Allison Transmission pairs a 9.6x forward P/E and 28% ROE with 12% upside to the analyst target, but customer and geographic concentration and weak cash conversion temper it, with earnings due tomorrow.
Thesis pillars
- Cheap Forward Valuation↓Deteriorating
- High Return On Equity→Stable
- Revenue Step Up→Stable
- +2 more pillars — see the Why tab for full reasoning
Pillars as of Nov 1, 2026, based on the 10-K filed Feb 24, 2026
Allison Transmission Holdings, (ALSN) Stock Analysis
Momentum Cont setup
Consumer Cyclical · Auto Parts
Hold if already holding. Not a fresh buy at $118.92, but acceptable to hold if already in. Reasons: Concentration risk — Geographic: North America (76.0%); Concentration risk — Customer: top five OEM customers (52.0%).
Allison Transmission manufactures fully automatic transmissions and propulsion solutions for commercial vehicles, defense, and off-highway markets, generating revenues 76% concentrated in North America in 2025. The top five OEM customers (Daimler, PACCAR, Traton and others)... Read more
Hold if already holding. Not a fresh buy at $118.92, but acceptable to hold if already in. Reasons: Concentration risk — Geographic: North America (76.0%); Concentration risk — Customer: top five OEM customers (52.0%). Chart setup: Trend continuation, RSI 65, MACD bullish. Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING) Score 6.4/10, high confidence.
Passes 6/8 gates (positive momentum, clean insider activity, news boost earnings 0.80, earnings proximity 110d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
About Allison Transmission Holdings,
About Allison Transmission Holdings,
North America On-Highway transmissions generated $1.54 billion — 51% of Allison Transmission's 2025 net sales — while Service Parts and Support Equipment contributed $643 million (21%), Outside North America On-Highway $507 million (17%), Defense $267 million (9%), and Global Off-Highway $53 million (2%). Roughly 76% of total revenues originated in North America across all segments. The Indianapolis-based company distributed through approximately 1,500 independent distributor and dealer locations globally.
Allison sells transmissions to OEMs who install them as original or optional equipment in commercial vehicles. In North America, over 90% of on-highway unit volume is covered by long-term agreements typically running three to five years, offering defined pricing and commodity cost-sharing terms. The three largest customers in 2025 — Daimler AG (18% of net sales), PACCAR Inc. (11%), and Traton SE (10%) — together represented 39% of net sales, with the full top-five group at 52%. The company competes primarily with Ford Motor Company, ZF Friedrichshafen AG, and Driventic GmbH in North American fully automatic transmissions and with BAE Systems in electric hybrid transit propulsion. The aftermarket — branded service parts, remanufactured transmissions, and transmission fluids — contributes roughly 21% of net sales and benefits from the growing installed base of Allison-equipped vehicles. Defense revenues stem from long-standing U.S. Department of Defense contracts covering tactical wheeled vehicles and tracked vehicles including the Abrams M1A2 tank.
Show full overview
Labor exposure is elevated: 49% of Allison's U.S. employees, representing 43% of total employees, are covered by a UAW collective bargaining agreement effective through November 2027. Following the January 2026 acquisition of the Acquired Off-Highway Business, approximately 68% of those newly acquired U.S. employees are also represented by UAW or USW. The 10-K notes significant labor cost increases under recent collective bargaining, and if renewed agreements require further compensation increases beyond anticipated levels, operating margins could be pressured in 2027 and beyond.
See also: Consumer Cyclical · Auto Parts
From Allison Transmission Holdings, 's most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated Nov 1, 2026Recent Developments — Allison Transmission Holdings,
Latest news
- NEWS Parcion Private Wealth LLC Sells 39,664 Shares of Allison Transmission Holdings, Inc. $ALSN - MarketBeat — MarketBeat Nov 1, 2026 neutral
- NEWS Allison Transmission (ALSN) Q3 earnings report preview: what to look for - Yahoo Finance — Yahoo Finance Nov 1, 2026 neutral
- NEWS Allison Transmission (ALSN) Q3 earnings report preview: what to look for - StockStory — StockStory Nov 1, 2026 neutral
- NEWS Allison Transmission (ALSN) Q3 earnings report preview: what to look for - TradingView — TradingView Nov 1, 2026 neutral
- NEWS Supplier Award Could Matter For Allison Transmission Stock As Quarterly Growth Expectations Build - Simply Wall St — Simply Wall St Oct 29, 2026 neutral
Latest item Nov 1, 2026 · Generated 2026-11-04T11:34:30Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHGeographicNorth America76%10-K Item 1: 'approximately 76% of our revenues being generated in North America in 2025'
- HIGHCustomertop five OEM customers52%10-K Item 1A: 'our top five OEM customers accounted for approximately 52%, 55% and 52% of our net sales, respectively'
- LOWCustomerDaimler AG18%10-K Item 1A: 'Our top three customers, Daimler AG, PACCAR Inc. and Traton SE, accounted for approximately 18%, 11% and 10%, respectively, of our net sales during 2025'
- HIGHSuppliersingle source suppliers10-K Item 1A: 'approximately 75% of our total spending on components was sourced from approximately 40 suppliers, many of which are the single source for such components'
Material Events(8-K, last 90d)
- 2026-05-08Item 5.02LOWChief Legal Officer Eric C. Scroggins designated as Tier 1 participant (upgraded from Tier 1/2) in the Executive Change in Control and Severance Plan, approved May 6, 2026 by the Compensation Committee. No departure; compensatory arrangement update only.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
Rating Breakdown
1 floor-breaker·1 ceiling hit
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $118.92, but acceptable to hold if already in. Reasons: Concentration risk — Geographic: North America (76.0%); Concentration risk — Customer: top five OEM customers (52.0%). Chart setup: Trend continuation, RSI 65, MACD bullish. Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING) Analyst target $121.28 (+2.0%), stop $111.48 (−6.7%), A.R:R 0.2:1. Score 6.4/10, high confidence.
Analyst target: $121.28 (+2.0% upside). Analyst target $121.28 (+2.0%), stop $111.48 (−6.7%), A.R:R 0.2:1. Stop-loss: $111.48.
Concentration risk — Geographic: North America (76.0%); Concentration risk — Customer: top five OEM customers (52.0%); Analyst target reached - limited upside remaining.
Allison Transmission Holdings, trades at a P/E of 18.0 (forward 10.4). TrendMatrix value score: 7.6/10. Verdict: Hold.
17 analysts rate ALSN, with a consensus score of 3.9/5. 10 analysts publish price targets averaging $139.
What does Allison Transmission Holdings, do?Allison Transmission manufactures fully automatic transmissions and propulsion solutions for commercial vehicles,...
Allison Transmission manufactures fully automatic transmissions and propulsion solutions for commercial vehicles, defense, and off-highway markets, generating revenues 76% concentrated in North America in 2025. The top five OEM customers (Daimler, PACCAR, Traton and others) represented 52% of net sales; long-term agreements with OEMs cover over 90% of North American on-highway volume.