Value
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 4.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.3 |
| PEG | 3.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 28.7x
- ▸PEG: 3.05
TDG · Why this verdict
Why Transdigm Group (TDG) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business generates 22% net margins with a Piotroski financial-health score of 9 out of 9, placing it at the top of its industrial peers on both profitability and balance-sheet strength. Quality breakdown | Operating margin remains above 20% and the Piotroski score stays at 9 out of 9 over the next four reported quarters. | →Stable |
| CounterThe earnings-quality warning that free cash flow is 73% of net income signals that reported earnings are outrunning cash generation; if this gap widens, the headline margin strength may be overstating durable cash profitability. | ||
The company beat consensus EPS estimates in each of the three most recent quarters — by 7.9%, 2.4%, and 1.6% respectively — after a single miss in the oldest quarter, demonstrating consistent execution against Street expectations. Earnings | EPS beats consensus in each of the next 2 quarters with a positive average surprise, extending the recent streak. | →Stable |
| CounterThe miss in the oldest reported quarter (3% below estimate) shows the beat streak is not unconditional; if volume or pricing disappoints at the next report in August, the streak could reverse and the average surprise would turn negative. | ||
Street analysts carry a consensus target implying approximately 26% upside from current levels, with the modeled take-profit level roughly 13.7% above the current price — a material implied appreciation despite the near-term technical weakness. Sentiment breakdown | The consensus price target is maintained or raised over the next 12 months, keeping upside to the take-profit level above 10%. | →Stable |
| CounterAnalyst targets can lag price action; given the confirmed downtrend, price targets may be progressively revised lower if the stock continues to underperform, compressing the implied upside materially before it is ever realized. | ||
The stock is trading below its 200-day moving average with the moving-average slope declining at 1.4% over 30 days, and a death-cross pattern has triggered — a combination that signals sustained near-term price weakness and limits the constructive case until momentum recovers. Momentum breakdown | Price recrosses and holds above the 200-day moving average with the MA slope turning flat or positive, confirming the downtrend has ended. | →Stable |
| CounterThe elevated put/call ratio of 2.79 and high implied volatility of 72% may already reflect maximum near-term pessimism; if these sentiment extremes unwind, price can recover faster than the chart structure alone implies. | ||
The business generates 22% net margins with a Piotroski financial-health score of 9 out of 9, placing it at the top of its industrial peers on both profitability and balance-sheet strength.
→StableQuality breakdown
- Expectation
- Operating margin remains above 20% and the Piotroski score stays at 9 out of 9 over the next four reported quarters.
CounterThe earnings-quality warning that free cash flow is 73% of net income signals that reported earnings are outrunning cash generation; if this gap widens, the headline margin strength may be overstating durable cash profitability.
The company beat consensus EPS estimates in each of the three most recent quarters — by 7.9%, 2.4%, and 1.6% respectively — after a single miss in the oldest quarter, demonstrating consistent execution against Street expectations.
→StableEarnings
- Expectation
- EPS beats consensus in each of the next 2 quarters with a positive average surprise, extending the recent streak.
CounterThe miss in the oldest reported quarter (3% below estimate) shows the beat streak is not unconditional; if volume or pricing disappoints at the next report in August, the streak could reverse and the average surprise would turn negative.
Street analysts carry a consensus target implying approximately 26% upside from current levels, with the modeled take-profit level roughly 13.7% above the current price — a material implied appreciation despite the near-term technical weakness.
→StableSentiment breakdown
- Expectation
- The consensus price target is maintained or raised over the next 12 months, keeping upside to the take-profit level above 10%.
CounterAnalyst targets can lag price action; given the confirmed downtrend, price targets may be progressively revised lower if the stock continues to underperform, compressing the implied upside materially before it is ever realized.
The stock is trading below its 200-day moving average with the moving-average slope declining at 1.4% over 30 days, and a death-cross pattern has triggered — a combination that signals sustained near-term price weakness and limits the constructive case until momentum recovers.
→StableMomentum breakdown
- Expectation
- Price recrosses and holds above the 200-day moving average with the MA slope turning flat or positive, confirming the downtrend has ended.
CounterThe elevated put/call ratio of 2.79 and high implied volatility of 72% may already reflect maximum near-term pessimism; if these sentiment extremes unwind, price can recover faster than the chart structure alone implies.
TrendMatrix Research · core thesis
Engine thesis — one sentence
TransDigm Group delivers best-in-class margins of 22% and a maximum Piotroski financial-health score alongside a consistent recent earnings track record, offering a favorable risk/reward of roughly 2.7-to-1; the confirmed price downtrend and death-cross pattern are the primary near-term headwinds gating the timing of any entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 7.8 |
| Gross margin | 7.9 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 9.5 |
| FCF quality | 5.6 |
| Moat | 7.0 |
| Piotroski F | 10.0 |
- ▸Strong margins: 22%
- ▸Earnings quality warning: 73% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
- ▸High-quality business
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
| EPS growth | 4.3 |
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Overbought (RSI 70)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 7.5 |
| Price target | 6.9 |
- ▸LLM news sentiment: +0.55 (n=1)
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $79,364,981 (0.105% of mkt cap)
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 9.8 |
| growth rank | 4.8 |
- ▸Best-in-class margins
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.6 |
| support resistance | 0.8 |
| 52w position | 8.4 |
| gap | 5.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 7.8 |
| volatility | 6.0 |
| put call | 0.0 |
| implied vol | 5.8 |
| beta | 7.7 |
- ▸Elevated put/call: 5.53
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.9 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.4>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (1)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.17
Upside
+1.8%
Downside
10.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.4>=4.5. Top dim: Quality at 8.5; weakest: Insider at 3.4. No conviction either direction.
The strongest dimensions are Quality at 8.5, Sentiment at 7.4, and Peer rank at 6.0; the weakest are Insider at 3.4, Value at 3.6, and Technical at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.17 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Margins Financial Health
Trip ifOperating margin compresses below 20% from the current 22% for 2 consecutive quarters.
- P2Recent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Analyst Consensus Material Upside
Trip ifAnalyst consensus price target falls below $1,300, reducing upside to the take-profit level below 8%.
- P4Confirmed Downtrend Death Cross Headwind
Trip ifPrice crosses above the 200-day moving average and the MA slope exceeds 0% for 30 consecutive days.