Upside case
Bull case
$2046+65.9%
TDG would need investors to value it at roughly 53x earnings — about 21x more generous than today's 32x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
TransDigm Group Incorporated (TDG) 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
Buy
Covering
39
analysts
22 bullish · 0 bearish · 39 covering TDG
Strong Buy
0
Buy
22
Hold
17
Sell
0
Strong Sell
0
Consensus Target
$1618
+31.1% vs today
Scenario Range
$970 – $2046
Model bear to bull value window
Coverage
39
Published analyst ratings
Valuation Context
31.8x
Forward P/E · Market cap $69.7B
TDG price targets
Three scenarios for where TDG stock could go
Current
~$1234
Confidence
65 / 100
Updated
May 1, 2026
Where we are now
Current · $1234
Bear
$970
Base
$1777
Bull
$2046
Market caseClosest to today
Base case
$1777+44.1%
At 46x 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
$970-21.3%
If investor confidence fades or macro conditions deteriorate, a 7x multiple contraction could push TDG down roughly 21% 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.
TransDigm Group Incorporated
TDG · NYSEIndustrialsAerospace & DefenseSeptember year-end
TransDigm is a specialized aerospace components manufacturer that designs and produces proprietary, highly engineered parts for commercial and military aircraft. It generates revenue primarily through aftermarket sales—which account for roughly 60% of its business—and original equipment manufacturing (OEM) sales, with pricing power driven by the proprietary nature of its components. The company's moat stems from its portfolio of proprietary, sole-source products that are mission-critical to aircraft operations, creating high switching costs and regulatory barriers for customers.
Market Cap
$69.7B
Revenue TTM
$9.1B
Net Income TTM
$2.0B
Net Margin
21.6%
TDG 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
83%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
+5.2%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q3 2025
EPS
$9.60/$9.89
Revenue
$2.2B/$2.3B
Q4 2025
EPS
$10.82/$10.04
Revenue
$2.4B/$2.4B
Q1 2026
EPS
$8.23/$8.10
Revenue
$2.3B/$2.3B
Q2 2026
EPS
$9.85/$9.46
Revenue
$2.5B/$2.5B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $9.60/$9.89 | -2.9% | $2.2B/$2.3B | -2.7% |
| Q4 2025 | $10.82/$10.04 | +7.8% | $2.4B/$2.4B | +1.6% |
| Q1 2026 | $8.23/$8.10 | +1.6% | $2.3B/$2.3B | +1.2% |
| Q2 2026 | $9.85/$9.46 | +4.1% | $2.5B/$2.5B | +3.1% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$10.3B
+12.6% YoY
FY2
$11.5B
+12.4% YoY
EPS Outlook
FY1
$39.88
+18.0% YoY
FY2
$46.22
+15.9% YoY
Trailing FCF (TTM)$1.9B
FCF Margin: 20.6%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
TDG beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
TDG 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 $8.8B
Product Mix
Latest annual revenue by segment or product family
Power And Control
51.6%
+15.7% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
62.7%
+10.0% YoY
Tap, hover, or focus a slice to inspect segment detail.
Power And Control is the largest disclosed segment at 51.6% of FY 2025 revenue, up 15.7% YoY.
UNITED STATES is the largest reported region at 62.7%, up 10.0% YoY.
TDG Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Undervalued
Fair value est. $1355 — implies +17.4% from today's price.
Upside to Fair Value
17.4%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
TDG
38.5x
vs
S&P 500
25.2x
+52% premium
vs Industrials Trailing P/E
TDG
38.5x
vs
Industrials
25.9x
+49% premium
vs TDG 5Y Avg P/E
Today
38.5x
vs
5Y Average
46.9x
18% discount
Forward PE
31.8x
S&P 500
19.1x
+67%
Industrials
20.8x
+53%
5Y Avg
—
—
Trailing PE
38.5x
S&P 500
25.2x
+52%
Industrials
25.9x
+49%
5Y Avg
46.9x
-18%
PEG Ratio
1.24x
S&P 500
1.75x
-29%
Industrials
1.59x
-22%
5Y Avg
—
—
EV/EBITDA
21.4x
S&P 500
15.3x
+40%
Industrials
13.9x
+54%
5Y Avg
23.1x
-7%
Price/FCF
38.4x
S&P 500
21.3x
+80%
Industrials
20.6x
+86%
5Y Avg
41.4x
-7%
Price/Sales
7.9x
S&P 500
3.1x
+152%
Industrials
1.6x
+396%
5Y Avg
7.9x
-0%
Dividend Yield
13.41%
S&P 500
1.88%
+614%
Industrials
1.24%
+984%
5Y Avg
3.77%
+255%
| Metric | TDG | S&P 500 | Industrials | 5Y Avg TDG |
|---|---|---|---|---|
| Forward PE | 31.8x | 19.1x+67% | 20.8x+53% | — |
| Trailing PE | 38.5x | 25.2x+52% | 25.9x+49% | 46.9x-18% |
| PEG Ratio | 1.24x | 1.75x-29% | 1.59x-22% | — |
| EV/EBITDA | 21.4x | 15.3x+40% | 13.9x+54% | 23.1x |
| Price/FCF | 38.4x | 21.3x+80% | 20.6x+86% | 41.4x |
| Price/Sales | 7.9x | 3.1x+152% | 1.6x+396% | 7.9x |
| Dividend Yield | 13.41% | 1.88% | 1.24% | 3.77% |
TDG trades above S&P 500 benchmarks on 5 of 6 measured multiples — commands a broad premium across most valuation dimensions.
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 toolTDG Financial Health
Verdict
Exceptional
TDG generates $1.9B in free cash flow at a 20.6% margin — 20.9% ROIC signals a durable competitive advantage · returns 14.1% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$9.1B
Revenue Growth
TTM vs prior year
+11.7%
Gross Margin
Gross profit as a share of revenue
59.0%
Operating Margin
Operating income divided by revenue
46.5%
Net Margin
Net income divided by revenue
21.6%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$33.80
Free Cash Flow (TTM)
Cash generation after capex
$1.9B
FCF Margin
FCF as share of revenue — the primary cash quality signal
20.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
20.9%
ROA
Return on assets, trailing twelve months
8.6%
Cash & Equivalents
Liquid assets on the balance sheet
$2.8B
Net Debt
Total debt minus cash
$27.2B
Debt Serviceability
Net debt as a multiple of annual free cash flow
14.5× FCF
~14.5 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
—
Shareholder Returns
How capital is returned to owners
Total shareholder yield
14.1%
Dividend
13.4%
Buyback
0.7%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$500M
Dividend / Share
Annualized trailing dividend per share
$165.45
Payout Ratio
Share of earnings distributed as dividends
464.3%
Shares Outstanding
Declining as buybacks retire shares
56M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageTDG Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
High Debt Levels
TransDigm’s debt exceeds $25 billion and is projected to reach roughly $30 billion by fiscal 2025, giving a net debt/EBITDA ratio of 5.92. This high leverage makes the company highly sensitive to interest rate changes, with rising borrowing costs already eroding net income.
High Risk
Aerospace Cycle Sensitivity
The firm’s revenue is concentrated in the aerospace and defense sector, exposing it to the cyclical nature of aircraft manufacturing sales and airline profitability. Downturns in this industry can compress gross margins and reduce net income.
High Risk
Interest Rate Sensitivity
Because of its large debt load, TransDigm faces significant refinancing risk. Higher interest rates increase borrowing costs, directly pressuring profitability and potentially forcing higher debt servicing expenses.
Medium
Supply Chain Constraints
The company relies on a narrow group of suppliers for key components, creating concentration risk. Supply chain disruptions or constraints could delay production and impact revenue.
Medium
Regulatory Scrutiny
TransDigm is frequently audited by the Department of Defense and faces accusations of "price gouging" on sole‑source parts. Legislative proposals such as the Stop Price Gouging the Military Act could limit its pricing power.
Medium
Valuation Risk
The stock trades at a premium valuation, meaning analysts expect consistent execution, healthy aftermarket demand, and successful acquisitions to sustain the multiple. Failure to meet these expectations could trigger a valuation correction.
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 TDG Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Dominant Aftermarket Pricing Power
TransDigm’s proprietary aerospace components dominate the aftermarket, where regulatory protection and criticality grant pricing power. The company offers over 400,000 SKUs, enabling it to capture premium margins.
Consistent High Growth & Margins
Since its 2006 IPO, TransDigm has delivered over 30% annual shareholder returns. Revenue grew at a 12.8% CAGR over the past decade, with operating margins around 45% and Q1 FY2026 EBITDA margin of 52.4%.
Aggressive Strategic Acquisitions
TransDigm has completed more than 90 niche aerospace acquisitions, each accretive and expanding its product portfolio. These deals generate operational synergies and reinforce its aftermarket dominance.
High Barriers & Mission-Critical Position
The aerospace aftermarket is highly fragmented, regulated, and requires complex certification, creating significant entry barriers. TransDigm’s components are essential for mission‑critical aircraft operations, ensuring sustained demand.
Strong FY2026 Guidance
For FY2026, TransDigm raised its sales guidance midpoint to $9.94 B, a 13% YoY increase, and its EBITDA guidance midpoint to $5.21 B, reflecting confidence in continued growth.
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.
TDG 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
$1233.64
52W Range Position
22%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$1123.61
+9.8% from the low
52-Week High
$1623.83
-24.0% from the high
1 Month
+3.70%
3 Month
-4.04%
YTD
-9.2%
1 Year
-11.4%
3Y CAGR
+16.9%
5Y CAGR
+15.5%
10Y CAGR
+18.6%
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.
TDG vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
31.8x
vs 49.3x median
-36% below peer median
Revenue Growth
+12.6%
vs +11.0% median
+15% above peer median
Net Margin
21.6%
vs 12.9% median
+68% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
TDG TDG TransDigm Group Incorporated | $69.7B | 31.8x | +12.6% | 21.6% | Buy | +31.1% |
HEI HEI HEICO Corporation | $25.0B | 52.8x | +14.4% | 15.4% | Buy | +25.2% |
WWD WWD Woodward, Inc. | $22.8B | 42.8x | +8.7% | 12.9% | Buy | +13.3% |
CW CW Curtiss-Wright Corporation | $27.4B | 49.3x | +11.0% | 13.8% | Buy | -4.6% |
KTO KTOS Kratos Defense & Security Solutions, Inc. | $11.5B | 79.3x | +19.2% | 2.1% | Buy | +79.7% |
DRS DRS Leonardo DRS, Inc. | $11.1B | 33.3x | +9.7% | 7.8% | Buy | +26.8% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
TDG Dividend and Capital Return
TDG returns 14.1% total yield, led by a 13.41% dividend. Buybacks add another 0.7%.
Dividend SustainableFCF Stretched
Total Shareholder Yield
14.1%
Dividend + buyback return per year
Buyback Yield
0.7%
Dividend Yield
13.41%
Payout Ratio
4.6%
How TDG Splits Its Return
Div 13.41%
Dividend 13.41%Buybacks 0.7%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$165.45
Growth Streak
Consecutive years of dividend increases
3Y
3Y Div CAGR
69.4%
5Y Div CAGR
37.5%
Ex-Dividend Date
—
Payment Cadence
Annual
1 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
$500M
Estimated Shares Retired
405.3K
Approx. Share Reduction
0.7%
Shares Outstanding
Current diluted share count from the screening snapshot
56M
At 0.7%/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 |
|---|---|---|---|---|
| 2025 | $90.00 | +20.0% | 0.7% | 13.2% |
| 2024 | $75.00 | +114.3% | 0.0% | 2.5% |
| 2023 | $35.00 | +89.2% | 0.0% | 0.1% |
| 2022 | $18.50 | — | 3.0% | 6.6% |
| 2019 | $62.50 | — | 0.0% | 5.8% |
FAQ
7 questionsTDG Investor Questions
Common questions answered from live analyst data and company financials.
01Is TransDigm Group Incorporated (TDG) stock a buy or sell in 2026?
TransDigm Group Incorporated (TDG) is rated Buy by Wall Street analysts as of 2026. Of 39 analysts covering the stock, 22 rate it Buy or Strong Buy, 17 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $1618, implying +31.1% from the current price of $1234. The bear case scenario is $970 and the bull case is $2046.
02What is the TDG stock price target for 2026?
The Wall Street consensus price target for TDG is $1618 based on 39 analyst estimates. The high-end target is $1871 (+51.7% from today), and the low-end target is $1400 (+13.5%). The base case model target is $1777.
03Is TransDigm Group Incorporated (TDG) stock overvalued in 2026?
TDG trades at 31.8x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for TransDigm Group Incorporated (TDG) stock in 2026?
The primary risks for TDG in 2026 are: (1) High Debt Levels — TransDigm’s debt exceeds $25 billion and is projected to reach roughly $30 billion by fiscal 2025, giving a net debt/EBITDA ratio of 5. (2) Aerospace Cycle Sensitivity — The firm’s revenue is concentrated in the aerospace and defense sector, exposing it to the cyclical nature of aircraft manufacturing sales and airline profitability. (3) Interest Rate Sensitivity — Because of its large debt load, TransDigm faces significant refinancing risk. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is TransDigm Group Incorporated's revenue and earnings forecast?
Analyst consensus estimates TDG will report consensus revenue of $10.3B (+12.6% year-over-year) and EPS of $39.88 (+18.0% year-over-year) for the upcoming fiscal year. The following year, analysts project $11.5B in revenue.
06When does TransDigm Group Incorporated (TDG) report its next earnings?
A confirmed upcoming earnings date for TDG is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does TransDigm Group Incorporated generate?
TransDigm Group Incorporated (TDG) generated $1.9B in free cash flow over the trailing twelve months — a free cash flow margin of 20.6%. TDG returns capital to shareholders through dividends (13.4% yield) and share repurchases ($500M TTM).