Upside case
Bull case
$274+114.3%
ALSN would need investors to value it at roughly 30x earnings — about 16x more generous than today's 14x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Allison Transmission Holdings, Inc. (ALSN) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
29
analysts
7 bullish · 6 bearish · 29 covering ALSN
Strong Buy
1
Buy
6
Hold
16
Sell
6
Strong Sell
0
Consensus Target
$116
-9.2% vs today
Scenario Range
$117 – $274
Model bear to bull value window
Coverage
29
Published analyst ratings
Valuation Context
14.1x
Forward P/E · Market cap $10.6B
ALSN price targets
Three scenarios for where ALSN stock could go
Current
~$128
Confidence
57 / 100
Updated
May 1, 2026
Where we are now
Current · $128
Bear
$117
Base
$153
Bull
$274
Market caseClosest to today
Base case
$153+19.5%
At 17x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$117-8.8%
If investor confidence fades or macro conditions deteriorate, a 1x multiple contraction could push ALSN down roughly 9% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Allison Transmission Holdings, Inc.
ALSN · NYSEConsumer CyclicalAuto - PartsDecember year-end
Allison Transmission is a leading manufacturer of fully-automatic transmissions for medium- and heavy-duty commercial vehicles and U.S. defense tactical vehicles. It generates revenue primarily from original equipment manufacturer sales (~60%) and aftermarket parts/services (~40%), serving customers through a global network of independent distributors. The company's moat lies in its deep technical expertise in automatic transmissions for heavy vehicles—a specialized niche with high barriers to entry—and its strong brand reputation built over decades.
Market Cap
$10.6B
Revenue TTM
$3.6B
Net Income TTM
$543M
Net Margin
14.9%
ALSN Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
75%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
+1.0%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 1 of 4Q3 2025
EPS
$2.29/$2.20
Revenue
$814M/$799M
Q4 2025
EPS
$1.63/$1.95
Revenue
$693M/$719M
Q1 2026
EPS
$1.18/$1.56
Revenue
$737M/$725M
Q2 2026
EPS
$1.33/$2.10
Revenue
$1.4B/$1.4B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $2.29/$2.20 | +4.1% | $814M/$799M | +1.8% |
| Q4 2025 | $1.63/$1.95 | -16.4% | $693M/$719M | -3.6% |
| Q1 2026 | $1.18/$1.56 | -24.4% | $737M/$725M | +1.6% |
| Q2 2026 | $1.33/$2.10 | -36.7% | $1.4B/$1.4B | +1.9% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$4.0B
+8.8% YoY
FY2
$4.0B
-0.6% YoY
EPS Outlook
FY1
$7.83
+21.2% YoY
FY2
$8.76
+11.9% YoY
Trailing FCF (TTM)$713M
FCF Margin: 19.5%
Next Earnings
May 7, 2026
Expected EPS
$2.08
Expected Revenue
$1.4B
ALSN beat EPS estimates in 1 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
ALSN Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $910M
Product Mix
Latest annual revenue by segment or product family
Service Parts Support Equipment And Other
70.7%
-3.0% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
72.2%
-8.3% YoY
Tap, hover, or focus a slice to inspect segment detail.
Service Parts Support Equipment And Other is the largest disclosed segment at 70.7% of FY 2025 revenue, down 3.0% YoY.
UNITED STATES is the largest reported region at 72.2%, down 8.3% YoY.
ALSN Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Undervalued
Fair value est. $146 — implies +11.0% from today's price.
Upside to Fair Value
11.0%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
ALSN
17.4x
vs
S&P 500
25.2x
31% discount
vs Consumer Cyclical Trailing P/E
ALSN
17.4x
vs
Consumer Cyclical
19.6x
11% discount
vs ALSN 5Y Avg P/E
Today
17.4x
vs
5Y Average
10.1x
+72% premium
Forward PE
14.1x
S&P 500
19.1x
-26%
Consumer Cyclical
15.2x
-7%
5Y Avg
—
—
Trailing PE
17.4x
S&P 500
25.2x
-31%
Consumer Cyclical
19.6x
-11%
5Y Avg
10.1x
+72%
PEG Ratio
0.76x
S&P 500
1.74x
-56%
Consumer Cyclical
0.95x
-20%
5Y Avg
—
—
EV/EBITDA
11.0x
S&P 500
15.2x
-28%
Consumer Cyclical
11.4x
-3%
5Y Avg
8.0x
+37%
Price/FCF
16.4x
S&P 500
21.3x
-23%
Consumer Cyclical
14.9x
+10%
5Y Avg
10.4x
+58%
Price/Sales
3.5x
S&P 500
3.1x
+12%
Consumer Cyclical
0.7x
+397%
5Y Avg
2.1x
+68%
Dividend Yield
0.84%
S&P 500
1.87%
-55%
Consumer Cyclical
2.15%
-61%
5Y Avg
1.53%
-45%
| Metric | ALSN | S&P 500 | Consumer Cyclical | 5Y Avg ALSN |
|---|---|---|---|---|
| Forward PE | 14.1x | 19.1x-26% | 15.2x | — |
| Trailing PE | 17.4x | 25.2x-31% | 19.6x-11% | 10.1x+72% |
| PEG Ratio | 0.76x | 1.74x-56% | 0.95x-20% | — |
| EV/EBITDA | 11.0x | 15.2x-28% | 11.4x | 8.0x+37% |
| Price/FCF | 16.4x | 21.3x-23% | 14.9x | 10.4x+58% |
| Price/Sales | 3.5x | 3.1x+12% | 0.7x+397% | 2.1x+68% |
| Dividend Yield | 0.84% | 1.87% | 2.15% | 1.53% |
ALSN trades above S&P 500 benchmarks on 1 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolALSN Financial Health
Verdict
Exceptional
ALSN generates $713M in free cash flow at a 19.5% margin — 22.2% ROIC signals a durable competitive advantage · returns 3.9% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$3.6B
Revenue Growth
TTM vs prior year
+14.0%
Gross Margin
Gross profit as a share of revenue
40.8%
Operating Margin
Operating income divided by revenue
24.1%
Net Margin
Net income divided by revenue
14.9%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$6.46
Free Cash Flow (TTM)
Cash generation after capex
$713M
FCF Margin
FCF as share of revenue — the primary cash quality signal
19.5%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
22.2%
ROA
Return on assets, trailing twelve months
8.4%
Cash & Equivalents
Liquid assets on the balance sheet
$1.5B
Net Debt
Total debt minus cash
$1.4B
Debt Serviceability
Net debt as a multiple of annual free cash flow
2.0× FCF
~2.0 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
29.5%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
3.9%
Dividend
0.8%
Buyback
3.1%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$328M
Dividend / Share
Annualized trailing dividend per share
$1.07
Payout Ratio
Share of earnings distributed as dividends
14.6%
Shares Outstanding
Declining as buybacks retire shares
83M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageALSN Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Financial Leverage
Allison Transmission's trailing net debt-to-EBITDA ratio of 1.9x is on the higher end of its peer group, raising concerns about financial leverage. This is particularly concerning in the context of declining revenues.
High Risk
Economic Volatility
The company's performance is significantly tied to demand trends in North America, where there has been a year-over-year decline in off-highway sales due to reduced demand in the energy sector. The core North American on-highway business has also seen a double-digit decrease in topline, with demand expected to remain subdued due to lower OEM build rates.
Medium
Customer Concentration
Allison Transmission faces risks related to high customer concentration, which can lead to significant revenue fluctuations if key customers reduce orders. Additionally, competition from rival transmission manufacturers poses a threat to market share.
Medium
Defense Spending
Potential cuts in defense spending could weaken demand for Allison Transmission's products, particularly in the defense sector where the company has seen strong sales. Any reduction in government budgets could adversely affect revenue.
Medium
Electrification Risks
The shift towards electrification in the automotive and transportation sectors poses a central risk for future returns for Allison Transmission. The company must adapt to changing technologies and market demands to remain competitive.
Lower
Valuation Concerns
The stock has been trading at a forward P/E above its historical averages, despite an unfavorable growth outlook. While some analyses suggest the stock may be undervalued based on certain metrics, others indicate it is trading at a premium.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why ALSN Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Dominant Market Share and Resilient Business Model
Allison Transmission holds a leading position in the North American market for fully-automatic transmissions, particularly for medium- and heavy-duty vehicles. Its business model is considered resilient, with less exposure to cyclical auto production and strong demand from sectors like defense and municipal spending.
Financial Strength and Growth
The company demonstrates strong free cash flow generation, robust operating cash flow, and a solid liquidity position. Recent financial performance shows significant increases in gross profit and operating income, driven by price increases and strong demand in sectors like North American on-highway (vocational vehicles) and defense.
Strategic Growth Initiatives
Allison Transmission is actively pursuing growth through several avenues, including electrification of vehicle transmission solutions, capitalizing on accelerating defense spending, and expanding internationally. Investments in international sales forces and a focus on productivity and pricing execution are expected to drive future earnings resilience.
Attractive Valuation
Despite significant past share price appreciation, some analyses suggest the stock may still be undervalued. The company's valuation is considered undemanding at sub-10x EV/EBITDA, supported by aggressive buybacks and a growing dividend.
Positive Technical Indicators
Some technical analyses indicate buy signals from both short and long-term moving averages, suggesting a positive short-term forecast for the stock.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
ALSN Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$127.70
52W Range Position
84%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$76.01
+68.0% from the low
52-Week High
$137.42
-7.1% from the high
1 Month
+8.72%
3 Month
+10.44%
YTD
+29.1%
1 Year
+31.5%
3Y CAGR
+38.5%
5Y CAGR
+23.5%
10Y CAGR
+16.4%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
ALSN vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
14.1x
vs 14.0x median
+1% above peer median
Revenue Growth
+8.8%
vs +2.6% median
+240% above peer median
Net Margin
14.9%
vs 2.3% median
+559% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
ALS ALSN Allison Transmission Holdings, Inc. | $10.6B | 14.1x | +8.8% | 14.9% | Hold | -9.2% |
AST ASTE Astec Industries, Inc. | $1.2B | 14.3x | +7.3% | 2.8% | Buy | -32.8% |
BWA BWA BorgWarner Inc. | $12.3B | 11.5x | +2.6% | 0.9% | Buy | +15.8% |
DAN DAN Dana Incorporated | $4.8B | 14.0x | -13.5% | — | Buy | +3.9% |
ETN ETN Eaton Corporation plc | $163.5B | 31.7x | +9.1% | 14.0% | Buy | -9.9% |
APT APTV Aptiv PLC | $12.1B | 8.7x | -3.3% | 1.8% | Buy | +66.8% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
ALSN Dividend and Capital Return
ALSN returns capital mainly through $328M/year in buybacks (3.1% buyback yield), with a modest 0.84% dividend — combining for 3.9% total shareholder yield. The dividend has grown for 6 consecutive years.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
3.9%
Dividend + buyback return per year
Buyback Yield
3.1%
Dividend Yield
0.84%
Payout Ratio
14.6%
How ALSN Splits Its Return
Div 0.84%
Buyback 3.1%
Dividend 0.84%Buybacks 3.1%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$1.07
Growth Streak
Consecutive years of dividend increases
6Y
3Y Div CAGR
8.7%
5Y Div CAGR
9.7%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$328M
Estimated Shares Retired
3M
Approx. Share Reduction
3.1%
Shares Outstanding
Current diluted share count from the screening snapshot
83M
At 3.1%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.29 | — | — | — |
| 2025 | $1.08 | +8.0% | 3.9% | 5.0% |
| 2024 | $1.00 | +8.7% | 2.7% | 3.6% |
| 2023 | $0.92 | +9.5% | 5.1% | 6.7% |
| 2022 | $0.84 | +10.5% | 7.0% | 9.0% |
FAQ
7 questionsALSN Investor Questions
Common questions answered from live analyst data and company financials.
01Is Allison Transmission Holdings, Inc. (ALSN) stock a buy or sell in 2026?
Allison Transmission Holdings, Inc. (ALSN) is rated Hold by Wall Street analysts as of 2026. Of 29 analysts covering the stock, 7 rate it Buy or Strong Buy, 16 rate it Hold, and 6 rate it Sell or Strong Sell. The consensus 12-month price target is $116, implying -9.2% from the current price of $128. The bear case scenario is $117 and the bull case is $274.
02What is the ALSN stock price target for 2026?
The Wall Street consensus price target for ALSN is $116 based on 29 analyst estimates. The high-end target is $135 (+5.7% from today), and the low-end target is $98 (-23.3%). The base case model target is $153.
03Is Allison Transmission Holdings, Inc. (ALSN) stock overvalued in 2026?
ALSN trades at 14.1x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals slightly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Allison Transmission Holdings, Inc. (ALSN) stock in 2026?
The primary risks for ALSN in 2026 are: (1) Financial Leverage — Allison Transmission's trailing net debt-to-EBITDA ratio of 1. (2) Economic Volatility — The company's performance is significantly tied to demand trends in North America, where there has been a year-over-year decline in off-highway sales due to reduced demand in the energy sector. (3) Customer Concentration — Allison Transmission faces risks related to high customer concentration, which can lead to significant revenue fluctuations if key customers reduce orders. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Allison Transmission Holdings, Inc.'s revenue and earnings forecast?
Analyst consensus estimates ALSN will report consensus revenue of $4.0B (+8.8% year-over-year) and EPS of $7.83 (+21.2% year-over-year) for the upcoming fiscal year. The following year, analysts project $4.0B in revenue.
06When does Allison Transmission Holdings, Inc. (ALSN) report its next earnings?
Allison Transmission Holdings, Inc. is expected to report its next earnings on approximately 2026-05-07. Consensus expects EPS of $2.08 and revenue of $1.4B. Over recent quarters, ALSN has beaten EPS estimates 75% of the time.
07How much free cash flow does Allison Transmission Holdings, Inc. generate?
Allison Transmission Holdings, Inc. (ALSN) generated $713M in free cash flow over the trailing twelve months — a free cash flow margin of 19.5%. ALSN returns capital to shareholders through dividends (0.8% yield) and share repurchases ($328M TTM).