Allison Transmission Holdings Inc (ALSN)
NYSEConsumer DiscretionaryAuto - PartsSnapshot 2026-09-04
$131.24+2.18%
Close 2026-09-04 · 1-day change
NYSEConsumer DiscretionaryAuto - PartsSnapshot 2026-09-04
Intact: The reason to own it still holds.
Allison Transmission grows revenue strongly, aiming for about $5.9 billion in 2026. The company targets free cash flow near $730 million, showing financial strength. Its recent Dana acquisition supports growth and profit. Management maintains capital spending to invest in future growth.
The company recently cut guidance and missed earnings, showing risks to growth. Macroeconomic uncertainties and sector headwinds may pressure sales and profits. The stock has sold off 15.8% from its high, reflecting these concerns.
The market prices in about 41% revenue growth and a share price 22% above our fair value near $94. Our view aligns with consensus growth but notes risks from recent guidance cuts and earnings misses.
Breaks if: Capital expenditures fall below $295M in FY26
Sustain capital expenditures within the range of $260 to $280 million for 2026, including integration-related spending.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This is a durable compounder with a focus on integrating its Off-Highway business unit. The current thesis state is stable, supported by recent earnings beats and reaffirmed revenue guidance.
The market appears to have a neutral view on ALSN's valuation, with expectations slightly below what management has indicated. There is a low level of fragility in the stock's pricing, suggesting that the market is not overly pessimistic.
Management has shown strong recent financial performance and is on track with capital expenditures and revenue guidance. However, there is a moderate risk due to the potential for misses in a high-miss-rate industry.
The thesis hinges on management's ability to successfully integrate the Off-Highway business and maintain guidance. Additionally, sector performance from peers like GPC, BWA, and APTV will be important for momentum.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports a positive outlook. The company reaffirmed its full-year 2026 revenue guidance, reinforcing confidence in its performance. There are no new threats impacting the thesis at this time.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated in 3 of last 3 quarters. Capital expenditures guidance was $295-$315 million in 2026-Q1 and narrowed to $260-$280 million in 2026-Q2, reflecting inclusion of one-time integration costs. Management maintains disciplined capex guidance, showing delivering on capital allocation priorities.
“Consolidated capital expenditures in the range of $260 to $280 million, including one-time separation and integration capital expenditures of approximately $30 million.”
“Consolidated capital expenditures in the range of $295 to $315 million, including one-time separation and integration capital expenditures of approximately $45 million.”
“Consolidated capital expenditures in the range of $295 to $315 million.”
Breaks if: Free cash flow falls below $655M in FY26
Generate adjusted free cash flow in the range of $745 to $865 million for full year 2026.
Reiterated or increased in 3 of last 3 quarters. Adjusted free cash flow guidance rose from $655-$805 million in 2026-Q1 to $745-$865 million in 2026-Q2. Actual adjusted free cash flow was $281 million in 2026-Q2, up 84% year over year, indicating delivering progress toward full year target.
“Consolidated adjusted free cash flow guidance increased to $745 to $865 million for 2026.”
“Consolidated adjusted free cash flow guidance reaffirmed at $655 to $805 million for 2026.”
“Consolidated adjusted free cash flow guidance in the range of $655 to $805 million for 2026.”
Breaks if: Additional guidance cuts or earnings misses occur in FY26
Breaks if: Revenue falls below $5.57B in FY26
Maintain and increase full year 2026 consolidated net sales guidance reflecting improving market conditions.
Reaffirmed or increased in 3 of last 3 quarters. Full year 2026 consolidated net sales guidance rose from $5.575-$5.925 billion in 2026-Q1 to $5.8-$6.0 billion in 2026-Q2. This reflects management's response to improving market conditions and second quarter results, showing delivering trajectory on revenue guidance.
“Increasing full year 2026 guidance to consolidated net sales in the range of $5,800 to $6,000 million.”
“Reaffirming full year 2026 guidance of consolidated net sales in the range of $5,575 to $5,925 million.”
“Providing full year 2026 guidance of consolidated net sales in the range of $5,575 to $5,925 million.”
Overall, ALSN's fundamentals are solid, but external factors could impact its trajectory. Not investment advice.