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Allison Transmission (ALSN) Down 3.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Allison Transmission (ALSN - Free Report) . Shares have lost about 3.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Allison Transmission due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allison reported fourth-quarter 2025 earnings of $1.70 per share, which beat the Zacks Consensus Estimate of $1.56, but decline 15.4% year over year. Quarterly revenues of $737 million declined 7.4% from the year-ago quarter but surpassed the Zacks Consensus Estimate of $722 million.
Segmental Performance
In the reported quarter, net sales in the North America On-Highway end market declined 13.8% year over year to $361 million but exceeded the Zacks Consensus Estimate of $335 million.
The Outside North America On-Highway end market’s net sales were $131 million, an increase of 5.7% from the corresponding quarter of 2024, due to higher demand in Europe. The metric also beat the Zacks Consensus Estimate of $125 million.
Net sales in the Global Off-Highway end market plunged to $12 million from $16 million reported in the year-ago period. The figure, however, beats the Zacks Consensus Estimate of $11.57 million.
In the reported quarter, net sales in the Defense end market rose 7.4% year over year to $73 million, driven by continued execution of growth initiatives. The reported figure, however, missed the Zacks Consensus Estimate of $86 million.
Net sales in the Service Parts, Support Equipment & Other end markets fell 5.3% year over year to $160 million in the quarter. The reported figure also missed the Zacks Consensus Estimate of $167 million.
Financial Position
Allison reported gross profit of $354 million, which decreased from $373 million in the year-ago quarter due to lower volumes and unfavorable direct material costs.
Adjusted EBITDA in the quarter was $265 million, which decreased from $270 million reported a year ago.
Selling, general and administrative expenses in the quarter were $110 million, up 31% year over year. Engineering, research and development expenses decreased to $44 million from $54 million reported in the fourth quarter of 2024 due to lower spending on product initiatives as the company adjusted costs and programs to better align with end-market demand conditions.
Allison Transmission had cash and cash equivalents of $1.5 billion as of Dec. 31, 2025, up from $781 million recorded as of Dec. 31, 2024. Long-term debt was $2.89 billion, up from $2.4 billion.
Net cash provided by operating activities totaled $243 million. Adjusted free cash flow in the reported quarter totaled $169 million, up from $136 million generated a year ago.
ALSN 2026 Outlook
Allison Transmission has provided its full-year 2026 outlook. The company now anticipates Allison Transmission net sales between $3,025 million and $3,175 million compared with $3,010 million reported in 2025. Net income is expected in the range of $600 million to $750 million compared with $623 million reported in 2025. Adjusted EBITDA is expected between $1,365 million and $1,515 million compared with $1,130 million reported in 2025.
Additionally, net cash provided by operating activities is expected to be in the range of $970 million to $1,100 million compared with $836 million reported in 2025. Capital expenditures are projected at $295 million to $315 million. Adjusted free cash flow is now expected between $655 million and $805 million compared with $661 million reported in 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -9.58% due to these changes.
VGM Scores
At this time, Allison Transmission has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Allison Transmission has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Allison Transmission (ALSN) Down 3.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Allison Transmission (ALSN - Free Report) . Shares have lost about 3.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Allison Transmission due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allison Transmission Q4 Earnings Beat Expectations
Allison reported fourth-quarter 2025 earnings of $1.70 per share, which beat the Zacks Consensus Estimate of $1.56, but decline 15.4% year over year. Quarterly revenues of $737 million declined 7.4% from the year-ago quarter but surpassed the Zacks Consensus Estimate of $722 million.
Segmental Performance
In the reported quarter, net sales in the North America On-Highway end market declined 13.8% year over year to $361 million but exceeded the Zacks Consensus Estimate of $335 million.
The Outside North America On-Highway end market’s net sales were $131 million, an increase of 5.7% from the corresponding quarter of 2024, due to higher demand in Europe. The metric also beat the Zacks Consensus Estimate of $125 million.
Net sales in the Global Off-Highway end market plunged to $12 million from $16 million reported in the year-ago period. The figure, however, beats the Zacks Consensus Estimate of $11.57 million.
In the reported quarter, net sales in the Defense end market rose 7.4% year over year to $73 million, driven by continued execution of growth initiatives. The reported figure, however, missed the Zacks Consensus Estimate of $86 million.
Net sales in the Service Parts, Support Equipment & Other end markets fell 5.3% year over year to $160 million in the quarter. The reported figure also missed the Zacks Consensus Estimate of $167 million.
Financial Position
Allison reported gross profit of $354 million, which decreased from $373 million in the year-ago quarter due to lower volumes and unfavorable direct material costs.
Adjusted EBITDA in the quarter was $265 million, which decreased from $270 million reported a year ago.
Selling, general and administrative expenses in the quarter were $110 million, up 31% year over year. Engineering, research and development expenses decreased to $44 million from $54 million reported in the fourth quarter of 2024 due to lower spending on product initiatives as the company adjusted costs and programs to better align with end-market demand conditions.
Allison Transmission had cash and cash equivalents of $1.5 billion as of Dec. 31, 2025, up from $781 million recorded as of Dec. 31, 2024. Long-term debt was $2.89 billion, up from $2.4 billion.
Net cash provided by operating activities totaled $243 million. Adjusted free cash flow in the reported quarter totaled $169 million, up from $136 million generated a year ago.
ALSN 2026 Outlook
Allison Transmission has provided its full-year 2026 outlook. The company now anticipates Allison Transmission net sales between $3,025 million and $3,175 million compared with $3,010 million reported in 2025. Net income is expected in the range of $600 million to $750 million compared with $623 million reported in 2025. Adjusted EBITDA is expected between $1,365 million and $1,515 million compared with $1,130 million reported in 2025.
Additionally, net cash provided by operating activities is expected to be in the range of $970 million to $1,100 million compared with $836 million reported in 2025. Capital expenditures are projected at $295 million to $315 million. Adjusted free cash flow is now expected between $655 million and $805 million compared with $661 million reported in 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -9.58% due to these changes.
VGM Scores
At this time, Allison Transmission has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Allison Transmission has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.