TransDigm Group Incorporated (TDG) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: TransDigm Group Incorporated

Updated on October 11, 2026 · accounts published on August 4, 2026

A highly profitable industrial business with record margins and a heavy debt load

TransDigm trades at a P/E of 34.8 over the last 12 months, 19 % below its ten-year median of 43.0 but 35 % above its sector median.

• Is TransDigm expensive or cheap? Its P/E of 34.8 is 19 % below its ten-year median of 43.0, yet 35 % above the sector median of 25.9.
• How is the business doing? The fiscal 2025 operating margin of 47 % was the highest in 12 years, above the 2014-2025 average of 41 %.
• How strong is the balance sheet? Net debt was $494.74 per share in fiscal 2025, 43 % of the share price and 6.0× EBITDA, double the healthy 3.0× mark.
• What to expect from the next earnings? Analysts expect EPS of $12.22 in the results due November 11, 2026; TransDigm beat in 6 of the last 8 quarters.
• Does TransDigm turn its margin into cash, and at what multiple of the cycle does it trade? Free cash flow equaled 88 % of net income in fiscal 2025, just above the 85 % bar for healthy industrials.

Is TransDigm expensive or cheap?

Over the last 12 months TransDigm trades at a P/E of 34.8, 19 % below its ten-year median of 43.0. In the last decade it traded at a lower multiple only 30 % of the time, within a range of 19.5 to 66.7. Next to the 298 companies in its sector the view shifts: the sector median P/E is 25.9, so TransDigm carries a 35 % premium. EV/EBITDA of 18.6× is below its seven-year average of 22.3×. The shares are down 12 % over 12 months and sit 21 % below their 52-week high of $1,450.00.

How is the business doing?

Revenue grew 11 % over the last 12 months and EPS rose 25 %, so profits are growing faster than sales. The operating margin of 46 % over the last 12 months follows a fiscal 2025 margin of 47 %, the best of the last 12 fiscal years and well above the 41 % average for 2014-2025. Net margin stands at 21 %. ROIC of 14.4 % over the last 12 months is 5.5 points above the sector median of 8.8 %, and it has stayed above 10 % in 6 of the last 10 fiscal years, with a low of 8.8 % in 2021.

How strong is the balance sheet?

Debt is the weak point. At the end of fiscal 2025 TransDigm carried $542.99 of debt per share against $48.25 of cash, leaving net debt of $494.74 per share, equal to 43 % of the current price. Net debt runs at 6.0× EBITDA, while industrial companies count as healthy below 3.0×. Short-term liquidity looks comfortable, with a current ratio of 3.02 over the last 12 months. The Altman Z-score of 2.0 sits in the grey zone between 1.81 and 2.99, above the danger line and short of the safe zone. The Piotroski score of 6 out of 9 is one point shy of the high-quality mark.

What to expect from the next earnings?

TransDigm reports next on November 11, 2026, and the consensus calls for EPS of $12.22. Last time, on August 4, 2026, it delivered $10.87 against $10.30 expected, a 5.5 % beat, and it has topped EPS estimates in 6 of the last 8 quarters. Expectations for 2027 are steady: the EPS consensus barely moved in the last 26 days, from $48.34 to $48.35 across 14 analysts, while the revenue estimate rose 0.7 %. Of the 39 analysts covering the company, 19 rate it a buy, 20 a hold and none a sell.

Does TransDigm turn its margin into cash, and at what multiple of the cycle does it trade?

Industrial companies are semi-cyclical, so order books, operating margin and cash conversion say more than one year of earnings. TransDigm's fiscal 2025 operating margin of 47 % is nearly four times the 12 % healthy mark for the sector, and 88 % of net income became free cash flow, just above the 85 % threshold. Capex was only 2.5 % of revenue in fiscal 2025, below the 4 % to 8 % range typical of healthy industrials. Against its own history, the P/E of 34.8 sits below its ten-year average of 41.6 and EV/EBITDA of 18.6× below its seven-year average of 22.3×.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.