Value
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.1 |
| P/S | 8.9 |
| EV/EBITDA | 5.2 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 10.0x
- ▸PEG: 0.49
- ▸Attractively valued
ALSN · Why this verdict
Why Allison Transmission Holdings (ALSN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.3/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
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.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Forward P/E of 9.6x and a PEG of 0.49 are attractive against growth. Valuation breakdown | Forward P/E stays below 12x as earnings hold. | ↓Deteriorating |
| CounterAuto-parts earnings are cyclical and the low multiple may price a downturn. | ||
Return on equity of 28% with a Piotroski score of 7 of 9 indicates strong returns. Quality breakdown | ROE stays above 20%. | →Stable |
| CounterFree cash flow is only 40% of net income, a quality red flag. | ||
Quarterly revenue rose from about $737M in late 2025 to $1.57B in the June 2026 quarter, about 92% YoY growth. Growth breakdown | Quarterly revenue stays above $1.3B. | →Stable |
| CounterThe jump likely reflects an acquisition or one-time change and may not persist. | ||
The top five OEM customers are 52% of revenue and North America is 76%, a concentrated exposure. Bear case | Top-five customer share stays below 55%. | ↓Deteriorating |
| CounterLoss or order cuts at one OEM would significantly hit sales. | ||
The analyst target of $120.85 is about 11.8% above the $108.05 price with a reward-to-risk of 2.1. Targets | Price moves toward the target after earnings. | ↓Deteriorating |
| CounterEarnings in one day are a binary event, and misses occurred in two of the last four quarters. | ||
Forward P/E of 9.6x and a PEG of 0.49 are attractive against growth.
↓DeterioratingValuation breakdown
- Expectation
- Forward P/E stays below 12x as earnings hold.
CounterAuto-parts earnings are cyclical and the low multiple may price a downturn.
Return on equity of 28% with a Piotroski score of 7 of 9 indicates strong returns.
→StableQuality breakdown
- Expectation
- ROE stays above 20%.
CounterFree cash flow is only 40% of net income, a quality red flag.
Quarterly revenue rose from about $737M in late 2025 to $1.57B in the June 2026 quarter, about 92% YoY growth.
→StableGrowth breakdown
- Expectation
- Quarterly revenue stays above $1.3B.
CounterThe jump likely reflects an acquisition or one-time change and may not persist.
The top five OEM customers are 52% of revenue and North America is 76%, a concentrated exposure.
↓DeterioratingBear case
- Expectation
- Top-five customer share stays below 55%.
CounterLoss or order cuts at one OEM would significantly hit sales.
The analyst target of $120.85 is about 11.8% above the $108.05 price with a reward-to-risk of 2.1.
↓DeterioratingTargets
- Expectation
- Price moves toward the target after earnings.
CounterEarnings in one day are a binary event, and misses occurred in two of the last four quarters.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.4 |
| ROA | 5.6 |
| Gross margin | 3.6 |
| Op margin | 7.6 |
| Net margin | 6.0 |
| Current ratio | 6.4 |
| FCF quality | 3.2 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 28%
- ▸Earnings quality RED FLAG: 40% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 0.8 |
- ▸Strong growth: 92% YoY
Momentum
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 10.0 |
| vol acceleration | 9.4 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
- ▸Volume surge (2.7x avg) on up move
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.2 |
| Analyst rating | 5.0 |
| Price target | 7.3 |
- ▸LLM news sentiment: +0.45 (n=4)
Insider
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.6 |
| notable moves | 7.0 |
- ▸Modest insider selling — $4,167,468 (0.045% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 8.7 |
| growth rank | 9.0 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 2.3 |
| 52w position | 7.4 |
| gap | 4.0 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 8.0 |
| volatility | 4.7 |
| put call | 7.9 |
| implied vol | 4.6 |
| max pain risk | 3.0 |
| beta | 6.7 |
| debt equity | 2.9 |
- ▸Above max pain $60
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| surprise avg | 7.8 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (6)
- MOMENTUM:8.9>=5.5
- INSIDER:OK
- NEWS_BOOST:EARNINGS:0.80
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.14
Upside
+1.6%
Downside
11.6%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 65, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 8.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.1<1.5@spot) reinforce the read. Current asymmetry R:R is 0.14 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 8.9, Value at 7.7, and Catalyst at 7.2; the weakest are Technical at 3.4, Insider at 4.8, and Growth at 5.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.14 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Forward Valuation
Trip ifForward P/E rises above 14x.
- P2High Return On Equity
Trip ifReturn on equity falls below 18% from current 28%.
- P3Revenue Step Up
Trip ifQuarterly revenue falls below $1.2B.
- P4Customer Geographic Concentration
Trip ifTop five OEM customer share exceeds 60% of revenue.
- P5Analyst Target Upside
Trip ifAnalyst upside to target falls below 5% from current 11.8%.