📊 TDG Key Takeaways
Is TransDigm Group INC (TDG) a Good Investment?
TransDigm demonstrates exceptional operational profitability with 45.6% operating margins and strong free cash flow generation of $772M, but this is severely constrained by extreme leverage with $29.3B debt against negative $9.3B equity. The 661.8% revenue surge and flat net income growth suggest integration challenges or one-time gains, requiring clarification on earnings quality before confident recommendation.
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.
Why Buy TransDigm Group INC Stock? TDG Key Strengths
- Exceptional operating margins at 45.6% indicate strong pricing power and operational efficiency in aerospace components
- Robust free cash flow of $772M (33.8% FCF margin) demonstrates ability to service debt despite capital structure concerns
- Solid liquidity position with 2.75x current ratio and 1.81x quick ratio providing near-term financial flexibility
- Strong revenue growth of 661.8% YoY suggests significant demand recovery or major acquisition integration
- 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 stockholders equity of -$9.3B with $29.3B long-term debt creates extreme financial distress risk and technical insolvency from accounting perspective
- Disconnect between 661.8% revenue growth and flat net income (+0.0% YoY) raises serious questions about earnings quality, acquisition integration costs, or non-recurring items
- Unable to calculate meaningful ROE and debt-to-equity ratios due to negative equity, indicating balance sheet is severely impaired
- High debt burden relative to operating cash flow may constrain strategic flexibility and create refinancing risk if credit conditions deteriorate
- 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
- Trend in operating margins and whether 45.6% level is sustainable or inflated by one-time items
- Reconciliation of massive revenue growth with flat net income - understand composition of $2.3B revenue
- Path to positive equity and debt reduction trajectory given $772M annual free cash flow generation
- Interest coverage ratio once stabilized, and refinancing schedule for $29.3B debt position
- 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
The 33.8% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 2.75x 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 |
|---|---|---|---|
| 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 |
| Q3 2023 | $1.4B | $163.0M | $4.10 |
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 Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 69% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are TDG's key strengths?
Claude: Exceptional operating margins at 45.6% indicate strong pricing power and operational efficiency in aerospace components. Robust free cash flow of $772M (33.8% FCF margin) demonstrates ability to service debt despite capital structure concerns. 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 stockholders equity of -$9.3B with $29.3B long-term debt creates extreme financial distress risk and technical insolvency from accounting perspective. Disconnect between 661.8% revenue growth and flat net income (+0.0% YoY) raises serious questions about earnings quality, acquisition integration costs, or non-recurring items. 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 $2.3B.
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 $6.62.
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 TDG a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, TransDigm Group INC has a HOLD rating with 69% confidence. Review the strengths and risks sections above before making a decision. 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 19.5% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
Should I buy TDG stock in 2026?
Our dual AI analysis gives TransDigm Group INC a combined HOLD rating 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 $832.0M, with capital expenditures of $60.0M. FCF margin is 33.8%.
How does TDG compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 19.5% (avg: 6%), ROE N/A (avg: 12%), current ratio 2.75 (avg: 1.2).