Key Stats for TDG Stock
- Past-30-Day Performance: -9%
- 52-Week Range: $1,184 to $1,624
- Valuation Model Target Price: $1,805
- Implied Upside: 38.5%
Value your favorite stocks like TransDigm Group Incorporated with 5 years of analysts’ forecasts using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
TransDigm Group stock fell about 9% over the last 30 days, recently trading near $1,303 per share, as investors reacted to valuation pressure and portfolio repositioning despite strong operating results.
The pullback followed fiscal Q1 results that were solid but not strong enough to drive further multiple expansion. This week, the company reported organic growth of 7.4%, commercial OEM revenue up 17%, commercial aftermarket and defense each up 7%, and an EBITDA As Defined margin of 52.4%.
Management raised fiscal 2026 guidance to midpoint revenue of $9.94 billion, up approximately 13% year over year, EBITDA As Defined of $5.21 billion, and adjusted EPS of $38.38.
CEO Michael Lisman stated, “our Q1 results ran ahead of our expectations, and we raised our sales and EBITDA As Defined guidance for the year.”
Despite the beat and raise, shares declined as investors weighed premium valuation levels and execution risks tied to OEM production ramp rates.
Capital allocation also drew attention. TransDigm announced pending acquisitions of Stellant Systems for approximately $960 million and Jet Parts Engineering and Victor Sierra Aviation for about $2.2 billion.
The company ended the quarter with roughly $2.5 billion in cash, net debt to EBITDA of 5.7x, and generated just under $900 million in free cash flow. While the acquisitions expand proprietary and PMA exposure, near-term margin dilution and leverage remain part of the investor debate.
Institutional positioning was active and mixed. Vulcan Value Partners increased its stake by 7.8% to 249,643 shares valued at about $328.98 million, Vanguard raised its position by 1.8% to 6,814,938 shares representing 12.09% ownership worth roughly $8.98 billion, and King Luther Capital boosted its stake by 35.9% to 91,855 shares valued near $121.1 million.
At the same time, JPMorgan Chase reduced its holdings by 36.7% to 1,262,316 shares worth approximately $1.66 billion, Shell Asset Management cut its position by 99.6%, Gardner Lewis Asset Management reduced exposure by 29.0%, and Citigroup trimmed its stake by 1.0%.
The combination of profit-taking, position resizing, and a premium earnings multiple appears to have driven the 9% decline over the past month.
See analysts’ growth forecasts and price targets for TransDigm Group Incorporated (It’s free) >>>
Is TDG Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 9.3%
- Operating Margins: 47.8%
- Exit P/E Multiple: 32x
Revenue is projected to grow from $8,831 million in fiscal 2025 to $13,119 million by 2030, reflecting continued commercial aerospace recovery and durable aftermarket demand.
Approximately 90% of net sales come from proprietary products, and most EBITDA is driven by aftermarket revenue, which carries structurally higher margins and provides stability across cycles.
Based on these inputs, the model estimates a target price of $1,805, implying about 38.5% total upside from current levels, indicating the stock appears modestly undervalued.
Commercial OEM ramp rates at Boeing and Airbus remain important in 2026 as production normalizes following prior disruptions.
Commercial aftermarket growth in the high single-digit range, supported by distributor POS trends and bookings running ahead of sales, reinforces revenue visibility.
Defense revenue growth in the mid to high single-digit range and expanding backlog further support earnings durability.
Net debt to EBITDA stands at 5.7x, within the company’s targeted 5 to 7x range, and free cash flow is expected to reach approximately $2.4 billion in fiscal 2026.
Sustaining margins near 52% while integrating recent acquisitions will be central to performance this year.
At current levels, TransDigm appears modestly undervalued, with 2026 results closely tied to commercial aerospace production recovery, pricing execution, and disciplined capital allocation.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does TDG Stock Have From Here?
Investors can estimate TransDigm Group Incorporated potential share price, or what any stock could be worth, in under a minute using TIKR’s New Valuation Model tool.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
