TransDigm Group Incorporated TDG
TransDigm posted a strong Q3 2026 earnings beat (EPS $10.87 vs. $10.29 consensus) and raised its fiscal 2026 sales, EBITDA, and commercial aftermarket outlook, confirming the franchise's pricing power across commercial OEM, aftermarket, and defense. However, the stock trades at 37.1x trailing PE — 33% above the peer median of 27.8x — and 6.8x price-to-sales, 95% above peers, while sitting below both its 50-day ($1,268) and 200-day ($1,277) moving averages with negative MACD as of 2026-08-19.
With total debt at $30.0B against negative book equity of -$9.7B (as of FY2025 ended 2025-09-30) and persistent insider net selling of $291M over 24 months, the strong fundamentals are already largely reflected in the multiple; the risk/reward stays balanced.
What could go wrong
- Leverage and balance sheet. Total debt reached $30.0B as of FY2025 (ended 2025-09-30) against negative stockholders' equity of -$9.7B; rising rates or a downturn in aftermarket demand could pressure refinancing and FCF available for debt reduction.
- Valuation compression. At 37.1x trailing PE and 6.8x PS — 33% and 95% above peer medians respectively — any guidance miss or macro scare could trigger multiple contraction given the stock already trades below its 50- and 200-day moving averages.
- Persistent insider selling. Over the trailing 24 months insiders net sold 198,118 shares worth $291M (589 dispositions vs. 90 acquisitions); founder Howley continued selling on 2026-08-18 at ~$1,228-$1,241 per share.
- Technical deterioration. As of 2026-08-19, RSI is 43.6, MACD histogram is negative (-1.66), and the stock at $1,222.91 trades below both MA50 ($1,268) and MA200 ($1,277), suggesting waning near-term momentum despite the earnings beat.
What would change my mind
Where this comes from: Zacks news article, 2026-08-04 · Defense World / MarketBeat news, 2026-08-09/11 · FMP fundamentals, FY ended 2025-09-30 · FMP fundamentals, FY ended 2025-09-30. Orin's read on TDG; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All TDG filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Capital World Investors | $5.7B | 0.7% of fund |
| Vanguard Capital Management | $4.9B | 0.1% of fund |
| Capital Research Global Investors | $4.2B | 0.6% of fund |
| Vanguard Portfolio Management | $3.4B | 0.2% of fund |
| State Street | $3.4B | 0.1% of fund |
| Geode Capital Management | $1.7B | 0.1% of fund |
104 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 719 Form 4 filings, net −$295.0M. Of the 50 on hand, 0 were open-market purchases and 35 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about TDG
Orin answers questions about TDG from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 33.5× | 37.2× | 44.5× |
| EV/EBITDA | 18.6× | 22.8× | — |
| P/S | 6.18× | 7.60× | — |
Its P/E sits below all 5 of the last 5 years (−1.19σ from its own mean).
14.9%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $1.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$1465
$1331 – $1695 · +33% against today's price
- 20 buy or overweight
- 19 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
| CTASCintas Corporation | $77B | 37.4× | 26.8× | 51.0% | 17.8% | 42% |
| EMREmerson Electric Co. | $87B | 33.7× | 19.1× | 53.2% | 13.8% | 13% |
| GDGeneral Dynamics Corporation | $93B | 20.6× | 15.2× | 15.4% | 8.2% | 17% |
| ITWIllinois Tool Works Inc. | $79B | 24.7× | 18.9× | 44.2% | 19.4% | 102% |
| JCIJohnson Controls International plc | $88B | 25.3× | 27.0× | 36.7% | 14.3% | 27% |
| LHXL3Harris Technologies, Inc. | $45B | 24.0× | 14.6× | 25.5% | 8.2% | 9% |
| NOCNorthrop Grumman Corporation | $73B | 16.3× | 11.7× | 20.1% | 10.5% | 27% |
| PWRQuanta Services, Inc. | $95B | 71.8× | 33.5× | 14.4% | 4.1% | 15% |
| VRTVertiv Holdings Co | $96B | 55.0× | 38.1× | 37.5% | 15.1% | 42% |
The median is of the 9 peers listed above and nothing else — check it against the column. This company trades 32.6% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $2357 | $1228.77 · +92% | 2026-06-10 |
| Levered DCF | $1300 | $1228.77 · +6% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.