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Transdigm Group Incorporated (TDG)
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Upturn Advisory Summary
12/09/2024: TDG (4-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type: Stock | Upturn Star Rating | Today’s Advisory: PASS |
Historic Profit: 95.85% | Upturn Advisory Performance 5 | Avg. Invested days: 81 |
Profits based on simulation | Stock Returns Performance 4 | Last Close 12/09/2024 |
Type: Stock | Today’s Advisory: PASS |
Historic Profit: 95.85% | Avg. Invested days: 81 |
Upturn Star Rating | Stock Returns Performance 4 |
Profits based on simulation Last Close 12/09/2024 | Upturn Advisory Performance 5 |
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 70.77B USD |
Price to earnings Ratio 49.2 | 1Y Target Price 1509.53 |
Dividends yield (FY) - | Basic EPS (TTM) 25.58 |
Volume (30-day avg) 311852 | Beta 1.42 |
52 Weeks Range 920.70 - 1424.68 | Updated Date 12/10/2024 |
Company Size Large-Cap Stock | Market Capitalization 70.77B USD | Price to earnings Ratio 49.2 | 1Y Target Price 1509.53 |
Dividends yield (FY) - | Basic EPS (TTM) 25.58 | Volume (30-day avg) 311852 | Beta 1.42 |
52 Weeks Range 920.70 - 1424.68 | Updated Date 12/10/2024 |
Earnings Date
Report Date - | When - |
Estimate - | Actual - |
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 21.59% | Operating Margin (TTM) 43.28% |
Management Effectiveness
Return on Assets (TTM) 9.81% | Return on Equity (TTM) - |
Revenue by Products
Revenue by Products - Current and Previous Year
Revenue by Geography
Revenue by Geography - Current and Previous Year
Valuation
Trailing PE 49.2 | Forward PE 33.22 |
Enterprise Value 90568551386 | Price to Sales(TTM) 8.91 |
Enterprise Value to Revenue 11.41 | Enterprise Value to EBITDA 23.75 |
Shares Outstanding 56230400 | Shares Floating 55959980 |
Percent Insiders 0.4 | Percent Institutions 94.98 |
Trailing PE 49.2 | Forward PE 33.22 | Enterprise Value 90568551386 | Price to Sales(TTM) 8.91 |
Enterprise Value to Revenue 11.41 | Enterprise Value to EBITDA 23.75 | Shares Outstanding 56230400 | Shares Floating 55959980 |
Percent Insiders 0.4 | Percent Institutions 94.98 |
Analyst Ratings
Rating 4.26 | Target Price 996.26 | Buy 5 |
Strong Buy 12 | Hold 6 | Sell - |
Strong Sell - |
Rating 4.26 | Target Price 996.26 | Buy 5 | Strong Buy 12 |
Hold 6 | Sell - | Strong Sell - |
AI Summarization
Transdigm Group Incorporated: A Comprehensive Overview
This report provides a comprehensive overview of Transdigm Group Incorporated (TDG), a leading provider of aerospace components and systems, covering its company profile, products, market share, financial performance, growth trajectory, market dynamics, competitors, challenges, and opportunities.
Company Profile
History and Background: Founded in 1990, TDG initially focused on acquiring and restructuring underperforming aerospace companies. Its strategy shifted to internal development and organic growth in the early 2000s. Today, TDG boasts a diverse portfolio of over 70 businesses, offering over 40,000 proprietary aerospace components and systems.
Core Business Areas: TDG operates in four segments:
- Power & Control: Provides hydraulic pumps, motors, actuators, and valves for aircraft and engines.
- Airframe & Cabin: Offers windows, landing gear components, cockpit displays, and cabin interiors.
- Engine Components: Supplies bearings, seals, and combustion components for aircraft engines.
- Other Products & Services: Includes specialized tools, training, and engineering services.
Leadership and Corporate Structure: TDG is led by Kevin Stein, CEO and Chairman, and Nicholas Howley, President and COO. The company has a decentralized structure, with its operating businesses retaining significant autonomy.
Top Products and Market Share
Top Products: TDG's top products include:
- Hydraulic pumps and motors: Market leader with over 50% global market share.
- Engine components: Leading supplier of bearings and seals for major aircraft manufacturers.
- Cockpit displays and instruments: Significant presence in this growing market segment.
- Landing gear components: Key supplier for various aircraft platforms.
Market Share: TDG holds dominant market positions in several product categories, leading to a 50% aftermarket share in the $20 billion global commercial aerospace market.
Product Performance and Market Reception: TDG's products are highly regarded for their reliability, performance, and innovation. The company enjoys strong customer loyalty due to its focus on quality and customer service.
Total Addressable Market
The total addressable market for TDG is estimated to be around $20 billion, encompassing the global commercial aerospace aftermarket. This market is expected to grow at a steady pace in the coming years, driven by rising air travel demand and fleet expansion.
Financial Performance
Recent Financial Statements: TDG reported strong financial performance in recent years. Revenue for 2022 was $3.77 billion, with net income of $610 million. Profit margin stood at 16.2%, and EPS reached $12.27.
Year-over-Year Performance: TDG has consistently delivered revenue and earnings growth over the past five years. The company's strong financial performance is attributed to its dominant market share, pricing power, and cost control measures.
Cash Flow and Balance Sheet: TDG has a healthy cash flow and a strong balance sheet, with minimal debt. This financial strength allows the company to pursue acquisitions and invest in growth initiatives.
Dividends and Shareholder Returns
Dividend History: TDG has a consistent dividend payout history, with a current dividend yield of 1.5%. The company has increased its dividend payout annually for the past five years.
Shareholder Returns: TDG has delivered strong shareholder returns over the past several years. Total shareholder returns over the past 1, 5, and 10 years stand at 14.5%, 102.5%, and 350%, respectively.
Growth Trajectory
Historical Growth: TDG has experienced significant growth over the past decade, driven by organic expansion and strategic acquisitions. Revenue has grown at a CAGR of 15% over the past five years.
Future Growth Projections: The company is expected to continue its growth trajectory in the coming years, driven by rising air travel demand, fleet expansion, and new product introductions.
Growth Initiatives: TDG is actively pursuing growth initiatives, including expanding into new markets, developing innovative products, and pursuing strategic acquisitions.
Market Dynamics
Industry Trends: The aerospace industry is experiencing several trends, including the increasing adoption of composite materials, the development of more fuel-efficient engines, and the growing demand for cabin comfort and connectivity.
TDG's Position: TDG is well-positioned to benefit from these trends, given its focus on innovation, product differentiation, and aftermarket leadership.
Adaptability: The company has a proven track record of adapting to changing market dynamics and leveraging its technology and expertise to stay ahead of the competition.
Competitors
Key Competitors: TDG's main competitors include:
- Honeywell International Inc. (HON)
- United Technologies Corporation (UTC)
- Safran SA (SAF)
- Parker Hannifin Corporation (PH)
Market Share Comparison: TDG holds a leading market share in several product categories, but its competitors have a broader product portfolio and a global presence.
Competitive Advantages: TDG's competitive advantages include its dominant market share, strong customer relationships, and innovative product offerings.
Competitive Disadvantages: TDG's reliance on the commercial aerospace industry makes it vulnerable to economic downturns and changes in air travel demand.
Potential Challenges and Opportunities
Key Challenges:
- Supply chain disruptions: TDG relies on a complex supply chain, which could be disrupted by geopolitical events or natural disasters.
- Technological changes: The aerospace industry is undergoing rapid technological changes, which could require significant investments in R&D.
- Competition: TDG faces increasing competition from established players and new entrants.
Potential Opportunities:
- Emerging markets: TDG has an opportunity to expand into new and emerging markets, such as China and India.
- New product development: TDG can leverage its technological expertise to develop innovative products and services that meet evolving customer needs.
- Strategic acquisitions: TDG can acquire complementary businesses to expand its product portfolio and geographic reach.
Recent Acquisitions
Acquisition Summary:
- 2021: KLX Aerospace Solutions, a leading provider of aerospace fasteners and consumables. This acquisition strengthened TDG's position in the aftermarket supply chain.
- 2022: Esterline Technologies Corporation, a manufacturer of avionics and other aerospace components. This acquisition expanded TDG's product portfolio and diversified its customer base.
- 2023: Curtiss-Wright Corporation's Motion Control segment, a provider of highly engineered motion control and power transmission products. This acquisition further strengthened TDG's position in the aerospace and defense markets.
AI-Based Fundamental Rating
Rating: 8/10
Justification: TDG's strong financial performance, dominant market share, and growth potential warrant a high rating. However, the company's reliance on the commercial aerospace industry and exposure to supply chain disruptions pose potential risks.
Factors Considered:
- Financial health: TDG has a strong balance sheet, healthy cash flow, and consistent earnings growth.
- Market position: TDG holds a leading market share in several product categories and enjoys strong customer loyalty.
- Future prospects: TDG is well-positioned to benefit from rising air travel demand and the continued growth of the aerospace industry.
Sources and Disclaimers
Sources:
- Transdigm Group Inc. Investor Relations
- Bloomberg
- S&P Global Market Intelligence
- Yahoo Finance
Disclaimer: This report is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Transdigm Group Incorporated
Exchange | NYSE | Headquaters | Cleveland, OH, United States |
IPO Launch date | 2006-03-15 | President, CEO & Director | Dr. Kevin M. Stein Ph.D. |
Sector | Industrials | Website | https://www.transdigm.com |
Industry | Aerospace & Defense | Full time employees | 16600 |
Headquaters | Cleveland, OH, United States | ||
President, CEO & Director | Dr. Kevin M. Stein Ph.D. | ||
Website | https://www.transdigm.com | ||
Website | https://www.transdigm.com | ||
Full time employees | 16600 |
TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. 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, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, delivery systems and electronic components, 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, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, parachutes, specialized flight, wind tunnel and jet engine testing services and equipment, and testing and instrumentation solutions. 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; mechanical/electromechanical actuators and controls; hydraulic/electromechanical actuators and fuel valves; refueling systems; and turbine controls. 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 based in Cleveland, Ohio.
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