TDG US S&P 500Russell 1000 Earnings call
TransDigm Group (TDG) · Q2 2026 results and valuation
Share price: $1245.00 · 2026-11-11
TransDigm Group designs, manufactures, and supplies engineered aerospace components for commercial and military aircraft, as well as products for space and ground transportation. The company serves aircraft manufacturers, military agencies, and aftermarket providers in the aviation, defense, and industrial markets. Source: 10-K annual report (2025-11-12)
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q3 2026 · published 4 Aug 2026 and 5 May 2026
Net income up 0.7% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
1 · Numbers
+0.7%
Net income vs Q1 2026
Outlook given
Net income 539.0M vs 535.0M
Revenue +7.7%
Why Against the same quarter last year (+9.6%), net income rose because of healthy growth in revenue across all three market channels, including commercial OEM, commercial aftermarket, and defense, as well as strong growth in the defense market and commercial transport aftermarket.
2 · How management spoke
Typical
More upbeat than 52% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
TransDigm Group agreed to acquire Prince & Izant from Industrial Growth Partners for approximately $1.1 billion in cash.
Valuation
Is TransDigm Group undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-09-30), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 17.6% growth a year (3-year revenue growth), the model's fair value is $1056.36 a share — the stock trades 18% above it. Today's price assumes 19.4% growth a year.
Current price
$1245.00
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+19.4% for 10 yrs
Fair value / share
$1056.36
Buy below
$792.27
Price vs fair value
Overvalued 18%
Price vs buy-below price
Overvalued 57%
Read between the lines
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Guidance
The midpoint of fiscal '26 revenue guidance is now $10.51 billion, which is up approximately 19% over the prior year.
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Guidance
TDG increased its fiscal 2026 commercial OEM revenue guidance to the mid-teens percentage growth range based on performance to date and the outlook for the remainder of the year.
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Figure
The EBITDA As Defined margin was 52.8% in the quarter, which includes more than full 2 percentage points of dilution from recent acquisitions.
Source quote
“Our EBITDA As Defined margin was 52.8% in the quarter, which includes more than full 2 percentage points of dilution from recent acquisitions.”
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Figure
Total commercial OEM revenue increased approximately 17% in Q3 compared with the prior year period.
Source quote
“Our total commercial OEM revenue increased approximately 17% in Q3 compared with the prior year period.”
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Guidance
TDG deployed about $980 million of capital via open market repurchases of common stock during the quarter based on its targeted return criteria.
4 more
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Figure
TDG agreed to acquire Prince & Izant from Industrial Growth Partners for approximately $1.1 billion in cash.
Source quote
“Last week, we announced that we agreed to acquire Prince & Izant from Industrial Growth Partners for approximately $1.1 billion in cash.”
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Figure
The company has more than $10 billion in M&A firepower and capacity remaining for potential acquisitions.
Source quote
“Specifically, we have substantial M&A firepower and capacity remaining, in excess of $10 billion.”
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Guidance
Strong bookings support TDG's guidance of high-single digits to low-double digits for the year.
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Figure
New product wins will deliver substantial new business revenue over the next 3 years from prototype and LRIP orders as teams work toward full production.
Source quote
“These innovation-driven new product wins will deliver substantial new business revenue over the next 3 years from prototype and LRIP orders as the teams work toward full production.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Our commercial transport aftermarket revenue growth, which excludes our bizjet submarket, was up 18%, driven by solid growth in the transport submarkets of engine, passenger, and interiors, while freight was...”
“Over the past year, we have seen strong growth in the defense market, driven by a combination of new business wins and excellent operational execution from our teams.”
“And lastly, our defense end market saw a double-digit revenue increase this quarter and continues to build backlog that will drive growth as we finish fiscal 2026 and head into...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-27)
| Metric | Q2 2026period end 2026-06-27 | Q1 2026period end 2026-03-28 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 2.74B | 2.54B | +7.7% | 2.24B | +22.5% |
| Gross profit | 1.63B | 1.51B | +7.7% | 1.33B | +22.2% |
| Operating income | 1.23B | 1.18B | +4.2% | 1.04B | +18.1% |
| Net income | 539.0M | 535.0M | +0.7% | 492.0M | +9.6% |
| EPS | 9.39 | 9.20 | +2.1% | 8.47 | +10.9% |
| P/E today 36.3 | 40.2 | 35.6 | +4.6 | 49.8 | −9.6 |
Topics
Most discussed now
- TransDigm's capital structure and allocation are a key part of its value creation methodology.
- About 90% of TransDigm's net sales are generated by unique proprietary products.
- TransDigm has a decentralized organizational structure and unique compensation system closely aligned with its shareholders.
- To reiterate, TransDigm believes it is unique in the industry in both the consistency of its strategy in both good...
- This is primarily driven by the production improvements at Boeing and Airbus, and TransDigm's teams are well positioned to support...
Faded since Q1 2026
- Fading Airline demand for new aircraft remains high, with backlogs increasing.
- Fading Mike, just to kick it off, you obviously went through a lot of detail in what you've seen or not...
- Fading TransDigm is very pleased with its margin performance in the year-to-date period, and it is running...
- Fading As noted in its earnings release, TransDigm is increasing its full-year 2026 sales and EBITDA as defined guidance to reflect...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Material agreement; New financial obligation · SEC 8-K
TransDigm Inc. entered into an indenture dated September 28, 2026, for 6.75% Senior Secured Notes due 2035.
- Other events · SEC 8-K
TransDigm Group Incorporated completed the acquisition of Prince & Izant for approximately $1.066 billion in cash, including certain tax benefits, on September 28, 2026.
- Other events · SEC 8-K
TransDigm Group's operating unit, Extant Aerospace, entered into a definitive agreement to acquire a portfolio of products and a California facility for approximately $240 million in cash.
- Regulation FD disclosure · SEC 8-K
TransDigm Group priced an offering of $3,000 million of 6.75% Senior Secured Notes due 2035, which was increased from the previously announced $2,500 million.
- Regulation FD disclosure · SEC 8-K
TransDigm Group commenced a cash tender offer on September 14, 2026, for all outstanding 6.75% Senior Secured Notes due 2028.
- Regulation FD disclosure · SEC 8-K
TransDigm Group plans to offer $2,500 million in senior secured notes to repurchase outstanding 6.75% senior secured notes due 2028 and for general corporate purposes.
- Results of operations · SEC 8-K
TransDigm Group reported its financial results for the third quarter ended June 27, 2026, in a press release issued on August 4, 2026.
- Other events · SEC 8-K
TransDigm Group Incorporated entered into a definitive agreement to acquire Prince & Izant for approximately $1.066 billion in cash, including certain tax benefits.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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2026 calendar year
expected revenue for Prince & Izant
Source quote
“It is expected to generate approximately $360 million of revenue for the 2026 calendar year.”
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fiscal 2026
sales and EBITDA As Defined guidance
Source quote
“We're increasing our full fiscal year '26 sales and EBITDA As Defined guidance to reflect another solid quarter of results and our current expectations for the remainder of the year.”
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fiscal 2026
revenue guidance
Source quote
“The midpoint of our fiscal '26 revenue guidance is now $10.51 billion or up approximately 19% over the prior year.”
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fiscal 2026
EBITDA As Defined guidance
Source quote
“The midpoint of fiscal 2026 EBITDA As Defined guidance is now $5.52 billion or up approximately 16% versus the prior year, with an expected margin of around 52.5%.”
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last quarter of fiscal 2026
positioning for the quarter
Source quote
“We believe we're well positioned for the last quarter of fiscal 2026.”