Latest news with #ALSN
Yahoo
16-05-2025
- Business
- Yahoo
ALSN Q1 Earnings Call: Margin Expansion and International Defense Win Offset Revenue Miss
Transmission provider Allison Transmission (NYSE:ALSN) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 2.9% year on year to $766 million. On the other hand, the company's full-year revenue guidance of $3.25 billion at the midpoint came in 2% above analysts' estimates. Its non-GAAP profit of $2.32 per share was 17.2% above analysts' consensus estimates. Is now the time to buy ALSN? Find out in our full research report (it's free). Revenue: $766 million vs analyst estimates of $790.9 million (2.9% year-on-year decline, 3.2% miss) Adjusted EPS: $2.32 vs analyst estimates of $1.98 (17.2% beat) Adjusted EBITDA: $287 million vs analyst estimates of $282.3 million (37.5% margin, 1.7% beat) The company reconfirmed its revenue guidance for the full year of $3.25 billion at the midpoint EBITDA guidance for the full year is $1.2 billion at the midpoint, above analyst estimates of $1.15 billion Operating Margin: 32.5%, up from 29.7% in the same quarter last year Free Cash Flow Margin: 20.2%, similar to the same quarter last year Market Capitalization: $8.86 billion Allison Transmission's first quarter results reflected a mixed backdrop, with management citing higher pricing, continued demand for Class 8 vocational trucks, and a notable increase in defense market sales as key drivers. CEO David Graziosi pointed to the successful launch of the 3040 MX transmission for India's Future Infantry Combat Vehicle program and highlighted investments in capacity that have positioned Allison to meet stable demand despite weakness in medium-duty trucks. Gross margin gains were attributed to both price realization and the absence of prior-year labor incentives. Looking forward, management reaffirmed its full-year revenue guidance, which is above consensus estimates, and expects continued momentum from pricing, operational efficiency, and defense contracts. Graziosi addressed potential headwinds from tariffs and regulatory uncertainty, noting Allison's minimal sourcing from China and the ability to pass through most material cost changes. CFO Scott Mell emphasized a focus on capital allocation, including share repurchases and organic growth initiatives, while remaining open to strategic M&A opportunities. Management attributed the Q1 revenue decline to softness in medium-duty trucks and a dip in service parts, while growth in Class 8 vocational and defense markets, as well as successful price increases, supported margins and profitability. New CFO Appointment: Allison welcomed Scott Mell as Chief Financial Officer, bringing nearly 30 years of financial leadership experience and signaling a continued focus on disciplined capital management. International Defense Contract Win: Allison's 3040 MX transmission was selected by all OEMs for India's Future Infantry Combat Vehicle prototype, positioning the company for multi-year revenue in global defense and validating its product reliability. North America Vocational Demand: CEO Graziosi described ongoing stability in Class 8 vocational trucks, supported by municipal fleet purchasing, offsetting weakness in medium-duty markets and supporting price increases. Supply Chain Localization: Management emphasized Allison's minimal exposure to Chinese components and reliance on North American suppliers, helping mitigate trade and tariff uncertainties, and enabling effective cost pass-through with customers. Expansion of Global Service Network: The company expanded service partnerships in Japan and West Africa, aligning with rising international interest in fully automatic transmissions and improving aftermarket support. Management's outlook centers on pricing discipline, growth in defense and vocational markets, and continued operational efficiency to support margins while navigating trade and regulatory uncertainty. Pricing and Cost Pass-Through: Higher pricing and contractual material cost pass-throughs are expected to support margins, even if end-market demand remains mixed. Defense and International Growth: Multi-year defense contracts, particularly the Indian FICV program, are anticipated to provide incremental revenue and diversify Allison's end-market exposure. Tariff and Regulatory Risk Management: Management highlighted ongoing monitoring of potential tariff changes and emissions regulations, noting a flexible manufacturing footprint and product lineup designed to adapt quickly to evolving requirements. Kyle Menges (Citigroup): Asked about drivers behind margin expansion despite parts business softness; management cited price realization and lower labor-related costs from last year. Isaac Chausen (Oppenheimer): Sought insight on vocational demand strength; Graziosi pointed to municipal sales and stable Class 8 markets as key sources of resilience. Tim Thein (Raymond James): Inquired about capital allocation and potential for M&A management reiterated a balanced approach focused on organic growth, dividends, and opportunistic acquisitions. Rob Wertheimer (Melius): Asked about supply chain positioning amid trade policy changes; management highlighted high North American content and flexibility in sourcing to manage tariffs. Tami Zakaria (JPMorgan): Questioned the sustainability of recent pricing gains; management expects mid-single-digit price increases to persist through the year. Looking ahead, the StockStory team will be watching (1) execution of the Indian FICV defense contract and associated international revenues, (2) stabilization or recovery in medium-duty truck demand and aftermarket parts sales, and (3) Allison's ability to maintain margin discipline through ongoing price realization and cost management. The progression of U.S. trade and emissions policy, and any related supply chain impacts, will remain important external factors. Allison Transmission currently trades at a forward EV-to-EBITDA ratio of 10.3×. At this valuation, is it a buy or sell post earnings? The answer lies in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
14-04-2025
- Automotive
- Yahoo
Allison Transmission (ALSN): Buy, Sell, or Hold Post Q4 Earnings?
Allison Transmission trades at $89.71 per share and has stayed right on track with the overall market, losing 10.1% over the last six months while the S&P 500 is down 7.3%. This was partly driven by its softer quarterly results and might have investors contemplating their next move. Following the drawdown, is now an opportune time to buy ALSN? Find out in our full research report, it's free. Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators. We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Allison Transmission's EPS grew at a solid 9.9% compounded annual growth rate over the last five years, higher than its 3.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Allison Transmission has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company's free cash flow margin was among the best in the industrials sector, averaging 20.2% over the last five years. Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Allison Transmission's sales grew at a sluggish 3.6% compounded annual growth rate over the last five years. This wasn't a great result compared to the rest of the industrials sector, but there are still things to like about Allison Transmission. Allison Transmission's merits more than compensate for its flaws. With the recent decline, the stock trades at 10.1× forward price-to-earnings (or $89.71 per share). Is now the right time to buy? See for yourself in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
01-04-2025
- Business
- Yahoo
1 Value Stock to Target This Week and 2 to Ignore
Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they're out of favor. The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it's rotten. This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here is one value stock trading at a big discount to its intrinsic value and two best left ignored. Forward P/S Ratio: 2.7x Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software. Why Does CXM Give Us Pause? Offerings struggled to generate meaningful interest as its average billings growth of 5.5% over the last year did not impress Estimated sales growth of 3.3% for the next 12 months implies demand will slow from its three-year trend Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 1.6 percentage points Sprinklr is trading at $8.35 per share, or 2.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CXM. Forward P/E Ratio: 12.9x With notable customers such as Nike and Apple, GXO (NYSE:GXO) manages outsourced supply chains and warehousing for various companies. Why Is GXO Not Exciting? Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion Earnings per share were flat over the last two years and fell short of the peer group average High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens GXO Logistics's stock price of $39.08 implies a valuation ratio of 12.9x forward price-to-earnings. If you're considering GXO for your portfolio, see our FREE research report to learn more. Forward P/E Ratio: 10.9x Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators. Why Do We Like ALSN? Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 47.8% Share repurchases over the last two years enabled its annual earnings per share growth of 22% to outpace its revenue gains ALSN is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders At $95.67 per share, Allison Transmission trades at 10.9x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our in-depth research report, it's free. The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we're zeroing in on the stocks that could benefit immensely. Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
12-03-2025
- Business
- Yahoo
Is It Time To Consider Buying Allison Transmission Holdings, Inc. (NYSE:ALSN)?
Allison Transmission Holdings, Inc. (NYSE:ALSN), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$120 at one point, and dropping to the lows of US$96.03. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Allison Transmission Holdings' current trading price of US$97.23 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Allison Transmission Holdings's outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Allison Transmission Holdings Great news for investors – Allison Transmission Holdings is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $159.36, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Allison Transmission Holdings's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity. Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -3.3% expected over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for Allison Transmission Holdings. This certainty tips the risk-return scale towards higher risk. Are you a shareholder? Although ALSN is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to ALSN, or whether diversifying into another stock may be a better move for your total risk and return. Are you a potential investor? If you've been keeping tabs on ALSN for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 1 warning sign for Allison Transmission Holdings and you'll want to know about it. If you are no longer interested in Allison Transmission Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
