ALSN
9/9 ScoreAllison Transmission Holdings, Inc.
Analysis Date: February 21, 2026
Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells commercial and defense fully-automatic transmissions for medium-and heavy-duty commercial vehicles, and medium-and heavy-tactical U.S. defense vehicles worldwide. It offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company markets its transmissions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. It also sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its transmissions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. The company serves customers through an independent network of approximately 1,400 independent distributor and dealer locations. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana.
Buffettology Criteria
All 9 of 9 criteria passed
High ROE
Return on Equity > 12%
Value: 40.5%
High ROIC
Return on Invested Capital > 9%
Value: 15.0%
Cash Machine
FCF / Assets > 5%
Value: 12.3%
Fair Valuation
Earnings Yield > 3.5%
Value: 7.0%
Share Buybacks
Share Count is Dropping
Value: -3.3%
Defensible Moat
Gross Profit Margin > 40%
Value: 48.3%
Simple Business
Not in a speculative sector (e.g., Biotech)
Value: Consumer Cyclical
Conservative Debt
Debt to Equity < 1.5
Value: 1.30x
Consistent Growth
5-Year Growth is Positive
Value: 69.7%
Analysis Summary
This looks like a company on solid ground, swimming in a wide moat with excellent returns on capital. The consistent growth and a healthy balance sheet, coupled with a reasonable valuation, certainly catch the eye. It's rare to find such a compelling combination, and the company's ability to generate free cash flow while returning capital to shareholders signals good management.
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