Latest news with #AllisonTransmission
Yahoo
22-05-2025
- Business
- Yahoo
3 Market-Beating Stocks to Target This Week
The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world. Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. On that note, here are three market-beating stocks that deserve a spot on your list. Five-Year Return: +315% Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products. Why Could GFF Be a Winner? Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient Incremental sales significantly boosted profitability as its annual earnings per share growth of 32.6% over the last five years outstripped its revenue performance Free cash flow margin jumped by 10 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends Griffon's stock price of $68.17 implies a valuation ratio of 11.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free. Five-Year Return: +191% 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 47.7% Highly efficient business model is illustrated by its impressive 28.8% operating margin, and its operating leverage amplified its profits over the last five years Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends Allison Transmission is trading at $103.84 per share, or 10.1x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it's free. Five-Year Return: +355% One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE:GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare. Why Will GE Beat the Market? Market share has increased this cycle as its 20.1% annual revenue growth over the last two years was exceptional Robust free cash flow margin of 16.2% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy Rising returns on capital show management is finding more attractive investment opportunities At $233.25 per share, GE Aerospace trades at 41.6x forward P/E. Is now a good time to buy? Find out 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 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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
01-05-2025
- Automotive
- Yahoo
Allison Transmission (NYSE:ALSN) Reports Sales Below Analyst Estimates In Q1 Earnings
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 GAAP profit of $2.23 per share was 8.7% above analysts' consensus estimates. Is now the time to buy Allison Transmission? Find out in our full research report. Revenue: $766 million vs analyst estimates of $790.9 million (2.9% year-on-year decline, 3.2% miss) EPS (GAAP): $2.23 vs analyst estimates of $2.05 (8.7% 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: $7.86 billion David S. Graziosi, Chair and Chief Executive Officer of Allison Transmission commented, "Allison is well-positioned to navigate current trade uncertainties, utilizing our global footprint to provide our North American customers with Made in USA products while supplying our Outside North America customers with on-highway products produced outside North America." Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators. A company's long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Allison Transmission's 3.8% annualized revenue growth over the last five years was sluggish. This wasn't a great result compared to the rest of the industrials sector, but there are still things to like about Allison Transmission. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Allison Transmission's annualized revenue growth of 6.3% over the last two years is above its five-year trend, but we were still disappointed by the results. We can better understand the company's revenue dynamics by analyzing its three most important segments: North America On-Highway, International On-Highway, and Service and Support, which are 56.8%, 14.6%, and 19.3% of revenue. Over the last two years, Allison Transmission's revenues in all three segments increased. Its North America On-Highway revenue (propulsion solutions) averaged year-on-year growth of 12.9% while its International On-Highway (propulsion solutions) and Service and Support (parts and equipment) revenues averaged 3.3% and 2.4%. This quarter, Allison Transmission missed Wall Street's estimates and reported a rather uninspiring 2.9% year-on-year revenue decline, generating $766 million of revenue. Looking ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Allison Transmission has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 28.8%. This result isn't surprising as its high gross margin gives it a favorable starting point. Analyzing the trend in its profitability, Allison Transmission's operating margin rose by 6.9 percentage points over the last five years, as its sales growth gave it operating leverage. In Q1, Allison Transmission generated an operating profit margin of 32.5%, up 2.8 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Allison Transmission's EPS grew at a remarkable 12.5% compounded annual growth rate over the last five years, higher than its 3.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Allison Transmission's earnings quality to better understand the drivers of its performance. As we mentioned earlier, Allison Transmission's operating margin expanded by 6.9 percentage points over the last five years. On top of that, its share count shrank by 25.9%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Allison Transmission, its two-year annual EPS growth of 19.3% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base. In Q1, Allison Transmission reported EPS at $2.23, up from $1.90 in the same quarter last year. This print beat analysts' estimates by 8.7%. We also like to analyze expected EPS growth based on Wall Street analysts' consensus projections, but there is insufficient data. We were impressed by Allison Transmission's optimistic full-year EBITDA guidance, which blew past analysts' expectations. We were also glad its full-year revenue guidance exceeded Wall Street's estimates. On the other hand, its revenue missed significantly and its North America On-Highway revenue fell short of Wall Street's estimates. Overall, this print was mixed but still had some key positives. The stock traded up 3.4% to $96.50 immediately after reporting. Allison Transmission put up rock-solid earnings, but one quarter doesn't necessarily make the stock a buy. Let's see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Yahoo
30-04-2025
- Automotive
- Yahoo
Earnings To Watch: Allison Transmission (ALSN) Reports Q1 Results Tomorrow
Transmission provider Allison Transmission (NYSE:ALSN) will be reporting results tomorrow after market hours. Here's what to look for. Allison Transmission beat analysts' revenue expectations by 1.4% last quarter, reporting revenues of $796 million, up 2.7% year on year. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations. Is Allison Transmission a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Allison Transmission's revenue to be flat year on year at $790.9 million, slowing from the 6.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.98 per share. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Allison Transmission has missed Wall Street's revenue estimates three times over the last two years. Looking at Allison Transmission's peers in the heavy transportation equipment segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Shyft delivered year-on-year revenue growth of 3.4%, beating analysts' expectations by 2.8%, and Wabtec reported revenues up 4.5%, falling short of estimates by 0.8%. Shyft traded up 18.1% following the results while Wabtec was also up 8%. Read our full analysis of Shyft's results here and Wabtec's results here. Investors in the heavy transportation equipment segment have had fairly steady hands going into earnings, with share prices down 1.6% on average over the last month. Allison Transmission is down 5% during the same time and is heading into earnings with an average analyst price target of $99.10 (compared to the current share price of $92.49). Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Sign in to access your portfolio
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
