TransDigm Group Inc Dossier - Source-backed chat

TransDigm Group Inc

TDGNYSE

SectorIndustrials

IndustryAerospace & Defense

Beta (adjusted)0.95

Intrinsic Value $1,512.73median of 5 methods · middle span $1,111-$1,781based on filings through 27 Jun 2026

Market Price $1,082.60Price as of 30 Sep 2026

UndervaluedIntrinsic value is 40% above the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $59.8B

Shares Outstanding 57.9M diluted

Next Earnings Date5 Nov 2026

Last ex-dividend2 Sep 2025

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

TransDigm entered the final quarter of fiscal 2026 with strong operating momentum: third-quarter net sales increased 23%, organic sales increased 13%, commercial aftermarket revenue increased 17%, and all three principal market channels achieved double-digit growth. Management raised full-year sales, EBITDA As Defined, and adjusted EPS guidance, supporting confidence in the durability of the company's proprietary aerospace-component model. The offset is balance-sheet and execution risk. Long-term debt stood at $32.621 billion, quarterly net interest expense reached $514 million, reported EBITDA As Defined margin declined to 52.8% from 54.4% as acquisition dilution affected the comparison, and the company continues to deploy substantial capital into acquisitions and repurchases.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets19 analysts · as of 18 Aug 2026

Low · most bearish analyst$1,350.00

Mean target$1,522.79

High · most bullish analyst$1,972.00

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$1,350.0020%

Commercial flight-hour or OEM momentum weakens, defense conversion slows, acquisition integration takes longer than expected, and margin falls below 50%. With substantial debt and a high quarterly interest burden, weaker operating growth could reduce capital-allocation flexibility and make additional debt-funded acquisitions or repurchases less attractive.

Base CaseCentral scenario

$1,522.7957%

Matches the consensus mean

Growth moderates toward management's fiscal 2026 channel assumptions while EBITDA As Defined margin remains near the approximately 52.5% guide. Acquisitions contribute revenue but temporarily dilute consolidated margins, and capital allocation remains split among acquisitions, repurchases, and liquidity preservation.

Bull CaseUpside scenario

$1,972.0023%

Commercial aftermarket growth remains in the mid-to-high teens, OEM build-rate increases continue, defense backlog converts on schedule, and base-business margin expansion offsets acquisition dilution. Successful integration of Jet Parts Engineering, Victor Sierra, and any completed Prince & Izant transaction would add proprietary aftermarket exposure and support continued earnings growth.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Third-quarter organic sales growth was 13%, with double-digit growth across commercial OEM, commercial aftermarket, and defense.
Commercial aftermarket revenue increased 17%, demonstrating strong demand from the installed aircraft base.
Management raised fiscal 2026 guidance to net sales of $10.47-$10.55 billion, EBITDA As Defined of $5.49-$5.55 billion, and adjusted EPS of $40.62-$41.46.
The company repurchased approximately $1.0 billion of shares during the third quarter and more than $1.8 billion during the first thirty-nine weeks of fiscal 2026.

Key Investment Risks

Long-term debt was $32.621 billion at June 27, 2026, while third-quarter net interest expense was $514 million.
Third-quarter EBITDA As Defined margin declined to 52.8% from 54.4% in the prior-year quarter, although management attributed consolidated dilution to acquisitions and reported base-business expansion.
The approximately $2.2 billion Jet Parts Engineering and Victor Sierra acquisition increases integration demands, while the approximately $1.066 billion Prince & Izant agreement remains subject to regulatory approval and customary closing conditions.
Results remain sensitive to commercial flight hours, aircraft-production rates, defense budgets, supply constraints, input and labor costs, customer concentration, and government oversight.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.