📊 ALSN Key Takeaways
Is Allison Transmission Holdings Inc (ALSN) a Good Investment?
Despite exceptional 3371.7% YoY revenue growth, Allison Transmission exhibits concerning fundamental deterioration with net income declining 14.8% and EPS down 11.8%, signaling severe margin compression or one-time charges. The company carries elevated leverage (2.23x D/E) with weak capital returns (ROE 5.9%, ROA 1.3%) and modest free cash flow generation relative to $4.2B debt burden, creating financial distress risk.
Allison Transmission shows strong underlying fundamentals, with high gross, operating, and net margins alongside robust free cash flow generation. The balance sheet is liquid and profitability remains solid, but declining net income/EPS and the extreme reported revenue growth suggest growth quality should be treated cautiously until confirmed by future filings.
Allison Transmission Holdings Inc Key Strengths (ALSN)
- Positive free cash flow of $103M with 7.3% FCF margin supports debt servicing
- Adequate liquidity with 1.85x current ratio and $311M cash position
- Operating margin of 13.9% remains reasonable for automotive parts sector
- High profitability with 48.6% gross margin, 29.2% operating margin, and 20.7% net margin
- Strong cash generation with $836.00M operating cash flow and $661.00M free cash flow
- Healthy liquidity position with $1.50B cash and current ratio of 4.85x
ALSN Stock Risks: Allison Transmission Holdings Inc Investment Risks
- Net income collapsed 14.8% YoY despite massive revenue growth indicating severe margin compression or extraordinary charges
- Excessive leverage at 2.23x D/E with $4.2B long-term debt against $1.9B equity; interest coverage ratio unavailable suggesting elevated concern
- Abysmal return metrics (ROE 5.9%, ROA 1.3%) indicate capital inefficiency and poor shareholder value generation
- Net income and diluted EPS declined year over year, indicating earnings pressure despite reported revenue growth
- Leverage remains meaningful with $2.91B long-term debt and 1.56x debt-to-equity
- Reported 3371.7% revenue growth appears unusual, raising questions about comparability or growth quality
Key Metrics to Watch
- Net income trend and underlying causes of earnings decline relative to revenue growth
- Debt reduction progress and interest coverage ratio trajectory
- Return on equity improvement and free cash flow sustainability
- Net income and diluted EPS trend
- Free cash flow consistency and debt reduction progress
Allison Transmission Holdings Inc (ALSN) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Allison Transmission Holdings Inc presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
ALSN Profit Margin, ROE & Profitability Analysis
ALSN vs Automotive Sector: How Allison Transmission Holdings Inc Compares
How Allison Transmission Holdings Inc compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Allison Transmission Holdings Inc Stock Overvalued? ALSN Valuation Analysis 2026
Based on fundamental analysis, Allison Transmission Holdings Inc shows some fundamental concerns 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.
Allison Transmission Holdings Inc Balance Sheet: ALSN Debt, Cash & Liquidity
ALSN Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Allison Transmission Holdings Inc's revenue has grown significantly by 20% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.40 reflects profitable operations.
ALSN Revenue Growth, EPS Growth & YoY Performance
ALSN Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $766.0M | $112.0M | $1.33 |
| Q3 2025 | $693.0M | $137.0M | $1.63 |
| Q2 2025 | $814.0M | $187.0M | $2.13 |
| Q1 2025 | $766.0M | $169.0M | $1.90 |
| Q3 2024 | $736.0M | $158.0M | $1.76 |
| Q2 2024 | $783.0M | $175.0M | $1.92 |
| Q1 2024 | $741.0M | $169.0M | $1.85 |
| Q3 2023 | $710.0M | $139.0M | $1.45 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Allison Transmission Holdings Inc Dividends, Buybacks & Capital Allocation
ALSN SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Allison Transmission Holdings Inc (CIK: 0001411207)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ALSN
What is the AI rating for ALSN?
Allison Transmission Holdings Inc (ALSN) has a Combined AI Grade of B from Claude (C) and ChatGPT (A) with 72% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ALSN's key strengths?
Claude: Positive free cash flow of $103M with 7.3% FCF margin supports debt servicing. Adequate liquidity with 1.85x current ratio and $311M cash position. ChatGPT: High profitability with 48.6% gross margin, 29.2% operating margin, and 20.7% net margin. Strong cash generation with $836.00M operating cash flow and $661.00M free cash flow.
What are the risks of investing in ALSN?
Claude: Net income collapsed 14.8% YoY despite massive revenue growth indicating severe margin compression or extraordinary charges. Excessive leverage at 2.23x D/E with $4.2B long-term debt against $1.9B equity; interest coverage ratio unavailable suggesting elevated concern. ChatGPT: Net income and diluted EPS declined year over year, indicating earnings pressure despite reported revenue growth. Leverage remains meaningful with $2.91B long-term debt and 1.56x debt-to-equity.
What is ALSN's revenue and growth?
Allison Transmission Holdings Inc reported revenue of $1.4B.
Does ALSN pay dividends?
Allison Transmission Holdings Inc pays dividends, with $25.0M distributed to shareholders in the trailing twelve months.
Where can I find ALSN SEC filings?
Official SEC filings for Allison Transmission Holdings Inc (CIK: 0001411207) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ALSN's EPS?
Allison Transmission Holdings Inc has a diluted EPS of $1.33.
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 ALSN's fundamental grade?
Based on our AI fundamental analysis in June 2026, Allison Transmission Holdings Inc has a B grade with 72% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is ALSN stock overvalued or undervalued?
Valuation metrics for ALSN: ROE of 5.9% (sector avg: 12%), net margin of 8.0% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
What is ALSN's AI grade for 2026?
Our dual AI analysis gives Allison Transmission Holdings Inc a combined B grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ALSN's free cash flow?
Allison Transmission Holdings Inc's operating cash flow is $156.0M, with capital expenditures of $53.0M. FCF margin is 7.3%.
How does ALSN compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 8.0% (avg: 6%), ROE 5.9% (avg: 12%), current ratio 1.85 (avg: 1.2).
Is Allison Transmission Holdings Inc carrying too much debt?
ALSN has a debt-to-equity ratio of 2.23x, which is above the Automotive sector average of 1x. However, the current ratio of 1.85 suggests adequate short-term liquidity.