day Share Price2019/10/18 00:00
Earnings2019/06/29
Annual Earnings2018/09/30


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.