NYSE · Industrials

TransDigm Group Incorporated

TDG · Aerospace & Defense

$1,328.31

▲ 11.56 (0.88%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

A⤢

Gross Profit Margin 59.4%

Operating Margin 46.7%

Net Income Margin 21.0%

Fin. Health

D⤢

Years to Pay Off Debt 59.8 yrs

Working Capital vs Long-Term Debt -$25.0B

Working Capital $6.1B

Valuation

D⤢

Price-to-Book N/A (neg. equity)

Cash Flow

A⤢

Free Cash Flow $64M

CapEx % of Net Income 13.3%

Owner Earnings $711M

Profitability

Gross Profit Margin 59.4%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 46.7%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 21.0%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 59.8 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$25.0B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital $6.1B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $64M

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 13.3%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $711M

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About TransDigm Group Incorporated

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, cargo loading and handling systems, delivery systems, and electronic components. Its Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, parachutes, specialized flight, wind tunnel and jet engine testing services and equipment, and testing and instrumentation solutions, as well as engineered audio, radio, and antenna systems. The Non-Aviation segment offers seat belts and safety restraints; mechanical/electromechanical actuators and controls; hydraulic/electromechanical actuators and fuel valves; refueling systems; and turbine controls. It serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots; airframe manufacturers, cabin system and subsystem suppliers, airlines, and third party maintenance suppliers; and off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers, as well as manufacturers of heavy equipment. The company was formerly known as TD Holding Corporation and changed its name to TransDigm Group Incorporated in 2006. The company was founded in 1993 and is headquartered in Cleveland, Ohio.

Market Data

Market Cap $74.3B

Enterprise Value $100.9B

P/E (TTM) 41.50

Dividend Yield N/A

Exchange NYSE

Key Margins

Gross Profit 59.4%

Operating Margin 46.7%

Net Margin 21.0%

Company Info

Sector Industrials

Industry Aerospace & Defense

Employees 16500

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering TransDigm Group Incorporated at $1,328.31.

The business passes only 3 of 7 of Graham's defensive criteria — well below his required standard.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Gross Profit %	59.4%▲	59.2%•	N/A
Operating Margin %	46.7%▲	45.8%•	N/A
Net Income %	21.0%▲	19.5%•	N/A
Diluted EPS	9.20▲	6.62•	N/A

Balance Sheet Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Total Assets	$25.4B	$23.8B	N/A
Total Debt	$32.0B▲	$30.0B•	N/A
Working Capital	$6.1B▲	$4.4B•	N/A
Years to Pay Debt	59.82	67.52	N/A

Cash Flow Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Free Cash Flow	$64M▼	$772M•	N/A
Owner Earnings	$711M	$605M	N/A
CapEx % of Net Income	13.3%	13.5%	N/A

Income Statement

	2026	2025	2024
Tax Effect Of Unusual Items	-2,106	-1,110
Tax Rate For Calcs	0	0
Normalized EBITDA	1,298,000	1,152,000
Total Unusual Items	-9,000	-5,000
Total Unusual Items Excluding Goodwill	-9,000	-5,000
Net Income From Continuing Operation Net Minority Interest	535,000	445,000
Reconciled Depreciation	105,000	100,000
Reconciled Cost Of Revenue	988,000	889,000
EBITDA	1,289,000	1,147,000
EBIT	1,184,000	1,047,000
Net Interest Income	-484,000	-475,000
Interest Expense	484,000	475,000
Normalized Income	541,894	448,890
Net Income From Continuing And Discontinued Operation	535,000	445,000
Total Expenses	1,357,000	1,238,000
Total Operating Income As Reported	1,178,000	1,042,000
Diluted Average Shares	58,200	58,200
Basic Average Shares	58,200	58,200
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	535,000	386,000
Net Income Common Stockholders	535,000	386,000
Otherunder Preferred Stock Dividend	0	59,000
Net Income	535,000	445,000
Minority Interests	-1,000	0
Net Income Including Noncontrolling Interests	536,000	445,000
Net Income Continuous Operations	536,000	445,000
Tax Provision	164,000	127,000
Pretax Income	700,000	572,000
Other Income Expense	-3,000		19,000
Other Non Operating Income Expenses	6,000	5,000	23,000
Special Income Charges	-9,000	-5,000
Write Off
Restructuring And Mergern Acquisition	9,000	5,000
Net Non Operating Interest Income Expense	-484,000	-475,000
Total Other Finance Cost
Interest Expense Non Operating	484,000	475,000
Operating Income	1,187,000	1,047,000
Operating Expense	324,000	305,000
Depreciation Amortization Depletion Income Statement	60,000	56,000
Depreciation And Amortization In Income Statement	60,000	56,000
Amortization	60,000	56,000
Amortization Of Intangibles Income Statement	60,000	56,000
Selling General And Administration	264,000	249,000
General And Administrative Expense	264,000	249,000
Other Gand A	240,000	225,000
Salaries And Wages	24,000	24,000
Gross Profit	1,511,000	1,352,000
Cost Of Revenue	1,033,000	933,000
Total Revenue	2,544,000	2,285,000
Operating Revenue	2,544,000	2,285,000

Balance Sheet

	2026	2025	2024
Treasury Shares Number	6,777	6,175
Ordinary Shares Number	55,973	56,398
Share Issued	62,750	62,573
Net Debt	28,119,000	27,518,000
Total Debt	32,003,000	30,046,000
Tangible Book Value	-24,284,000	-24,128,000
Invested Capital	22,601,000	20,776,000
Working Capital	6,139,000	4,436,000
Net Tangible Assets	-24,284,000	-24,128,000
Capital Lease Obligations
Common Stock Equity	-9,402,000	-9,270,000
Total Capitalization	21,748,000	19,927,000
Total Equity Gross Minority Interest	-9,394,000	-9,263,000
Minority Interest	8,000	7,000
Stockholders Equity	-9,402,000	-9,270,000
Gains Losses Not Affecting Retained Earnings	-20,000	22,000
Other Equity Adjustments	-20,000	22,000
Treasury Stock	3,040,000	2,312,000
Retained Earnings	-9,639,000	-10,168,000
Additional Paid In Capital	3,296,000	3,187,000
Capital Stock	1,000	1,000
Common Stock	1,000	1,000
Total Liabilities Net Minority Interest	34,836,000	33,020,000
Total Non Current Liabilities Net Minority Interest	32,396,000	30,485,000
Other Non Current Liabilities	531,000	567,000
Non Current Deferred Liabilities	715,000	721,000
Non Current Deferred Taxes Liabilities	715,000	721,000
Long Term Debt And Capital Lease Obligation	31,150,000	29,197,000
Long Term Debt	31,150,000	29,197,000
Current Liabilities	2,440,000	2,535,000
Other Current Liabilities
Current Deferred Liabilities
Current Deferred Revenue
Current Debt And Capital Lease Obligation	853,000	849,000
Current Capital Lease Obligation
Current Debt	853,000	849,000
Other Current Borrowings	853,000	849,000
Pensionand Other Post Retirement Benefit Plans Current
Current Provisions
Payables And Accrued Expenses	1,587,000	1,686,000
Current Accrued Expenses	1,162,000	1,301,000
Interest Payable
Payables	425,000	385,000
Dividends Payable			0
Total Tax Payable
Income Tax Payable
Accounts Payable	425,000	385,000
Total Assets	25,442,000	23,757,000
Total Non Current Assets	16,863,000	16,786,000
Other Non Current Assets	303,000	275,000
Goodwill And Other Intangible Assets	14,882,000	14,858,000
Other Intangible Assets	3,844,000	3,783,000
Goodwill	11,038,000	11,075,000
Net PPE	1,678,000	1,653,000
Accumulated Depreciation
Gross PPE
Construction In Progress
Machinery Furniture Equipment
Buildings And Improvements
Land And Improvements
Current Assets	8,579,000	6,971,000
Other Current Assets	575,000	506,000
Inventory	2,400,000	2,373,000
Inventories Adjustments Allowances			-239,000
Finished Goods	253,000	272,000
Work In Process	681,000	643,000
Raw Materials	1,466,000	1,458,000
Receivables	1,720,000	1,564,000
Accounts Receivable	1,720,000	1,564,000
Allowance For Doubtful Accounts Receivable		-29,000	-35,000
Gross Accounts Receivable		1,593,000	1,320,000
Cash Cash Equivalents And Short Term Investments	3,884,000	2,528,000
Cash And Cash Equivalents	3,884,000	2,528,000

Cash Flow

	2026	2025	2024
Free Cash Flow	64,000	772,000
Repurchase Of Capital Stock	-615,000	-106,000
Repayment Of Debt			0
Issuance Of Debt	1,980,000	0
Capital Expenditure	-71,000	-60,000
Interest Paid Supplemental Data	658,000	185,000
Income Tax Paid Supplemental Data	259,000	58,000
End Cash Position	3,884,000	2,528,000
Beginning Cash Position	2,528,000	2,808,000
Effect Of Exchange Rate Changes	-5,000	2,000
Changes In Cash	1,361,000	-282,000
Financing Cash Flow	1,390,000	-141,000
Cash Flow From Continuing Financing Activities	1,390,000	-141,000
Net Other Financing Charges	-1,000	-5,000
Proceeds From Stock Option Exercised	54,000	29,000
Cash Dividends Paid	0	-59,000
Common Stock Dividend Paid	0	-59,000
Net Common Stock Issuance	-615,000	-106,000
Common Stock Payments	-615,000	-106,000
Net Issuance Payments Of Debt	1,952,000	0
Net Short Term Debt Issuance	0	0
Short Term Debt Issuance	0	0
Net Long Term Debt Issuance			0
Long Term Debt Payments			0
Long Term Debt Issuance			0
Investing Cash Flow	-164,000	-973,000
Cash Flow From Continuing Investing Activities	-164,000	-973,000
Net Other Investing Changes	0	-6,000
Net Business Purchase And Sale	-93,000	-907,000
Purchase Of Business	-93,000	-907,000
Capital Expenditure Reported	-71,000	-60,000
Operating Cash Flow	135,000	832,000
Cash Flow From Continuing Operating Activities	135,000	832,000
Change In Working Capital	-544,000	250,000
Change In Other Current Assets	-37,000	-16,000
Change In Payables And Accrued Expense	-270,000	268,000
Change In Accrued Expense	-240,000	223,000
Change In Interest Payable	-194,000	270,000
Change In Payable	-30,000	45,000
Change In Account Payable	40,000	-25,000
Change In Tax Payable		70,000	91,000
Change In Income Tax Payable		70,000	91,000
Change In Inventory	-49,000	-96,000
Change In Receivables	-188,000	94,000
Changes In Account Receivables	-159,000	94,000
Other Non Cash Items	12,000	11,000
Stock Based Compensation	26,000	27,000
Deferred Tax	0	-1,000
Deferred Income Tax	0	-1,000
Depreciation Amortization Depletion	105,000	100,000
Depreciation And Amortization	105,000	100,000
Amortization Cash Flow	61,000	56,000
Amortization Of Intangibles	61,000	56,000
Depreciation	44,000	44,000
Operating Gains Losses			-19,000
Net Foreign Currency Exchange Gain Loss			-20,000
Gain Loss On Sale Of Business	0	0
Net Income From Continuing Operations	536,000	445,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $2.1B ▲ $2.5B +18.3%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 59.3% ▲ 59.4% +0.1pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 55.2% ▲ 46.7% -8.6pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 22.3% ▲ 21.0% -1.2pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$2.5B/qtr (≈$10.2B ann.)

vs > $1.5B annualised revenue

✅ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

3.52x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$64M

vs Positive

Operating Cash Flow

$135M

Latest quarter · Buffett's cash reality check

ROIC

4.1%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

⚠ Negative Net Assets

Net Assets: -$9.4B

⚠ Negative Net Assets — total liabilities exceed total assets on paper. This is common in companies that aggressively return capital via buybacks and dividends (Apple, McDonald's, Domino's). It does not indicate insolvency if the business generates strong, consistent free cash flow. Focus on FCF and earnings power rather than balance sheet book value for these companies.

⚠️ Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.

Peers & Industry Comparison

Aerospace & Defense — Auto-detected peers

Company	Price	Market Cap	P/E	Gross Margin	Net Margin	Revenue
TDG	$1,328.31	$74.3B	41.50	59.4%	21.0%	$2.5B
BA Boeing Company (The)	$222.72	$175.6B	88.0	4.8%	2.5%	$92.2B
LMT Lockheed Martin Corporation	$510.95	$117.8B	24.8	9.9%	6.4%	$75.1B
RTX RTX Corporation	$185.60	$249.9B	34.9	20.2%	8.0%	$90.4B
NOC Northrop Grumman Corporation	$521.50	$74.1B	16.3	20.5%	10.8%	$42.4B
GD General Dynamics Corporation	$350.01	$94.7B	21.8	15.2%	8.1%	$53.8B

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.40%

Low — management has little skin in the game

Return on Assets (ROA)

2.1%

Fair — average asset utilization

Share Buybacks (Latest Year)

$500M

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+6.5% YoY

Debt is roughly stable

Leadership Team

Michael Lisman

CEO, President & Director

Age 41

Pay: $28,530,024

5.333% of net income

Sarah Wynne

Chief Financial Officer

Age 52

Pay: $11,399,291

2.131% of net income

Joel Reiss

Co-Chief Operating Officer

Age 55

Pay: $31,053,671

5.804% of net income

Patrick Joseph Murphy

Co-Chief Operating Officer

Age 52

Pay: $13,843,634

2.588% of net income

Kevin McHenry

Executive Vice President

Top Institutional Holders

Institution	% Owned	Shares
Capital International Investors	9.82%	5,494,695
Capital World Investors	8.34%	4,666,491
Blackrock Inc.	8.23%	4,601,252
Vanguard Capital Management LLC	6.56%	3,669,729
Capital Research Global Investors	5.62%	3,143,509
Vanguard Portfolio Management LLC	4.60%	2,573,087
State Street Corporation	4.50%	2,516,606
Principal Financial Group, Inc.	3.60%	2,013,784

Risk Analysis

Beta (Market Risk)

0.90

Low volatility — more stable than the market

Short Interest

2.5% of float

Low short interest — market is not heavily bearish

Current Ratio

3.52x

Strong liquidity — Graham approved

52-Week Price Range

Low: $1,123.61 Current: $1,328.31 High: $1,623.83

Currently at 41% of 52-week range

TransDigm Group Incorporated

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry Comparison

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis