Allison Transmission Holdings, Inc. (ALSN) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Allison Transmission Holdings, Inc. (ALSN) Consumer Business Overview

Allison Transmission Holdings, Inc. specializes in designing and manufacturing fully-automatic transmissions for commercial and defense vehicles. With a history dating back to 1915, the company serves a global market through its extensive independent distributor and dealer network, focusing on medium- and heavy-duty applications.

What Is the Investment Thesis for ALSN?

Allison Transmission presents a compelling, albeit potentially volatile, investment case. The company's established position in the commercial and defense transmission market provides a stable revenue base. With a P/E ratio of 20.12 and a profit margin of 14.9%, the company demonstrates profitability. A dividend yield of 0.89% offers a modest return. Growth catalysts include expansion in electric vehicle (EV) transmission technology and increased demand from the defense sector. However, the company faces risks related to economic cycles and competition from other transmission manufacturers. Investors should monitor these factors when evaluating Allison Transmission's long-term potential.

Based on FMP financials and quantitative analysis

ALSN Key Highlights

Market capitalization of $10.6B, reflecting substantial investor confidence in the company's market position.

• P/E ratio of 20.12, indicating a potentially reasonable valuation relative to earnings.
• Profit margin of 14.9%, showcasing the company's ability to generate profit from its revenue.
• Gross margin of 40.8%, demonstrating efficient cost management in production and sales.
• Dividend yield of 0.89%, providing a modest income stream for investors.

Who Are ALSN's Competitors?

ALSN is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are ALSN's Key Strengths?

Strong market position in commercial and defense transmissions.

• Established brand reputation and long history.
• Extensive independent distributor and dealer network.
• High gross margin compared to industry peers.

What Are ALSN's Weaknesses?

Dependence on cyclical industries (commercial vehicles, construction).

• Potential impact from shifts towards electric vehicles.
• Limited diversification beyond transmissions.
• Exposure to fluctuations in raw material prices.

What Could Drive ALSN Stock Higher?

Potential new contracts with the U.S. government for defense vehicle transmissions.

• Expansion of the electric vehicle (EV) transmission product line.
• Increased infrastructure spending in emerging markets driving demand for commercial vehicles.
• Development and launch of new transmission technologies with improved fuel efficiency.

What Are the Key Risks for ALSN?

Insider selling — insiders were net sellers of roughly $4.5M recently.

• Economic downturns affecting commercial vehicle sales and production.
• Increased competition from other transmission manufacturers.
• Technological disruptions in the automotive industry, particularly the shift towards electric vehicles.
• Fluctuations in raw material prices impacting production costs.
• Changes in government regulations and environmental standards.

What Are the Growth Opportunities for ALSN?

• Expansion in Electric Vehicle (EV) Transmissions: Allison Transmission can capitalize on the growing demand for electric vehicles by developing and marketing advanced EV transmission systems. By investing in research and development, Allison Transmission can gain a competitive edge in this rapidly expanding market. Timeline: Ongoing.
• Increased Demand from the Defense Sector: As global defense spending increases, Allison Transmission can benefit from higher demand for its transmissions in military vehicles. The U.S. defense budget remains substantial, providing a stable revenue stream for defense contractors. By securing new contracts and expanding its product offerings for defense applications, Allison Transmission can drive growth in this sector. Timeline: Ongoing.
• Growth in Emerging Markets: Emerging markets, such as Asia-Pacific and Latin America, present significant growth opportunities for Allison Transmission. As these regions experience economic growth and increased infrastructure development, demand for commercial vehicles and construction equipment is expected to rise. By expanding its distribution network and tailoring its products to meet the specific needs of these markets, Allison Transmission can tap into this growth potential. Timeline: Ongoing.
• Aftermarket Services and Parts: Allison Transmission can drive revenue growth by expanding its aftermarket services and parts business. The installed base of vehicles using Allison transmissions requires ongoing maintenance and repairs, creating a recurring revenue stream. By offering comprehensive service solutions and expanding its parts distribution network, Allison Transmission can capture a larger share of the aftermarket. Timeline: Ongoing.
• Technological Innovation: Investing in research and development to create more efficient and advanced transmission technologies can provide a competitive advantage. Innovations such as improved fuel efficiency, reduced emissions, and enhanced performance can attract new customers and retain existing ones. By staying at the forefront of technological advancements, Allison Transmission can maintain its market leadership. Timeline: Ongoing.

What Are ALSN's Competitive Advantages?

• Established brand reputation and long history in the transmission industry.
• Extensive independent distributor and dealer network providing global reach.
• Strong relationships with original equipment manufacturers (OEMs).
• Significant investment in research and development, leading to technological expertise.

What Does ALSN Do?

Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana. The company designs, manufactures, and sells fully-automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles worldwide. Its transmissions are used in a variety of applications, including on-highway trucks for distribution, refuse, construction, fire, and emergency services, as well as school and transit buses and motor homes. Additionally, Allison Transmission serves the off-highway sector, providing transmissions for energy, mining, and construction vehicles and equipment, as well as wheeled and tracked defense vehicles. The company markets its transmissions under the Allison Transmission brand and remanufactured transmissions under the ReTran brand. Beyond transmissions, Allison Transmission sells branded replacement parts, support equipment, and aluminum die-cast components. It also offers defense kits, engineering services, and extended transmission coverage services to original equipment manufacturers, distributors, and the U.S. government. The company reaches its customers through an independent network of approximately 1,400 independent distributor and dealer locations.

What Products and Services Does ALSN Offer?

• Designs and manufactures fully-automatic transmissions for commercial vehicles.
• Produces transmissions for medium- and heavy-duty trucks.
• Supplies transmissions for U.S. defense vehicles.
• Offers transmissions for on-highway applications like distribution and refuse trucks.
• Provides transmissions for off-highway applications like mining and construction equipment.
• Sells remanufactured transmissions under the ReTran brand.
• Offers branded replacement parts and support equipment.
• Provides engineering services and extended transmission coverage.

How Does ALSN Make Money?

• Sells transmissions directly to original equipment manufacturers (OEMs).
• Generates revenue from aftermarket parts and services.
• Secures contracts with the U.S. government for defense applications.
• Distributes products through an independent network of distributors and dealers.

What Industry Does ALSN Operate In?

Allison Transmission operates within the auto parts industry, which is influenced by trends in commercial vehicle production, defense spending, and technological advancements in transmission systems. The industry is competitive, with companies like Magna International Inc. (MGA) and BorgWarner Inc. (BWA) also vying for market share. The shift towards electric vehicles and hybrid technologies presents both challenges and opportunities for Allison Transmission as it adapts its product offerings to meet evolving market demands. The global automotive industry is expected to see moderate growth, driven by increased demand in emerging markets and replacement of aging vehicle fleets.

Who Are ALSN's Key Customers?

• Original equipment manufacturers (OEMs) of commercial vehicles.
• U.S. government and defense contractors.
• Independent distributors and dealers.
• End-users in various industries, including transportation, construction, and mining.

Company Profile

Allison Transmission Holdings, Inc. operates in the Auto - Parts industry within the Consumer Cyclical sector. It is headquartered in Indianapolis, US. The company is led by CEO David S. Graziosi. ALSN has traded publicly since 2012.

Return on equity for Allison Transmission Holdings, Inc. stands at 29.5%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 6.2%, showing how much profit it generates from its asset base. ALSN trades at a trailing price-to-earnings ratio of 20.12, below the Consumer Cyclical sector average of ~32.70x. Its free cash flow yield is 7.2%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.85 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 5.9%, the inverse of the P/E and a quick read on earnings relative to price.

ALSN Valuation & Market Position

With a $10.6B market cap, Allison Transmission Holdings, Inc. sits in the large-cap segment of the market. Analyst price targets span from $126.00 to $126.00, with a consensus of $126.00. At the current price of $128.03, that implies roughly 2% downside from the consensus target. Relative to its peer group, ALSN's quantitative score of 71/100 is above the peer average of 61/100.

Quarterly Financial Performance: Allison Transmission Holdings, Inc.

Revenue for Allison Transmission Holdings, Inc. came in at $860.0M during Q2 FY2026, a 38.8% contraction versus the preceding quarter. The company recorded net income of $181.0M, with diluted EPS of $2.15. Quarter-over-quarter revenue has been mixed, typical for a large-cap company operating in Consumer Cyclical. Across the four most recent quarters, ALSN averaged $1.57 in diluted EPS.

Allison Transmission Holdings, Inc.'s Piotroski F-Score is 5/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 1.85 places it in the grey zone, a middle ground that warrants monitoring.

Allison Transmission Holdings, Inc. has beaten Wall Street's EPS estimate in 4 of its last 8 reported quarters — more hits than misses. Reported results have landed about 7.2% below estimates on average.

Over the past six months, Allison Transmission Holdings, Inc. insiders filed 88 SEC Form 4 transactions — 27 sales and 61 purchases. On net that is roughly 21K shares disposed (about $4.5M), a signal worth weighing alongside the fundamentals.

ALSN Financials

ALSN Latest News

ALSN Analyst Consensus

ALSN MoonshotScore

ALSN Consumer Cyclical Stock FAQ

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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