Allison Transmission Holdings Inc. Common Stock (ALSN)

FairStock Score: 57/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for a durable business bought at a sensible price. Allison has a specialized position in automatic transmissions for medium- and heavy-duty commercial and defense vehicles. FairStock's computed Lynch category is Cyclical - Auto Parts, since earnings follow the economic cycle. That niche can be valuable, and the numbers show real cash generation: trailing free cash flow of $737.0M and an 8.0% FCF yield, a Piotroski F-score of 8/9, and return on equity of 28.35%. But I must weigh that against a debt-to-equity ratio of 2.12 and an Altman Z-score of 1.28, which suggests the balance sheet is not fortress-like. Return on capital employed is only 8.46%, so much of the equity return may come from leverage. The cycle matters. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $1.6B, net income $181.0M, and diluted EPS $2.15. A year earlier, in fiscal Q2 2025, the quarter ended 2025-06-30, revenue was $814.0M, net income $195.0M, and diluted EPS $2.29. So sales rose but profit fell. For FY2025, revenue was $3.0B, net income $623.0M, and diluted EPS $7.33, down from FY2024 revenue $3.2B, net income $731.0M, and diluted EPS $8.31. Valuation at the 2026-10-13 close of $111.62 is not distressed: P/E 17.66, P/B 4.66, EV/EBITDA 11.95. The Graham Number of $58.35 implies a margin of safety of -91.29%, meaning the price is far above a conservative asset-and-earnings value. FairStock Score 57/100. This is a cyclical, cash-generative but levered business; the price looks full unless profits reaccelerate.

In plain English: Allison Transmission makes automatic transmissions for trucks, buses, and military vehicles. The business generates plenty of cash, and its recent financial statements score well on quality tests. But profits have slipped from earlier highs, sales depend on the economic cycle, and at the recent price the shares look expensive compared with its net assets and conservative value estimate.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer