📊 TDG Key Takeaways
Is TransDigm Group INC (TDG) a Good Investment?
TransDigm demonstrates exceptional operating profitability (46% operating margin, 20.3% net margin) with strong free cash flow generation ($836M), but carries a dangerously leveraged balance sheet with negative $9.4B stockholders' equity and $31.3B debt. The 661.8% revenue spike appears acquisition-driven, while flat net income growth raises integration concerns.
TransDigm shows exceptional underlying profitability, with very high gross and operating margins and strong free cash flow conversion. Its business appears fundamentally resilient, but the capital structure is aggressive: liabilities materially exceed assets, long-term debt is very high, and negative equity limits balance-sheet flexibility. The fundamentals support a quality operating business, but leverage and the lack of clear earnings growth temper the overall view.
TransDigm Group INC Key Strengths (TDG)
- Exceptional profitability margins (46% operating margin, 20.3% net margin)
- Strong positive free cash flow of $836M despite high debt burden
- Excellent liquidity ratios (3.52x current, 2.53x quick) providing operational flexibility
- Operating cash flow of $967M demonstrates underlying business strength and cash generation capability
- Very high profitability, including 59.2% gross margin and 45.6% operating margin
- Strong cash generation, with $772.00M of free cash flow and a 33.8% FCF margin
- Solid near-term liquidity, with $2.53B cash and a 2.75x current ratio
TDG Stock Risks: TransDigm Group INC Investment Risks
- Negative shareholders' equity of -$9.4B indicates balance sheet insolvency on book value basis
- Extreme leverage with $31.3B long-term debt creates refinancing and covenant risk
- Net income flat YoY despite 661.8% revenue growth suggests acquisition integration costs or margin dilution
- Inability to calculate meaningful debt/equity or ROE ratios due to negative equity structure
- Extremely high leverage, including $29.32B of long-term debt
- Negative stockholders equity indicates a highly aggressive balance-sheet structure
- Net income was flat YoY despite massive reported revenue growth, raising questions about growth quality and expense burden
Key Metrics to Watch
- Free cash flow stability and ability to service $31.3B debt obligation
- Operating margin sustainability post-acquisition integration
- Net income growth trajectory and operating leverage realization
- Changes in leverage ratio and debt/operating cash flow coverage
- Debt reduction and interest coverage trend
- Net income and operating cash flow growth relative to revenue growth
TransDigm Group INC (TDG) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 3.52x current ratio provides a solid financial cushion.
TDG Profit Margin, ROE & Profitability Analysis
TDG vs Automotive Sector: How TransDigm Group INC Compares
How TransDigm Group INC compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is TransDigm Group INC Stock Overvalued? TDG Valuation Analysis 2026
Based on fundamental analysis, TransDigm Group 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.
TransDigm Group INC Balance Sheet: TDG Debt, Cash & Liquidity
TDG Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: TransDigm Group INC's revenue has grown significantly by 56% over the 5-year period, indicating strong business expansion. The most recent EPS of $22.03 reflects profitable operations.
TDG Revenue Growth, EPS Growth & YoY Performance
TDG Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $2.2B | $445.0M | $8.24 |
| Q1 2026 | $2.0B | $445.0M | $6.62 |
| Q3 2025 | $2.0B | $382.0M | $7.96 |
| Q2 2025 | $1.9B | $382.0M | $6.97 |
| Q1 2025 | $1.8B | $382.0M | $4.87 |
| Q3 2024 | $1.7B | $228.0M | $6.14 |
| Q2 2024 | $1.6B | $228.0M | $5.32 |
| Q1 2024 | $1.4B | $228.0M | $3.33 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
TransDigm Group INC Dividends, Buybacks & Capital Allocation
TDG SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for TransDigm Group INC (CIK: 0001260221)
📋 Recent SEC Filings
❓ Frequently Asked Questions about TDG
What is the AI rating for TDG?
TransDigm Group INC (TDG) has a Combined AI Grade of B from Claude (B) and ChatGPT (B) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are TDG's key strengths?
Claude: Exceptional profitability margins (46% operating margin, 20.3% net margin). Strong positive free cash flow of $836M despite high debt burden. ChatGPT: Very high profitability, including 59.2% gross margin and 45.6% operating margin. Strong cash generation, with $772.00M of free cash flow and a 33.8% FCF margin.
What are the risks of investing in TDG?
Claude: Negative shareholders' equity of -$9.4B indicates balance sheet insolvency on book value basis. Extreme leverage with $31.3B long-term debt creates refinancing and covenant risk. ChatGPT: Extremely high leverage, including $29.32B of long-term debt. Negative stockholders equity indicates a highly aggressive balance-sheet structure.
What is TDG's revenue and growth?
TransDigm Group INC reported revenue of $4.8B.
Does TDG pay dividends?
TransDigm Group INC pays dividends, with $59.0M distributed to shareholders in the trailing twelve months.
Where can I find TDG SEC filings?
Official SEC filings for TransDigm Group INC (CIK: 0001260221) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is TDG's EPS?
TransDigm Group INC has a diluted EPS of $15.82.
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 grade reflects both perspectives for balanced insights.
What is TDG's fundamental grade?
Based on our AI fundamental analysis in June 2026, TransDigm Group INC has a B grade with 70% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is TDG stock overvalued or undervalued?
Valuation metrics for TDG: ROE of N/A (sector avg: 12%), net margin of 20.3% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
What is TDG's AI grade for 2026?
Our dual AI analysis gives TransDigm Group INC a combined B grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is TDG's free cash flow?
TransDigm Group INC's operating cash flow is $967.0M, with capital expenditures of $131.0M. FCF margin is 17.3%.
How does TDG compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 20.3% (avg: 6%), ROE N/A (avg: 12%), current ratio 3.52 (avg: 1.2).