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Allison Transmission Holdings, Inc. (ALSN) Hits Fresh High: Is There Still Room to Run?
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Shares of Allison Transmission (ALSN - Free Report) have been strong performers lately, with the stock up 23.9% over the past month. The stock hit a new 52-week high of $73.47 in the previous session. Allison Transmission has gained 26.2% since the start of the year compared to the -5.5% move for the Zacks Auto-Tires-Trucks sector and the -2.4% return for the Zacks Automotive - Original Equipment industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 13, 2024, Allison Transmission reported EPS of $1.91 versus consensus estimate of $1.42 while it beat the consensus revenue estimate by 2.63%.
For the current fiscal year, Allison Transmission is expected to post earnings of $7.64 per share on $3.1 billion in revenues. This represents a 3.24% change in EPS on a 2.11% change in revenues. For the next fiscal year, the company is expected to earn $8.38 per share on $3.27 billion in revenues. This represents a year-over-year change of 9.67% and 5.62%, respectively.
Valuation Metrics
Allison Transmission may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Allison Transmission has a Value Score of A. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 9.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.8X. On a trailing cash flow basis, the stock currently trades at 7.9X versus its peer group's average of 6.3X. Additionally, the stock has a PEG ratio of 1.37. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Allison Transmission currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Allison Transmission meets the list of requirements. Thus, it seems as though Allison Transmission shares could have potential in the weeks and months to come.
How Does ALSN Stack Up to the Competition?
Shares of ALSN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Modine Manufacturing Company (MOD - Free Report) . MOD has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Modine Manufacturing Company beat our consensus estimate by 29.82%, and for the current fiscal year, MOD is expected to post earnings of $3.74 per share on revenue of $2.39 billion.
Shares of Modine Manufacturing Company have gained 24.1% over the past month, and currently trade at a forward P/E of 24.82X and a P/CF of 26.75X.
The Automotive - Original Equipment industry may rank in the bottom 68% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for ALSN and MOD, even beyond their own solid fundamental situation.
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Allison Transmission Holdings, Inc. (ALSN) Hits Fresh High: Is There Still Room to Run?
Shares of Allison Transmission (ALSN - Free Report) have been strong performers lately, with the stock up 23.9% over the past month. The stock hit a new 52-week high of $73.47 in the previous session. Allison Transmission has gained 26.2% since the start of the year compared to the -5.5% move for the Zacks Auto-Tires-Trucks sector and the -2.4% return for the Zacks Automotive - Original Equipment industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 13, 2024, Allison Transmission reported EPS of $1.91 versus consensus estimate of $1.42 while it beat the consensus revenue estimate by 2.63%.
For the current fiscal year, Allison Transmission is expected to post earnings of $7.64 per share on $3.1 billion in revenues. This represents a 3.24% change in EPS on a 2.11% change in revenues. For the next fiscal year, the company is expected to earn $8.38 per share on $3.27 billion in revenues. This represents a year-over-year change of 9.67% and 5.62%, respectively.
Valuation Metrics
Allison Transmission may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Allison Transmission has a Value Score of A. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 9.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.8X. On a trailing cash flow basis, the stock currently trades at 7.9X versus its peer group's average of 6.3X. Additionally, the stock has a PEG ratio of 1.37. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Allison Transmission currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Allison Transmission meets the list of requirements. Thus, it seems as though Allison Transmission shares could have potential in the weeks and months to come.
How Does ALSN Stack Up to the Competition?
Shares of ALSN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Modine Manufacturing Company (MOD - Free Report) . MOD has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. Modine Manufacturing Company beat our consensus estimate by 29.82%, and for the current fiscal year, MOD is expected to post earnings of $3.74 per share on revenue of $2.39 billion.
Shares of Modine Manufacturing Company have gained 24.1% over the past month, and currently trade at a forward P/E of 24.82X and a P/CF of 26.75X.
The Automotive - Original Equipment industry may rank in the bottom 68% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for ALSN and MOD, even beyond their own solid fundamental situation.