📊 ALSN Key Takeaways
Is Allison Transmission Holdings Inc (ALSN) a Good Investment?
Allison Transmission demonstrates exceptional operational efficiency with a 29.2% operating margin and strong profitability metrics (20.7% net margin, 33.4% ROE) despite a concerning revenue spike that lacks clear fundamental explanation. The company maintains fortress-like liquidity (4.85x current ratio) with substantial free cash flow generation ($661M, 22% FCF margin), providing strategic flexibility. However, the extraordinary 3371.7% revenue growth requires careful verification as it appears anomalous and may reflect acquisition activity, restructuring, or data irregularities that warrant investigation.
Allison Transmission shows strong underlying fundamentals, with high gross, operating, and net margins alongside robust free cash flow generation. The balance sheet is liquid and profitability remains solid, but declining net income/EPS and the extreme reported revenue growth suggest growth quality should be treated cautiously until confirmed by future filings.
Why Buy Allison Transmission Holdings Inc Stock? ALSN Key Strengths
- Exceptional operating margin of 29.2% demonstrates pricing power and operational discipline in the motor vehicle components sector
- Outstanding cash generation with $661M free cash flow and 22% FCF margin, enabling debt reduction and shareholder returns
- Fortress balance sheet with $1.5B cash, 4.85x current ratio, and 4.17x quick ratio providing substantial financial flexibility
- Strong return metrics (33.4% ROE, 10.2% ROA) indicating efficient capital deployment and asset utilization
- Significant insider activity with 23 Form 4 filings suggesting confidence in company direction
- High profitability with 48.6% gross margin, 29.2% operating margin, and 20.7% net margin
- Strong cash generation with $836.00M operating cash flow and $661.00M free cash flow
- Healthy liquidity position with $1.50B cash and current ratio of 4.85x
ALSN Stock Risks: Allison Transmission Holdings Inc Investment Risks
- Unexplained 3371.7% revenue increase raises red flags regarding data quality, potential one-time events, or acquisition-driven growth lacking organic foundation
- Despite strong margins, net income declined 14.8% YoY while revenue exploded, suggesting margin compression or integration challenges
- High financial leverage with 1.56x Debt/Equity ratio and $2.9B long-term debt creates vulnerability to economic cycles and working capital pressures
- Missing interest coverage ratio prevents full assessment of debt service capability relative to earnings
- Diluted EPS declined 11.8% YoY despite apparent revenue growth, indicating significant shareholder dilution or earnings quality concerns
- Net income and diluted EPS declined year over year, indicating earnings pressure despite reported revenue growth
- Leverage remains meaningful with $2.91B long-term debt and 1.56x debt-to-equity
- Reported 3371.7% revenue growth appears unusual, raising questions about comparability or growth quality
Key Metrics to Watch
- Organic revenue growth versus reported growth; need to verify if growth is acquisition-driven or operational
- Operating margin sustainability - monitor if 29.2% margin persists or was inflated by unusual items
- Debt reduction trajectory given $2.9B long-term debt burden; track whether strong FCF is prioritizing leverage reduction
- Working capital trends and capital expenditure efficiency to validate cash flow quality
- Year-over-year comparisons in next reporting period to establish true growth trajectory and normalize for potential data anomalies
- Net income and diluted EPS trend
- Free cash flow consistency and debt reduction progress
Allison Transmission Holdings Inc (ALSN) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 22.0% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 4.85x current ratio provides a solid financial cushion.
ALSN Profit Margin, ROE & Profitability Analysis
ALSN vs Automotive Sector: How Allison Transmission Holdings Inc Compares
How Allison Transmission Holdings Inc compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Allison Transmission Holdings Inc Stock Overvalued? ALSN Valuation Analysis 2026
Based on fundamental analysis, Allison Transmission Holdings Inc has mixed fundamental signals relative to the Automotive sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Allison Transmission Holdings Inc Balance Sheet: ALSN Debt, Cash & Liquidity
ALSN Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Allison Transmission Holdings Inc's revenue has grown significantly by 20% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.40 reflects profitable operations.
ALSN Revenue Growth, EPS Growth & YoY Performance
ALSN Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $693.0M | $137.0M | $1.63 |
| Q2 2025 | $814.0M | $187.0M | $2.13 |
| Q1 2025 | $766.0M | $169.0M | $1.90 |
| Q3 2024 | $736.0M | $158.0M | $1.76 |
| Q2 2024 | $783.0M | $175.0M | $1.92 |
| Q1 2024 | $741.0M | $169.0M | $1.85 |
| Q3 2023 | $710.0M | $139.0M | $1.45 |
| Q2 2023 | $664.0M | $122.0M | $1.26 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Allison Transmission Holdings Inc Dividends, Buybacks & Capital Allocation
ALSN SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Allison Transmission Holdings Inc (CIK: 0001411207)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ALSN
What is the AI rating for ALSN?
Allison Transmission Holdings Inc (ALSN) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 72% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ALSN's key strengths?
Claude: Exceptional operating margin of 29.2% demonstrates pricing power and operational discipline in the motor vehicle components sector. Outstanding cash generation with $661M free cash flow and 22% FCF margin, enabling debt reduction and shareholder returns. ChatGPT: High profitability with 48.6% gross margin, 29.2% operating margin, and 20.7% net margin. Strong cash generation with $836.00M operating cash flow and $661.00M free cash flow.
What are the risks of investing in ALSN?
Claude: Unexplained 3371.7% revenue increase raises red flags regarding data quality, potential one-time events, or acquisition-driven growth lacking organic foundation. Despite strong margins, net income declined 14.8% YoY while revenue exploded, suggesting margin compression or integration challenges. ChatGPT: Net income and diluted EPS declined year over year, indicating earnings pressure despite reported revenue growth. Leverage remains meaningful with $2.91B long-term debt and 1.56x debt-to-equity.
What is ALSN's revenue and growth?
Allison Transmission Holdings Inc reported revenue of $3.0B.
Does ALSN pay dividends?
Allison Transmission Holdings Inc pays dividends, with $91.0M distributed to shareholders in the trailing twelve months.
Where can I find ALSN SEC filings?
Official SEC filings for Allison Transmission Holdings Inc (CIK: 0001411207) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ALSN's EPS?
Allison Transmission Holdings Inc has a diluted EPS of $7.33.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ALSN a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Allison Transmission Holdings Inc has a BUY rating with 72% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ALSN stock overvalued or undervalued?
Valuation metrics for ALSN: ROE of 33.4% (sector avg: 12%), net margin of 20.7% (sector avg: 6%). Higher ROE suggests strong returns relative to peers.
Should I buy ALSN stock in 2026?
Our dual AI analysis gives Allison Transmission Holdings Inc a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ALSN's free cash flow?
Allison Transmission Holdings Inc's operating cash flow is $836.0M, with capital expenditures of $175.0M. FCF margin is 22.0%.
How does ALSN compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 20.7% (avg: 6%), ROE 33.4% (avg: 12%), current ratio 4.85 (avg: 1.2).
Is Allison Transmission Holdings Inc carrying too much debt?
ALSN has a debt-to-equity ratio of 1.56x, which is above the Automotive sector average of 1x. However, the current ratio of 4.85 suggests adequate short-term liquidity.
Why is ALSN's return on equity (ROE) so high?
Allison Transmission Holdings Inc has a return on equity of 33.4%, significantly above the Automotive sector average of 12%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 20.7% net margin.