TransDigm Group Inc (TDG) stock analysis
TransDigm Group Inc (TDG) clears 3 of this site's 8 mechanical value filters, 4 of 8 Buffett-style checks and 1 of 5 Lynch-style checks. At $1141.74 it trades 87.7% above this site's neutral DCF value (a margin of safety of -87.7%). Its earnings quality rates Strong and it returns +16.2% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does TransDigm Group do?
TransDigm Group makes proprietary aircraft parts, often the only approved supplier, and sells to aerospace makers and airlines.
What stands out about TransDigm Group?
- The share price implies 24.2% yearly growth. At $1141.74, TDG's free cash flow of $35.62 per share would have to grow 24.2% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- Misses 3 of the 8 value filters. It fails Trailing P/E < 25 (29.02), PEG Ratio < 1.5 (3.61) and Price/Book < 8 (77.05); the other 3 pass and 2 were not evaluated. See every filter.
- Close to its 52-week low. At $1141.74, TDG is 6.1% above its low of $1,076.01 and 21.3% below its high of $1,450.00. See the range.
- Strongest against peers: net margin. At 21.3% (peer median 8.2%) it ranks 1st of 12 among aerospace & defense stocks this site tracks. See the ranking.
- Balance sheet in the distress zone. Its Altman Z″-Score is 0.78; below 1.1 is the distress zone, 1.1 to 2.6 the grey zone. See the Altman Z″-Score list.
How has TransDigm Group's share price moved?
The interactive price chart needs JavaScript.
Is TransDigm Group undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -87.7%
- P/E vs. its own history 29.0x · at/below its cheapest point Real range: 38.3x–60.0x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 3.63/5 27 analysts this month: 5 strong buy, 8 buy, 13 hold, 1 sell, 0 strong sell (Finnhub). Down from 3.67 last month.
- Altman Z″-Score (bankruptcy risk) 0.78 · Distress zone
- Earnings quality (is the profit real?) Strong · all 5 checks clean Beneish M-score −2.31 · accruals 0.1% of assets · 107% of profit arrived as cash · stock comp 1.7% of revenue · share count +0.9% a year. From the latest 10-K (year to Sep 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +16.2% net Latest fiscal year (2025): dividends 15.6% + buybacks 0.8% − stock comp 0.2%, as a share of today's market cap. Over 10 years its split-adjusted share count rose 14%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $3.13 per $1 of new profit · FlightSafety-like · but only 23% return on capital Operating profit $1.5B → $3.5B, capital needed $8.7B → $15B, 2016–2025 (3-year averages); return on capital now 23% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 3.61 · Well above fair P/E 29.0× ÷ 8.0% a year of growth behind it. 375th lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 2 of 4 · misses capital-light, price Capital-light growth: not cleared (only 23% return on capital); Profit is real: cleared; Cash to owners: cleared; Fair price (PEG): not cleared (PEG 3.61, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 2 flags
- Standing vs. sector peers 4 of 7 measures above the median Compared with the 11 other aerospace & defense stocks this site tracks: 3 in the top third, 1 in the bottom third.
- Dividend payout sustainability 4/6 flags
How does TransDigm Group compare with its peers?
4 of 7 measures sit above the median of the 11 other aerospace & defense stocks tracked here, 3 in the top third and 1 in the bottom third.
- P/E ratiolower is cheaper · peer median 27.1× 29.0× –7th of 12
- Free-cash-flow yieldhigher is cheaper · peer median 4.9% 3.1% –8th of 12
- Return on equityhigher is better · peer median 22% 37% ✓4th of 12
- Net marginhigher is better · peer median 8.2% 21.3% ✓1st of 12
- Revenue growthhigher is better, year on year · peer median 12.8% 16.6% –5th of 12
- Debt / equitylower is safer · peer median 0.66 5.41 ✕11th of 12
- Dividend yieldamong dividend payers · peer median 1.73% 8.57% ✓1st of 11
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and TDG doesn't clear enough of it yet. In its favor: TDG is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, converts sales into profit at healthy margins, and has grown earnings per share at a solid clip over five years. Where it comes up short: TDG carries more debt relative to equity than he typically tolerates, doesn't cover its interest expense as comfortably as he'd want, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✓
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✕
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
- Bonus: returning capital via buybacks FY2025
Lynch looked for growth stories that weren't overpriced for that growth, and TDG falls short of his bar. In its favor: TDG is growing earnings at the steady 10-20% pace of a proper Stalwart. Where it comes up short: TDG fails his signature PEG test, he'd call this pricey for the growth on offer, carries more debt than he liked to see, even allowing for the extra room a large, stable business gets, is asking investors to pay a steep multiple for that growth, and isn't generating free cash flow to match the growth story.
- PEG < 1 ✕
- EPS growth 10%-20% ✓
- Debt/Equity < 0.6 ✕
- P/E < 27 ✕
- Price/FCF < 30 ✕
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does TransDigm Group pass?
- Market Cap > $25B $61.8B
- Trailing P/E < 25 29.02
- PEG Ratio < 1.5 3.61
- Price/Book < 8 77.05
- Price/Sales < 7 6.17
- EPS Growth YoY > -5% +10.9%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is TransDigm Group's margin of safety?
History tracking starts this week - check back in a future week to see how this has moved.
Where is TransDigm Group in its 52-week range?
What is the short interest in TransDigm Group?
1,199,613 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with TransDigm Group? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -11%
- Short interest under 5% of float 2.2%
- Passes most of the 6 fundamental filters 3/6 passed
- Price run-up backed by value, not just momentum +6% off 52wk low
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have TransDigm Group shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from TDG's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do TransDigm Group's 10-year financials show?
From TDG's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about TransDigm Group
What kind of company is TransDigm Group?
TransDigm Group makes proprietary aircraft parts, often the only approved supplier, and sells to aerospace makers and airlines. This site groups it with Aerospace & Defense stocks.
Is TransDigm Group trading above or below its DCF value?
At $1141.74, TDG trades 87.7% above this site's neutral DCF value of $608.18 per share, a margin of safety of −87.7%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does TransDigm Group pass?
TDG passes 3 of 8. It passes Market Cap > $25B ($61.8B), Price/Sales < 7 (6.17) and EPS Growth YoY > -5% (+10.9%). It misses Trailing P/E < 25 (29.02), PEG Ratio < 1.5 (3.61) and Price/Book < 8 (77.05). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
How much cash does TransDigm Group return to shareholders?
TDG's net shareholder yield is +16.2%: the cash it returns through dividends and buybacks, minus stock-based compensation, as a share of its market value. Latest fiscal year (2025): dividends 15.6% + buybacks 0.8% − stock comp 0.2%, as a share of today's market cap. Over 10 years its split-adjusted share count rose 14%. Its trailing dividend yield is 8.57%, paid out of 266% of its free cash flow; the dividend-sustainability check raises 4 of 6 flags (a high cash-flow payout, a risky earnings payout, high leverage, weak interest coverage and a yield far above its sector's). See Shareholder Yield Leaders and the Sustainable Dividend Screener.
Where is TransDigm Group trading compared with its 52-week range?
At $1141.74, TDG trades 6.1% above its 52-week low of $1,076.01 and 21.3% below its 52-week high of $1,450.00. The Near 52-Week Low list tracks stocks in that position.
How risky is TransDigm Group's balance sheet?
TDG's Altman Z″-Score is 0.78, which falls in the distress zone. Altman's own thresholds are above 2.6 for the safe zone, 1.1 to 2.6 for the grey zone and below 1.1 for the distress zone; the score blends working capital, retained earnings, operating profit and equity against liabilities. Its debt-to-equity ratio is 5.41, against a sector median of 0.66. See the Altman Z″-Score list.
Where do these numbers come from?
- Financial statements: TransDigm Group's 10-K annual report for the year ended Sep 30, 2025, filed Nov 12, 2025 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this TransDigm Group Inc analysis
This page shows every value-investing check the site runs on TransDigm Group Inc (TDG) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.