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Allison Transmission Holdings, Inc. (ALSN) is the world's largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles and a leader in electrified propulsion systems.
Investment Thesis
Allison is an industrial moat with an AI and EV kicker. Their transmissions are the global standard for refuse trucks, fire engines, and school buses due to their reliability and efficiency. While the market fears the transition to EVs, Allison is actually at the forefront, developing integrated e-axles and hybrid systems that utilize their deep drivetrain expertise. Their high-margin aftermarket business provides a massive cash flow floor that management is using to aggressively buy back stock. Allison is a high-ROE compounder that is essential to the global transportation infrastructure.
Key Growth Drivers
Commercial Drivetrain Hegemony
Allison's brand is synonymous with quality in the vocational truck market, allowing it to maintain premium pricing and near-monopolistic share in many niches.
Electrified Propulsion Growth
Their 'eGen Power' line of electric axles is seeing rapid adoption as municipalities and logistics fleets transition to zero-emission vehicles.
Aggressive Share Repurchases
Management is one of the most consistent buyers of their own stock, having retired a significant portion of the float over the last decade, turbocharging EPS growth.
Valuation & Financial Modeling
ALSN trades at an attractive multiple of its free cash flow. Given its critical role in the commercial vehicle ecosystem and its successful EV pivot, we view the stock as deeply undervalued relative to its industrial tech peers.
Risk Factors & Bear Case
A rapid, unexpected leap in battery technology that makes transmissions obsolete would be a long-term risk. Near-term, labor strikes at major truck OEMs can disrupt their delivery schedules.
Conclusion
Allison Transmission is a premier industrial franchise. It offers defensive income and significant upside from the electrification of heavy-duty transport. Rated 'Buy'.
Upcoming Catalysts
No upcoming catalysts identified.
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Relative to Consumer Discretionary Sector Median (N=442)
Metric
ALSN
Benchmark
P/E Ratio
14.3x
-41%
EV/EBITDA
13.2x
+169%
Price / Book
5.6x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-70.8%
$37.50Spot: $128.51
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Discretionary sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
39.3%
Sector: 6.2%
Dividend Analysis audit
GROWTH
1.25%
Trailing Yield
$1.25
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
18%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Allison Transmission Holdings Inc (ALSN) receives a "Hold" rating with a composite score of 51.0/100, ranked #771 out of 4446 stocks. Key factor scores: Quality 50/100, Value 46/100, Momentum 61/100. This is quantitative analysis only — not investment advice.
Allison Transmission Holdings Inc (ALSN) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Allison Transmission Holdings Inc Do?
Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium-and heavy-duty commercial vehicles, and medium-and heavy-tactical U.S. defense vehicles worldwide. It offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company markets its transmissions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. It also sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its transmissions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. The company serves customers through an independent network of approximately 1,400 independent distributor and dealer locations. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana. Allison Transmission Holdings Inc (ALSN) is classified as a mid-cap stock in the Consumer Discretionary sector, specifically within the Automobiles And Trucks industry. The company is led by CEO David S. Graziosi and employs approximately 3,500 people, headquartered in Indianapolis, Indiana. With a market capitalization of $9.9B, ALSN is one of the notable companies in the Consumer Discretionary sector.
As of April 2026, Allison Transmission Holdings Inc receives a Hold rating with a composite score of 51.0/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.ALSN ranks #771 out of 4,446 stocks in our coverage universe. Within the Consumer Discretionary sector, Allison Transmission Holdings Inc ranks #50 of 442 stocks, placing it in the top quartile of its Consumer Discretionary peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
ALSN Stock Price and 52-Week Range
Allison Transmission Holdings Inc (ALSN) currently trades at $128.51. The stock gained $1.03 (0.8%) in the most recent trading session. The 52-week high for ALSN is $128.85, which means the stock is currently trading -0.3% from its annual peak. The 52-week low is $76.01, putting the stock 69.1% above its annual trough. Recent trading volume was 788K shares, suggesting relatively thin trading activity.
Is ALSN Overvalued or Undervalued? — Valuation Analysis
Allison Transmission Holdings Inc (ALSN) carries a value factor score of 46/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 14.35x, compared to the Consumer Discretionary sector average of 24.47x — a discount of 41%. The price-to-book ratio stands at 5.64x, versus the sector average of 1.99x. The price-to-sales ratio is 3.36x, compared to 0.27x for the average Consumer Discretionary stock. On an enterprise value basis, ALSN trades at 13.21x EV/EBITDA, versus 4.91x for the sector. The EV/EBIT multiple is 13.11x.
Overall, ALSN's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
Allison Transmission Holdings Inc (ALSN) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 39.3%, compared to the Consumer Discretionary sector average of 6.2%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 13.1% versus the sector average of 2.5%.
On a margin basis, Allison Transmission Holdings Inc reports gross margins of 48.6%, compared to 36.9% for the sector. The operating margin is 31.2% (sector: 3.8%). Net profit margin stands at 23.3%, versus 2.1% for the average Consumer Discretionary stock. Revenue growth is running at -15.1% on a trailing basis, compared to 3.3% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
ALSN Debt, Balance Sheet, and Financial Health
Allison Transmission Holdings Inc has a debt-to-equity ratio of 131.0%, compared to the Consumer Discretionary sector average of 89.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 3.82x, indicating strong short-term liquidity. Total debt on the balance sheet is $2.41B. Cash and equivalents stand at $902M.
ALSN has a beta of 0.93, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for Allison Transmission Holdings Inc is 73/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
Allison Transmission Holdings Inc Revenue and Earnings History — Quarterly Trend
In TTM 2026, Allison Transmission Holdings Inc reported revenue of $3.10B and earnings per share (EPS) of $1.63. Net income for the quarter was $724M. Gross margin was 48.6%. Operating income came in at $969M.
In Q3 2025, Allison Transmission Holdings Inc reported revenue of $693M and earnings per share (EPS) of $1.63. Net income for the quarter was $137M. Gross margin was 47.5%. Revenue grew -15.9% year-over-year compared to Q3 2024. Operating income came in at $204M.
In Q2 2025, Allison Transmission Holdings Inc reported revenue of $814M and earnings per share (EPS) of $2.32. Net income for the quarter was $195M. Gross margin was 49.4%. Revenue grew -0.2% year-over-year compared to Q2 2024. Operating income came in at $256M.
In Q1 2025, Allison Transmission Holdings Inc reported revenue of $766M and earnings per share (EPS) of $2.26. Net income for the quarter was $192M. Gross margin was 49.4%. Revenue grew -2.9% year-over-year compared to Q1 2024. Operating income came in at $249M.
Over the past 8 quarters, Allison Transmission Holdings Inc has demonstrated a growth trajectory, with revenue expanding from $789M to $3.10B. Investors analyzing ALSN stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
ALSN Dividend Yield and Income Analysis
Allison Transmission Holdings Inc (ALSN) currently pays a dividend yield of 1.3%. At this yield, a $10,000 investment in ALSN stock would generate approximately $$125.00 in annual dividend income. With a net margin of 23.3%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
ALSN Momentum and Technical Analysis Profile
Allison Transmission Holdings Inc (ALSN) has a momentum factor score of 61/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 37/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 31/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
ALSN vs Competitors — Consumer Discretionary Sector Ranking and Peer Comparison
Comparing ALSN against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full ALSN vs S&P 500 (SPY) comparison to assess how Allison Transmission Holdings Inc stacks up against the broader market across all factor dimensions.
ALSN Next Earnings Date
No upcoming earnings date has been announced for Allison Transmission Holdings Inc (ALSN) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy ALSN? — Investment Thesis Summary
Allison Transmission Holdings Inc presents a balanced picture with arguments on both sides. Price momentum is positive at 61/100, suggesting the trend favors buyers. Low volatility (stability score 73/100) reduces downside risk.
In summary, Allison Transmission Holdings Inc (ALSN) earns a Hold rating with a composite score of 51.0/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on ALSN stock.
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Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-15.1%
Sector: 3.3%
-557% VS SCTR
Gross Margin
Core pricing power
48.6%
Sector: 36.9%
+32% VS SCTR
Operating Margin
Operating efficiency
31.2%
Sector: 3.8%
+731% VS SCTR
Net Margin
Bottom-line conversion
23.3%
Sector: 2.1%
+998% VS SCTR
Return on Equity
Equity capital efficiency
39.3%
Sector: 6.2%
+533% VS SCTR
Return on Assets
Asset base utilization
13.1%
Sector: 2.5%
+429% VS SCTR
Debt/Equity
Financial leverage load
131.0%
Sector: 89.0%
-47% VS SCTR
Dividend Yield
Direct cash return
1.3%
Sector: 0.0%
+Infinity% VS SCTR
+184%
Price / Sales
3.4x
+1144%
Allison Transmission Holdings Inc exhibits a 364% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
13.1%
Sector: 2.5%
Gross Margin
Pricing power and cost efficiency
48.6%
Sector: 36.9%
Operating Margin
Core business profitability
31.2%
Sector: 3.8%
Net Margin
Bottom-line profitability
23.3%
Sector: 2.1%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $125 annually in dividends at the current trailing rate.