ISSC vs TDG

For growth investors, Innovative Solutions and Support, Inc.

(ISSC) is the stronger pick with 78. 6% revenue growth year-over-year, versus 11. 2% for TransDigm Group Incorporated (TDG). Innovative Solutions and Support, Inc. (ISSC) offers the better valuation at 23. 8x trailing P/E (26. 6x forward), making it the more compelling value choice. Analysts rate Innovative Solutions and Support, Inc. (ISSC) a "Buy" — based on 2 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Innovative Solutions and Support, Inc.

(ISSC) is the cheapest at 23. 8x versus TransDigm Group Incorporated at 38. 7x. On forward P/E, Innovative Solutions and Support, Inc. is actually cheaper at 26. 6x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Innovative Solutions and Support, Inc. wins at 0. 74x versus TransDigm Group Incorporated's 1. 03x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Innovative Solutions and Support, Inc.

(ISSC) delivered a total return of +243. 9%, compared to +140. 2% for TransDigm Group Incorporated (TDG). Over 10 years, the gap is even starker: ISSC returned +696. 4% versus TDG's +595. 3%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), TransDigm Group Incorporated (TDG) is the lower-risk stock at 0.

79β versus Innovative Solutions and Support, Inc. 's 2. 34β — meaning ISSC is approximately 197% more volatile than TDG relative to the S&P 500.

By revenue growth (latest reported year), Innovative Solutions and Support, Inc.

(ISSC) is pulling ahead at 78. 6% versus 11. 2% for TransDigm Group Incorporated (TDG). On earnings-per-share growth, the picture is similar: Innovative Solutions and Support, Inc. grew EPS 120. 0% year-over-year, compared to 25. 2% for TransDigm Group Incorporated. Over a 3-year CAGR, ISSC leads at 44. 8% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

TransDigm Group Incorporated (TDG) is the more profitable company, earning 23.

5% net margin versus 18. 5% for Innovative Solutions and Support, Inc. — meaning it keeps 23. 5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TDG leads at 47. 2% versus 23. 8% for ISSC. At the gross margin level — before operating expenses — TDG leads at 60. 1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Innovative Solutions and Support, Inc. (ISSC) is the more undervalued stock at a PEG of 0. 74x versus TransDigm Group Incorporated's 1. 03x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Innovative Solutions and Support, Inc. (ISSC) trades at 26. 6x forward P/E versus 32. 0x for TransDigm Group Incorporated — 5. 5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for TDG: 30. 3% to $1617. 88.

In this comparison, TDG (13.

3% yield) pays a dividend. ISSC does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, TransDigm Group Incorporated (TDG) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

79), 13. 3% yield, +595. 3% 10Y return). Innovative Solutions and Support, Inc. (ISSC) carries a higher beta of 2. 34 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (TDG: +595. 3%, ISSC: +696. 4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: ISSC is a small-cap high-growth stock; TDG is a mid-cap income-oriented stock. TDG pays a dividend while ISSC does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.