What are the investment strengths of TransDigm Group Inc (TDG)?

Monopolistic pricing on 90%+ sole-source aftermarket parts generates 47% operating margins - 13x industry median with minimal reinvestment needs 5.2B special dividend TTM demonstrates confidence in cash generation; debt/EBITDA of 6.6x manageable given recurring aftermarket revenue

What are the investment risks for TransDigm Group Inc (TDG)?

30B debt at rising rates with negative 9.7B equity - 1.6B annual interest consumes 75% of net income; refinancing risk if rates stay elevated P/E 41.6x vs industry 21.4x median - premium assumes flawless execution; any margin compression severely punishes valuation

TransDigm Group Inc

TDG

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TransDigm Group Inc AI Insights

Informational only. Not investment advice.

As of 2025-12-08

Snapshot

Operating margin 47.4% TTM vs industry median 3.6% - 13x advantage from proprietary aftermarket parts pricing power[Operating Margin]
Negative equity (-9.7B TTM) with 30B debt but 4.6B EBITDA covers 1.6B interest 2.9x - leveraged but serviceable[Total Debt]
Goodwill 10.6B is 46% of assets TTM - serial acquirer model carries impairment risk if aerospace cycle turns[Goodwill]

Watch Triggers

Interest Expense: Rises above 1.8B annually — Would compress net margin below 20% and threaten special dividend capacity
Operating Margin: Falls below 42% — Signals pricing power erosion or OEM pushback on aftermarket parts
Free Cash Flow: Drops below 1.5B TTM — Insufficient to service debt and maintain shareholder returns simultaneously

Bull Case

Monopolistic pricing on 90%+ sole-source aftermarket parts generates 47% operating margins - 13x industry median with minimal reinvestment needs

Operating MarginGross MarginCapital Expenditure

5.2B special dividend TTM demonstrates confidence in cash generation; debt/EBITDA of 6.6x manageable given recurring aftermarket revenue

Common Stock Dividend PaidEBITDATotal Debt

Bear Case

30B debt at rising rates with negative 9.7B equity - 1.6B annual interest consumes 75% of net income; refinancing risk if rates stay elevated

Total DebtInterest ExpenseTotal Equity

P/E 41.6x vs industry 21.4x median - premium assumes flawless execution; any margin compression severely punishes valuation

PE RatioPS Ratio

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

55%

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Forward Thesis

Aerospace aftermarket recovery sustains 20%+ FCF margins through 2027

1-3yhigh

Aging commercial fleet drives replacement demand
Sole-source parts create 60%+ gross margins
Capex under 3% of revenue preserves cash

FCF 1.8B on 8.8B revenue TTM = 20.6% marginGross margin 60.1% TTM vs 19% industry medianCapex only 222M TTM (2.5% of revenue)

Valuation Context

Caveats

Public Strategies Rankings

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TDG Fundamentals

Manufacturing → Transportation Equipment Manufacturing

Metric	Value	YoY Growth	Industry Percentile
Market Cap	$73.95B		—
Enterprise Value	$101.17B		—
P/E Ratio	39		—
Total Revenue - TTM	$8.83B	+11.2%	—
Earnings Per Share (diluted) - TTM	$32.41	+23.5%	—
Operating Margin - TTM	47.4%	+2.3%	—
Net Margin - TTM	23.5%	+1.9%	—
Free Cash Flow - TTM	$1.82B	-3.4%	—
Return on Common Equity - TTM	0.00		—
Beta 5Y (Monthly)	unknown		—

TDG Dividend History

12 dividends

09/12/25$90.0000

10/18/24$75.0000

11/27/23$35.0000

08/26/22$18.5000

01/07/20$32.5000

08/23/19$30.0000

09/12/17$22.0000

11/01/16$24.0000

06/26/14$25.0000

07/25/13$22.0000

11/05/12$12.8500

10/26/09$7.6500

TDG Stock Splits

No stock splits

TDG SEC Filings

Filing Date	Report Date	Report Type	Filing Link
11/12/25	09/30/25	Unknown	0001260221-25-000081
08/05/25	06/28/25	10-Q	0001260221-25-000051
05/06/25	03/29/25	10-Q	0001260221-25-000026
02/04/25	12/28/24	10-Q	0001260221-25-000014
11/07/24	09/30/24	10-K	0001260221-24-000083
08/06/24	06/29/24	10-Q	0001260221-24-000069
05/07/24	03/30/24	10-Q	0001260221-24-000046
02/08/24	12/30/23	10-Q	0001260221-24-000021
11/09/23	09/30/23	10-K	0001260221-23-000081
08/08/23	07/01/23	10-Q	0001260221-23-000058
05/09/23	04/01/23	10-Q	0001260221-23-000040
02/07/23	12/31/22	10-Q	0001260221-23-000007
11/10/22	09/30/22	10-K	0001260221-22-000065
08/09/22	07/02/22	10-Q	0001260221-22-000053
05/10/22	04/02/22	10-Q	0001260221-22-000026
02/08/22	01/01/22	10-Q	0001260221-22-000013
11/16/21	09/30/21	10-K	0001260221-21-000134
08/10/21	07/03/21	10-Q	0001260221-21-000110
05/11/21	04/03/21	10-Q	0001260221-21-000060
02/09/21	01/02/21	10-Q	0001260221-21-000027
11/12/20	09/30/20	10-K	0001260221-20-000099
08/04/20	06/27/20	10-Q	0001260221-20-000087
05/05/20	03/28/20	10-Q	0001260221-20-000050
02/04/20	12/28/19	10-Q	0001260221-20-000008
11/19/19	09/30/19	10-K	0001260221-19-000043
08/07/19	06/29/19	10-Q	0001260221-19-000034
05/08/19	03/30/19	10-Q	0001260221-19-000016
02/06/19	12/29/18	10-Q	0001260221-19-000007
11/09/18	09/30/18	10-K	0001260221-18-000070
08/08/18	06/30/18	10-Q	0001260221-18-000051
05/04/18	03/31/18	10-Q	0001260221-18-000032
02/07/18	12/30/17	10-Q	0001260221-18-000014
11/13/17	09/30/17	10-K	0001260221-17-000060
08/08/17	07/01/17	10-Q	0001260221-17-000046
05/10/17	04/01/17	10-Q	0001260221-17-000034
02/08/17	12/31/16	10-Q	0001260221-17-000009
11/15/16	09/30/16	10-K	0001260221-16-000107
08/10/16	07/02/16	10-Q	0001260221-16-000077
05/11/16	04/02/16	10-Q	0001260221-16-000054
02/10/16	01/02/16	10-Q	0001260221-16-000045
11/13/15	09/30/15	10-K	0001260221-15-000013
08/05/15	06/27/15	10-Q	0001193125-15-278126
05/05/15	03/28/15	10-Q	0001193125-15-172341
01/30/15	12/27/14	10-Q	0001193125-15-026722
11/14/14	09/30/14	10-K	0001193125-14-412880
08/06/14	06/28/14	10-Q	0001193125-14-297786
05/07/14	03/29/14	10-Q	0001193125-14-186582
02/05/14	12/28/13	10-Q	0001193125-14-036175
11/15/13	09/30/13	10-K	0001193125-13-443394
08/07/13	06/29/13	10-Q	0001193125-13-323406
05/08/13	03/30/13	10-Q	0001193125-13-206855
02/05/13	12/29/12	10-Q	0001193125-13-037994
11/16/12	09/30/12	10-K	0001193125-12-473908
08/08/12	06/30/12	10-Q	0001193125-12-343690
05/09/12	03/31/12	10-Q	0001193125-12-221920
02/08/12	12/31/11	10-Q	0001193125-12-045577
11/18/11	09/30/11	10-K	0001193125-11-316657
08/10/11	07/02/11	10-Q	0001193125-11-217925
05/11/11	04/02/11	10-Q	0001193125-11-135253
02/08/11	01/01/11	10-Q	0001193125-11-027069
11/15/10	09/30/10	10-K	0001193125-10-260837
08/11/10	07/03/10	10-Q	0001193125-10-185495
05/11/10	04/03/10	10-Q	0001193125-10-115742
02/10/10	01/02/10	10-Q	0001193125-10-027176
11/24/09	09/30/09	10-K	0001193125-09-241477
08/05/09	06/30/09	10-Q	0001193125-09-165052
05/06/09	03/31/09	10-Q	0001193125-09-100918
02/04/09	12/31/08	Unknown	--
11/25/08	09/30/08	10-K	0001193125-08-243231
08/07/08	06/30/08	Unknown	--
05/08/08	03/30/08	Unknown	--
02/07/08	12/31/07	4	0001209191-08-003948
11/21/07	09/30/07	10-K	0001193125-07-252212
08/10/07	06/30/07	10-Q	0001193125-07-179047
05/08/07	03/31/07	4	0001395166-07-000001
02/13/07	12/31/06	Unknown	--
11/28/06	09/30/06	10-K	0001193125-06-242168
08/15/06	06/30/06	Unknown	--
05/15/06	03/30/06	Unknown	--
12/31/05	12/31/05	Unknown	--