Allison Transmission Holdings, Inc. (ALSN) AI Stock Analysis

Headquartered in Indianapolis, Indiana, Allison Transmission Holdings, Inc. designs, manufactures, and distributes fully automatic transmissions for medium- and heavy-duty commercial vehicles as well as medium- and heavy-tactical U.S. defense vehicles. Its transmissions serve applications such as refuse collection, construction, distribution, fire response, school and transit buses, motor homes, and off-highway energy and mining equipment. The company also offers transmissions for wheeled and tracked defense vehicles, electric propulsion solutions for alternative energy transport, and remanufactured transmissions under the ReTran brand. In addition, Allison provides branded replacement parts, support equipment, and aluminum die cast components to support its installed base.

Allison Transmission experienced revenue growth from $2.40B in FY2021 to $3.23B in FY2024 before revenue fell 6.7% to $3.01B in FY2025. Despite the annual decline, operating margin expanded from 27.9% in FY2021 to 32.3% in FY2025. Net income was $623.0M in FY2025, down from $731.0M in FY2024, yielding diluted EPS of $7.47. Over the 5-year period from FY2020 to FY2025, revenue grew at a CAGR of 7.7%. For the trailing twelve months ended June 30, 2026, revenue stood at $4.40B with an operating margin of 19.1%. In the latest quarter ended June 30, 2026, revenue rose 92.4% year-over-year while quarterly earnings declined 6.1%.

As of June 30, 2026, Allison Transmission held $399.0M in cash and short-term investments against $4.11B in total debt, resulting in net debt of $3.71B. Shareholders' equity was $1.98B, yielding a debt-to-equity ratio of 2.08, while total assets stood at $8.72B with a current ratio of 1.81. In FY2025, the company generated $824.0M in operating cash flow and deployed capital toward $175.0M in capital expenditures, $328.0M in share buybacks, and $91.0M in dividends paid. Its share count declined 18.1% over five years.

Allison Transmission trades at a trailing price-to-earnings ratio of 17.8x, compared to 18.0x for the median of its US-listed Consumer Cyclical peers. Its forward P/E of 10.2x sits below the peer median of 14.1x, while its enterprise value-to-EBITDA ratio of 12.2x compares to the peer median of 11.1x. The stock has a price-to-sales ratio of 2.1x and a PEG ratio of 0.52. Over the past year, ALSN gained 38.2%, outperforming the 16.8% return of the S&P 500 benchmark, and has risen 243.1% over five years versus 83.0% for the index.

Allison Transmission pays a forward annual dividend of $1.16 per share, representing a 1.04% dividend yield and a payout ratio of 13.8%. The company has distributed dividends for 15 consecutive years and recorded a 5-year annualized dividend growth rate of 9.7%. Its last ex-dividend date was August 21, 2026.

Wall Street coverage includes 5 Strong Buy, 1 Buy, 4 Hold, and 1 Sell ratings. The mean price target is $138.91, representing upside of 24.2% above the last closing price of $111.80. For the fiscal year ending December 31, 2026, analysts estimate revenue of $5.94B and EPS of $9.95, representing 31.2% EPS growth. The company beat EPS estimates in 2 of the last 4 quarters, and the next earnings date is November 4, 2026.

This page is an AI-written research summary of Allison Transmission Holdings, Inc. (ALSN). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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