TransDigm Group (TDG): Assessing Valuation After Recent Share Price Pullback
Simply Wall St 21/12 16:13 丕賱毓乇亘賷丞 Like Facebook Twitter Email LinkShare
Facebook Twitter Email Link Cancel TransDigm Group Incorporated +0.51%TransDigm Group Incorporated
TDG
1315.96
+0.51%
Recent performance and what is driving interestTransDigm Group (TDG) has been quietly recalibrating after a strong multi year run, with the stock slipping about 5% over the past month even as fundamentals continue to trend higher.
That recent pullback sits against a much stronger backdrop, with the latest share price at $1,276.83 and multi year total shareholder returns still comfortably in triple digit territory. This suggests that momentum is easing, but the long term story remains intact.
Given TransDigm鈥檚 aerospace footprint, it could also be worth scanning other aerospace and defense stocks to see which names show similar resilience and long runway potential.
With earnings still climbing, a premium valuation, and a share price sitting below consensus targets, the key question now is whether TransDigm is trading at a rare discount or if markets are already pricing in years of growth ahead.
Most Popular Narrative: 19.3% UndervaluedWith TransDigm鈥檚 fair value estimate at $1,581 versus the last close of $1,276.83, the most followed narrative sees meaningful upside grounded in earnings power.
TransDigm's strategic focus on acquiring niche, proprietary aerospace suppliers, as evidenced by recent deals like Servotronics and Simmonds, expands its high aftermarket content portfolio, driving inorganic revenue growth and enhancing EBITDA margins through operational synergies.
Curious how steady mid cycle growth, rising margins, and a richer future earnings multiple all combine to justify that higher value? The full narrative connects the dots.
Result: Fair Value of $1581 (UNDERVALUED)
However, the story is not risk free. Slower aftermarket growth and TransDigm鈥檚 elevated leverage are both potential pressure points for this bullish case.
Another Angle on ValuationLooked at through earnings multiples, TransDigm looks far less cheap. Its price to earnings ratio sits around 38.5 times, higher than the US Aerospace and Defense erage of 37.3 times, the peer erage of 32.2 times, and even our fair ratio of 32.9 times. That gap hints at valuation risk rather than a clear bargain. The question for investors is which story seems more compelling: the upside narrative or the relatively rich multiple?
NYSE:TDG PE Ratio as at Dec 2025
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If you see the numbers differently, or simply prefer to dig into the details yourself, you can craft a custom view in minutes, Do it your way.
A great starting point for your TransDigm Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
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