TransDigm Group Incorporated (TDG) Stock Valuation — PE Analysis
Aerospace & Defense · NYSE
Current Price
$1256.05
PE Ratio (TTM)
36.1x
Intrinsic Value
$1,636.18
+23.2% margin of safety
COMPETITIVE MOAT
↑Proprietary Aftermarket Parts
TransDigm holds exclusive aftermarket supply agreements for many aircraft parts. This creates a captive customer base for its high-margin components.
↑Acquisition Expertise
The company has a proven track record of acquiring and integrating niche aerospace businesses. This strategy consistently adds revenue and profitability.
↑High Switching Costs
Aviation regulations and safety certifications make it difficult and costly for airlines to switch suppliers for critical components. This locks in demand.
INVESTMENT RISKS
↓Regulatory Scrutiny
The company's pricing strategies for aftermarket parts have drawn regulatory attention. Potential investigations or price caps could impact profitability.
↓Debt Burden
TransDigm's aggressive acquisition strategy has resulted in significant debt. Rising interest rates could increase financial strain and limit future M&A.
↓Customer Concentration
A significant portion of revenue comes from a limited number of large aerospace customers. Any disruption to these relationships could be detrimental.
Base case
TDG base case PE valuation
A base case PE valuation for TDG estimates a fair value of about $1,636.18 per share, against a current price of $1,256.05. The model assumes 13.2% annual earnings growth, a 36x target PE multiple, and a 10% discount rate.
Intrinsic Value
$1,636.18
Margin of safety
+23.2%
Expected annual return
+5.4%
Base case assumptions: 13.2% annual earnings growth, 36x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the TDG PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for TransDigm Group Incorporated respond.
Open PE Calculator for TDGCompany Overview
TransDigm Group Incorporated is a global aerospace enterprise specializing in the development, manufacturing, and distribution of a wide array of aircraft components. Operating across the United States and internationally, its business is structured around three distinct divisions. The Power & Control division focuses on critical systems, providing solutions such as electromechanical actuators and control mechanisms, engine ignition and related technologies, precision pumps and valves, power regulation equipment, specialized electric motors and generators, energy storage units, data communication and power management systems, diverse sensors, switching gear, and material handling equipment including hoists and cargo systems. This segment caters to a broad clientele, including engine and power system manufacturers, airlines, independent maintenance providers, governmental defense agencies, and aircraft repair facilities. The Airframe segment delivers structural and interior components. Its offerings encompass custom latching and locking mechanisms, structural rods and connectors, resilient sealing solutions, cockpit safety and display units, advanced audio, radio, and antenna technologies, restroom facilities, passenger safety restraints, bespoke interior panels and associated parts, thermal management and insulation products, illumination and control systems, and parachutes. Its customer base includes airframe constructors, cabin system integrators, commercial airlines, third-party maintenance organizations, military procurement offices, and overhaul centers. Beyond aviation, the Non-Aviation segment addresses diverse industrial needs. It supplies safety harnesses for ground vehicles, electromechanical actuators for space vehicles, hydraulic and electromechanical actuators and fuel valves for terrestrial gas turbines, specialized refueling systems for heavy machinery in sectors like mining and construction, and sophisticated turbine controls for the energy and petrochemical industries. This segment's clients span suppliers of off-road vehicles and their subsystems, manufacturers of child safety seats, providers of satellite and space systems, and producers of heavy industrial equipment. Established in 1993, TransDigm Group Incorporated maintains its headquarters in Cleveland, Ohio.
Financial Metrics — TDG PE Stock Valuation Data
PE Ratio (TTM)
36.1x
PEG Ratio
4.42
Earnings Yield
2.77%
ROE (TTM)
-24.3%
Revenue/Share (TTM)
$163.28
Dividend Yield
7.17%
Debt/Equity
n/m
Frequently Asked Questions
What is the PE ratio of TDG?
The trailing twelve-month PE ratio of TDG reflects how much investors pay per dollar of TransDigm Group Incorporated's earnings. This metric is most useful when compared to Aerospace & Defense peers and the company's own historical range.
Is TDG overvalued based on PE ratio?
TDG's PE of 36.1x combined with a PEG ratio of 4.42 provides a growth-adjusted perspective. A PEG above 2.0 suggests TDG may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Aerospace & Defense, a DCF analysis may be more appropriate.
How do I value TDG stock using PE ratio?
To value TransDigm Group Incorporated using PE: (1) Compare the current PE (36.1x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (4.42) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of TDG?
TDG's PEG ratio is 4.42, calculated by dividing the PE ratio (36.1x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for TDG stock valuation?
PE ratio gives a quick relative read — how TDG is priced versus Aerospace & Defense peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See TDG DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value TDG with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.