# Allison Transmission Holdings (ALSN.US)

Canonical: https://gigainvestors.com/s/ALSN

Analysis as of: 2026-10-16T07:26:25.254Z. Financial observations: FY2010–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: $112.55 per share; close as of 2026-10-15.

Estimated value: low $128.57 per share, central $185.74 per share, high $217.63 per share. Buy at or below the central value $185.74 per share. Valuation as of 2026-10-16T07:26:25.254Z; scenarios are not confidence intervals.

Expected annual return: 14.4% at the stated quote. About 14.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.10×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.25×

- FY2017: 0.29×

- FY2018: 0.34×

- FY2019: 0.33×

- FY2020: 0.26×

- FY2021: 0.28×

- FY2022: 0.28×

- FY2023: 0.30×

- FY2024: 0.31×

- FY2025: 0.32×

### moat: pass

- ROIC, median of available years: 60.5%

- ROIC, second-lowest year: 44.4%

- Typical minus recent gross margin: -0.2 pp

- Typical gross margin (annual median): 48.2%

- Recent gross margin (lower of latest and 3-year median): 48.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.0%

- ROIC including acquisitions, ten-year median: 17.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 26.9%

- FY2017: 56.9%

- FY2018: 71.8%

- FY2019: 64.4%

- FY2020: 44.4%

- FY2021: 53.3%

- FY2022: 59.2%

- FY2023: 66.6%

- FY2024: 66.5%

- FY2025: 61.9%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $3.0B

- Net income, five-year total: $3.0B

- Return on incremental invested capital: 889.7%

- Working capital / revenue, annual change: 0.6 pp

- Working capital / revenue, change between three-year averages: 3.7 pp

- Working capital / revenue, final three-year average: 14.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.04×

- FY2024: 1.00×

- FY2025: 0.92×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 56.9% vs 66.5%

- Per-share earnings: 1.27 to 7.40 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -7.1%

- Ordinary dilution, 5-year annual growth: -5.7%

- Market cap gain: $2.6B

- Cumulative retained earnings: $548M

- Diluted shares, 10-year annual growth: -7.1%

- Diluted shares, 5-year annual growth: -5.7%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 24.6%

- Per-share value change: $6.12

- Per-share value, starting three-year median: $1.27

- Per-share value, ending three-year median: $7.40

- Buybacks concentrated in cheaper years (correlation): 0.58

- Average buyback yield: 7.2%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $76M

- Cumulative net income, 10 years: $5.3B

- ROIC, first three-year median: 56.9%

- ROIC, last three-year median: 66.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.27

- FY2017: $3.36

- FY2018: $4.77

- FY2019: $4.91

- FY2020: $2.62

- FY2021: $4.13

- FY2022: $5.53

- FY2023: $7.40

- FY2024: $8.31

- FY2025: $7.33

### accounting: pass

- Sloan accruals: -3.3%

- Receivables to sales index (DSRI): 0.99×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 3.3%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.32×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.54×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -8.9%

- FY2017: -3.7%

- FY2018: -4.7%

- FY2019: -5.5%

- FY2020: -5.9%

- FY2021: -4.3%

- FY2022: -2.7%

- FY2023: -2.2%

- FY2024: -1.3%

- FY2025: -3.3%

## Holders

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 1.2% a year for ten years · "Allison outlines $5.575B–$5.925B 2026 sales target following Dana Off-Highway acquisition integration" (seekingalpha.com, Feb 2026) · sales -6.7%

Story as of 2026-10-16T09:58:17.088Z; price observation 2026-10-15.

Price needs cash profits to grow 1.2% a year for ten years

- 2025-05-16: ALSN Q1 Earnings Call: Margin Expansion and International Defense Win Offset Revenue Miss ([finance.yahoo.com](https://finance.yahoo.com/news/alsn-q1-earnings-call-margin-104349632.html))

- 2025-08-13: ALSN Q2 Deep Dive: Guidance Cut Follows Mixed North America and Defense Trends ([finance.yahoo.com](https://finance.yahoo.com/news/alsn-q2-deep-dive-guidance-032140988.html))

- 2025-10-29: Allison Transmission (NYSE:ALSN) Misses Q3 Revenue Estimates, Stock Drops ([finance.yahoo.com](https://finance.yahoo.com/news/allison-transmission-nyse-alsn-misses-212245730.html))

- 2026-02-24: Allison outlines $5.575B–$5.925B 2026 sales target following Dana Off-Highway acquisition integration ([seekingalpha.com](https://seekingalpha.com/news/4555574-allison-outlines-5_575b-5_925b-2026-sales-target-following-dana-off-highway-acquisition?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-07-24: Allison Transmission Holdings (ALSN) Could Be 12% Undervalued Following EAGLE V Contract Win ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/allison-transmission-holdings-alsn-could-021033629.html))

- 2026-08-03: Allison Transmission (NYSE:ALSN) Posts Better-Than-Expected Sales In Q2 CY2026, Full-Year Sales Guidance is Optimistic ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/allison-transmission-nyse-alsn-posts-210249185.html))

### Sales · FY2024–2025

sales -6.7%; source https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm; observed 2026-02-24.

- FY2016: $1.8B 

- FY2017: $2.3B 

- FY2018: $2.7B 

- FY2019: $2.7B 

- FY2020: $2.1B 

- FY2021: $2.4B 

- FY2022: $2.8B 

- FY2023: $3.0B 

- FY2024: $3.2B 

- FY2025: $3.0B 

### Gross margin · FY2025

gross margin 48.4%; source https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm; observed 2026-02-24.

- FY2016: 47.0% 

- FY2017: 50.0% 

- FY2018: 52.4% 

- FY2019: 51.7% 

- FY2020: 48.0% 

- FY2021: 47.7% 

- FY2022: 46.8% 

- FY2023: 48.4% 

- FY2024: 47.4% 

- FY2025: 48.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in auto parts; annual sales are USD 3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm (filed 2026-02-24); FY2025: revenue 3010000000; grossProfit 1456000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ALSN.US: Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. It offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction of off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company also provides its transmissions and electric propulsion solutions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. In addition, it sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its solutions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana.

### Why customers stay

Margins ranged from 47.4% to 48.4% during 2023–25; it earns 60.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2023: grossProfit / revenue = 48.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2024: grossProfit / revenue = 47.4%.

- Source: https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm (filed 2026-02-24); FY2025: grossProfit / revenue = 48.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); 10-year return on capital observations [[2016,0.26855575868372944],[2017,0.5694471160094616],[2018,0.7183010595542565],[2019,0.6441880930517294],[2020,0.4435314510483683],[2021,0.5329428303655107],[2022,0.5915972118602519],[2023,0.6659556529894338],[2024,0.6653655761546261],[2025,0.6190098358780808]]; median 0.6053035238691664. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 47% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm (filed 2026-02-24); Gross margin observations: [[2021,0.47668609492089925],[2022,0.4684001444564825],[2023,0.4843492586490939]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 328 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2016: growth capex 0; upkeep 70600000; owner earnings 320400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2017: growth capex 0; upkeep 91000000; owner earnings 583000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2018: growth capex 0; upkeep 100000000; owner earnings 703000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2019: growth capex 0; upkeep 172000000; owner earnings 599000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2020: growth capex 0; upkeep 115000000; owner earnings 332000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2021: growth capex 25000000; upkeep 150000000; owner earnings 442000000. Growth capex / owner earnings = 0.05656108597285068.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2022: growth capex 12000000; upkeep 155000000; owner earnings 531000000. Growth capex / owner earnings = 0.022598870056497175.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2023: growth capex 0; upkeep 125000000; owner earnings 702000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2024: growth capex 22000000; upkeep 121000000; owner earnings 731000000. Growth capex / owner earnings = 0.030095759233926128.

- Source: https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm (filed 2026-02-24); FY2025: growth capex 0; upkeep 175000000; owner earnings 572000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Dividend observations: [[2016,100600000],[2017,89000000],[2018,80000000],[2019,73000000],[2020,78000000],[2021,81000000],[2022,80000000],[2023,83000000],[2024,87000000],[2025,91000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm (filed 2026-02-24); FY2025: cash repurchases 328000000 USD.

### Are managers owners

Insiders own 0.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ALSN.US SharesStats.PercentInsiders = 0.733 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 1.2% yearly over ten years; actual growth was 14.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Ten-year compound average after fade. Initial solved rate -0.006403856887858328. Price 112.55; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.7451977401129943 → FY2025 6.729411764705882. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $29.29 per share

- 2016-11: $33.17 per share

- 2016-12: $33.69 per share

- 2017-01: $34.98 per share

- 2017-02: $35.98 per share

- 2017-03: $36.06 per share

- 2017-04: $38.68 per share

- 2017-05: $38.72 per share

- 2017-06: $37.51 per share

- 2017-07: $37.80 per share

- 2017-08: $34.73 per share

- 2017-09: $37.53 per share

- 2017-10: $42.49 per share

- 2017-11: $41.04 per share

- 2017-12: $43.07 per share

- 2018-01: $44.24 per share

- 2018-02: $39.63 per share

- 2018-03: $39.06 per share

- 2018-04: $38.99 per share

- 2018-05: $41.31 per share

- 2018-06: $40.49 per share

- 2018-07: $47.00 per share

- 2018-08: $49.66 per share

- 2018-09: $52.01 per share

- 2018-10: $44.08 per share

- 2018-11: $47.11 per share

- 2018-12: $43.91 per share

- 2019-01: $48.67 per share

- 2019-02: $49.70 per share

- 2019-03: $44.92 per share

- 2019-04: $46.86 per share

- 2019-05: $41.39 per share

- 2019-06: $46.35 per share

- 2019-07: $45.95 per share

- 2019-08: $44.43 per share

- 2019-09: $47.05 per share

- 2019-10: $43.61 per share

- 2019-11: $48.40 per share

- 2019-12: $48.32 per share

- 2020-01: $44.20 per share

- 2020-02: $40.60 per share

- 2020-03: $32.61 per share

- 2020-04: $36.34 per share

- 2020-05: $37.72 per share

- 2020-06: $36.78 per share

- 2020-07: $37.36 per share

- 2020-08: $35.87 per share

- 2020-09: $35.14 per share

- 2020-10: $36.15 per share

- 2020-11: $41.05 per share

- 2020-12: $43.13 per share

- 2021-01: $40.70 per share

- 2021-02: $37.92 per share

- 2021-03: $40.83 per share

- 2021-04: $41.47 per share

- 2021-05: $42.31 per share

- 2021-06: $39.74 per share

- 2021-07: $39.91 per share

- 2021-08: $36.98 per share

- 2021-09: $35.32 per share

- 2021-10: $33.36 per share

- 2021-11: $34.59 per share

- 2021-12: $36.35 per share

- 2022-01: $37.99 per share

- 2022-02: $39.94 per share

- 2022-03: $39.26 per share

- 2022-04: $37.44 per share

- 2022-05: $40.01 per share

- 2022-06: $38.45 per share

- 2022-07: $41.87 per share

- 2022-08: $36.26 per share

- 2022-09: $33.76 per share

- 2022-10: $42.25 per share

- 2022-11: $44.80 per share

- 2022-12: $41.60 per share

- 2023-01: $45.08 per share

- 2023-02: $47.50 per share

- 2023-03: $45.24 per share

- 2023-04: $48.79 per share

- 2023-05: $47.30 per share

- 2023-06: $56.46 per share

- 2023-07: $58.69 per share

- 2023-08: $60.45 per share

- 2023-09: $59.06 per share

- 2023-10: $50.42 per share

- 2023-11: $53.48 per share

- 2023-12: $58.15 per share

- 2024-01: $60.54 per share

- 2024-02: $75.33 per share

- 2024-03: $81.16 per share

- 2024-04: $73.55 per share

- 2024-05: $75.81 per share

- 2024-06: $75.90 per share

- 2024-07: $88.59 per share

- 2024-08: $92.75 per share

- 2024-09: $96.07 per share

- 2024-10: $106.86 per share

- 2024-11: $118.50 per share

- 2024-12: $108.06 per share

- 2025-01: $117.54 per share

- 2025-02: $101.75 per share

- 2025-03: $95.67 per share

- 2025-04: $92.24 per share

- 2025-05: $103.52 per share

- 2025-06: $94.99 per share

- 2025-07: $90.07 per share

- 2025-08: $87.31 per share

- 2025-09: $84.88 per share

- 2025-10: $82.55 per share

- 2025-11: $88.66 per share

- 2025-12: $97.90 per share

- 2026-01: $108.70 per share

- 2026-02: $125.30 per share

- 2026-03: $117.06 per share

- 2026-04: $134.35 per share

- 2026-05: $113.53 per share

- 2026-06: $112.74 per share

- 2026-07: $114.54 per share

- 2026-08: $125.71 per share

- 2026-09: $113.26 per share

- 2026-10: $112.55 per share

## Annual estimated value (USD per share)

- FY2016: low $20.97 per share, central $23.73 per share, high $27.39 per share

- FY2017: low $28.69 per share, central $32.51 per share, high $37.59 per share

- FY2018: low $39.85 per share, central $45.16 per share, high $52.23 per share

- FY2019: low $54.35 per share, central $61.69 per share, high $71.46 per share

- FY2020: low $46.65 per share, central $52.76 per share, high $60.89 per share

- FY2021: low $55.21 per share, central $62.72 per share, high $72.72 per share

- FY2022: low $62.30 per share, central $70.63 per share, high $81.73 per share

- FY2023: low $98.30 per share, central $140.91 per share, high $164.67 per share

- FY2024: low $110.19 per share, central $157.01 per share, high $183.12 per share

- FY2025: low $115.49 per share, central $160.72 per share, high $185.96 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1411207/000119312526065627/alsn-20251231.htm); period 2025-12-31, filed 2026-02-24.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.