Since December 2025, TransDigm has been in a holding pattern, posting a small return of 1.7% while floating around $1,338. The stock also fell short of the S&P 500’s 6.8% gain during that period.
Is now the time to buy TDG? Find out in our full research report, it’s free.
Why Are We Positive on TDG?
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.
1. Organic Growth Indicates Solid Core Business
Investors interested in Aerospace companies should track organic revenue in addition to reported revenue. This metric gives visibility into TransDigm’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, TransDigm’s organic revenue averaged 9.5% year-on-year growth. This performance was solid and shows it can expand steadily without relying on expensive (and risky) acquisitions. 
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
TransDigm’s EPS grew at 33.8% compounded annual growth rate over the last five years, higher than its 16.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
TransDigm has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company’s free cash flow margin was among the best in the industrials sector, averaging 19.6% over the last five years.
Final Judgment
These are just a few reasons why we think TransDigm is an elite industrials company. With its shares lagging the market recently, the stock trades at 30.5× forward P/E (or $1,338 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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