MODEL VERDICT
TransDigm Group Incorporated (TDG)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.51 | $1154.45 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.53 | $1148.18 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.50 | $1265.88 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.50 | $1274.69 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.28 | $1207.18 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 9 analyst estimates | $1575.10 | +36.4% | 20% | A- | Analyst Est. |
| EV/EBITDA 8 industry peers | $1515.27 | +31.3% | 20% | A- | Peer Data |
| Industry Median P/E 6 industry peers | $1571.41 | +36.1% | 15% | A | Peer Data |
| Price / Free Cash Flow 5 industry peers | $1354.92 | +17.4% | 15% | B+ | Peer Data |
| EV/EBIT 7 industry peers | $1564.74 | +35.5% | 8% | B+ | Peer Data |
| EV/FCF 5 industry peers | $862.21 | -25.3% | 7% | B | Model Driven |
| Peg Ratio 4 industry peers | $2988.18 | +158.8% | 5% | B | Data |
| EV To Revenue 9 industry peers | $82.46 | -92.9% | 4% | B | Data |
| Price / Sales 9 industry peers | $484.84 | -58.0% | 3% | B | Model Driven |
| Earnings Yield 8 industry peers | $1560.61 | +35.2% | 2% | B | Data |
| FCF Yield 6 industry peers | $1297.02 | +12.3% | 1% | B | Data |
| Weighted Output Blended model output | $1355.38 | +17.4% | 100% | 89 | UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 30× | 33× | 36× (Current) | 39× | 42× |
|---|---|---|---|---|---|
| Bear Case (13%) | $1082 | $1190 | $1299 | $1407 | $1515 |
| Conservative (20%) | $1157 | $1273 | $1389 | $1504 | $1620 |
| Base Case (31.1%) | $1262 | $1388 | $1514 | $1640 | $1766 |
| Bull Case (42%) | $1367 | $1503 | $1640 | $1777 | $1913 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 51.47 | 46.98 | 40.46 | 74.81 | 12.36 |
| EV/EBIT | 26.25 | 25.75 | 24.27 | 29.53 | 2.10 |
| EV/EBITDA | 23.54 | 23.24 | 20.97 | 26.95 | 2.01 |
| P/FCF | 40.72 | 42.62 | 32.00 | 46.82 | 5.75 |
| P/FFO | 34.99 | 36.11 | 31.40 | 39.83 | 3.12 |
| P/AFFO | 38.81 | 39.36 | 34.88 | 44.88 | 3.60 |
| Div Yield | 0.04 | 0.03 | 0.00 | 0.12 | 0.04 |
| P/S Ratio | 7.75 | 7.74 | 6.03 | 9.23 | 1.22 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates TDG's fair value at $1355.38 vs the current price of $1154.45, implying +17.4% upside potential. Model verdict: Undervalued. Confidence: 89/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $1355.38 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $1254.45 (P10) to $1488.24 (P90), with a median of $1370.52.
TDG's current P/E of 36.0x compares to the industry median of 49.0x (6 peers in the group). This represents a -26.5% discount to the industry. The historical average P/E is 51.5x over 7 years. Signal: Discount.
39 analysts cover TDG with a consensus rating of Buy. The consensus price target is $1617.88 (range: $1400.00 — $1871.00), implying +40.1% upside from the current price. Grade breakdown: Strong Buy (0), Buy (22), Hold (17), Sell (0), Strong Sell (0).
The model confidence score is 89/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (12), and model agreement (10). Cyclicality penalty: --8 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Margin reversion: Current net margin of 21.6% is 5.8 percentage points above the 7-year average (40.6%), with a Z-score of +1.2σ. If margins normalize, fair value could drop to ~$3108. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that TDG's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +1.2σ, meaning margins are 1.2 standard deviations above their historical average. If margins revert to the 7-year mean (40.6%), the model estimates fair value drops by 16930.0% to approximately $3108. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.