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    TDG · NYQ · Industrials

    TransDigm Group Incorporated

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 1089.38

    Market price

    USD 1213.62

    Implied upside

    -10.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-09-30

    Current EV/EBITDA of 20.7x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 1089.38-10.2%
    Exit multiple
    USD 1701.60+40.2%
    Market price
    USD 1213.62

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 10.5bnUSD 11.8bnUSD 13.0bnUSD 14.2bnUSD 15.4bnUSD 16.4bnUSD 17.4bnUSD 18.2bnUSD 18.9bnUSD 19.4bn+7.0%
    EBITUSD 4.7bnUSD 5.2bnUSD 5.8bnUSD 6.3bnUSD 6.8bnUSD 7.3bnUSD 7.7bnUSD 8.1bnUSD 8.4bnUSD 8.6bn+7.0%
    NOPATUSD 3.7bnUSD 4.1bnUSD 4.6bnUSD 5.0bnUSD 5.4bnUSD 5.8bnUSD 6.1bnUSD 6.4bnUSD 6.6bnUSD 6.8bn+7.0%
    Add depreciation & amortisationUSD 442.7mUSD 494.1mUSD 545.9mUSD 596.8mUSD 645.7mUSD 691.2mUSD 732.1mUSD 767.1mUSD 795.0mUSD 814.9m+7.0%
    Less capital expenditureUSD -234.2mUSD -343.2mUSD -469.6mUSD -612.3mUSD -769.4mUSD -938.2mUSD -1.1bnUSD -1.3bnUSD -1.5bnUSD -1.6bn+24.2%
    Capex, % of revenue2.2%2.9%3.6%4.3%5.0%5.7%6.4%7.1%7.8%8.5%-
    Less increase in working capitalUSD -638.3mUSD -458.9mUSD -462.0mUSD -454.9mUSD -436.6mUSD -406.7mUSD -365.2mUSD -312.3mUSD -249.2mUSD -177.5m-13.3%
    Free cashflow to firmUSD 3.3bnUSD 3.8bnUSD 4.2bnUSD 4.5bnUSD 4.8bnUSD 5.1bnUSD 5.4bnUSD 5.6bnUSD 5.7bnUSD 5.8bn+6.6%
    Discount factor0.96370.89510.83140.77220.71720.66610.61870.57460.53370.4957-
    Present valueUSD 3.1bnUSD 3.4bnUSD 3.5bnUSD 3.5bnUSD 3.5bnUSD 3.4bnUSD 3.3bnUSD 3.2bnUSD 3.0bnUSD 2.9bn-
    Present Value Of The ForecastUSD 32.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.965Reported 0.948, pulled toward 1.0 (Blume)
    Cost of equity8.98%Risk-free + beta x equity risk premium
    Cost of debt6.00%Risk-free + 111bp, the spread for a BBB rating at 2.7x interest cover. Book interest / average debt was lower, at 5.7%.
    Market capitalisationUSD 67.1bn69.1% of capital
    Total debtUSD 30.0bn30.9% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.67%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 1089.38

    64% of EV

    Forecast FCFF, final year
    USD 5.8bn
    Capex at depreciation, working capital in reinvestment
    USD 7.1bn
    Less reinvestment at g/ROIC (17.7% of NOPAT)
    USD -1.3bn
    Capitalised
    USD 5.9bn
    ROIC (reported)
    14.1%
    Terminal value, undiscounted
    USD 116.6bn
    Terminal value, discounted
    USD 57.8bn
    Enterprise value
    USD 90.6bn
    Less net debt
    USD 27.2bn
    Equity value
    USD 63.4bn

    Exit at 20.0x EBITDA

    Value per shareUSD 1701.60

    74% of EV

    Terminal value, undiscounted
    USD 188.5bn
    Terminal value, discounted
    USD 93.4bn
    Enterprise value
    USD 126.3bn
    Less net debt
    USD 27.2bn
    Equity value
    USD 99.0bn

    Spread between methods: 44%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.67%1760.791900.432087.532348.802735.56
    6.67%1315.021382.431468.441580.651731.49
    7.67%1014.691047.911089.391141.821209.11
    8.67%798.87814.27833.62857.98888.79
    9.67%636.48642.00649.49659.38672.26

    Outlined: this model. Green text: above today's price of 1213.62. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year17.6%8.2%9.1%
    EBIT margin47.4%44.4%48.0%
    Discount rate-7.7%7.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.