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    A Look At TransDigm Group (TDG) Valuation After Recent Share Price Pullback And Strong Long Term Returns

    Simply Wall St·02/24/2026 14:33:51
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    Recent share performance context for TransDigm Group

    Recent price moves in TransDigm Group (TDG) have drawn investor attention, with the stock showing mixed returns across different periods and prompting closer scrutiny of its fundamentals and valuation.

    See our latest analysis for TransDigm Group.

    The recent pullback, with a 1 month share price return of an 8.67% decline and a year to date share price return of a 4.59% decline from US$1,296.15, contrasts with a 1 year total shareholder return of 5.50% and a 3 year total shareholder return above 100%. This suggests that longer term momentum has been stronger than the latest move.

    If TransDigm Group's mixed momentum has you looking around the market, this could be a good moment to check out 22 top founder-led companies as potential new ideas for your watchlist.

    With TransDigm Group reporting US$9.11b in revenue and US$1.81b in net income, and only a small 1.85% intrinsic discount, you now have to ask yourself whether there is still a buying opportunity here or whether the market is already pricing in future growth.

    Most Popular Narrative: 18.3% Undervalued

    With TransDigm Group last closing at $1,296.15 against a narrative fair value of about $1,586, the current setup hinges on how durable its aftermarket cash flows and earnings power prove to be over time.

    The growing age of the global aircraft fleet, combined with heightened airline investment in refurbishments and mandatory regulatory maintenance, is increasing the need for proprietary replacement parts, positively impacting TransDigm's high-margin aftermarket revenues and supporting continued margin expansion.

    Read the complete narrative.

    Want to see what is baked into that fair value gap? The narrative leans heavily on recurring cash flows, rising margins and a rich future earnings multiple. The exact mix of growth, profitability and required return might surprise you.

    Result: Fair Value of $1,586 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, the story can change quickly if aftermarket demand on legacy platforms softens, or if high leverage and interest costs begin to reduce earnings power.

    Find out about the key risks to this TransDigm Group narrative.

    Another View: Rich Multiples Temper The Undervaluation Story

    That 18.3% narrative undervaluation sits awkwardly next to TransDigm Group’s current P/E of 40.5x. The fair ratio is 37.5x and peers sit around 39.2x, so the shares already trade at a premium to the fair ratio and even slightly above peers. Is the extra optimism already baked in?

    See what the numbers say about this price — find out in our valuation breakdown.

    NYSE:TDG P/E Ratio as at Feb 2026
    NYSE:TDG P/E Ratio as at Feb 2026

    Next Steps

    If this mix of optimism and concern feels finely balanced, it is worth checking the numbers yourself and forming your own view quickly, starting with 4 key rewards and 4 important warning signs.

    Looking for more investment ideas?

    If TransDigm has sharpened your focus, do not stop here. Broaden your watchlist with other clear, data driven ideas that could suit your approach.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.