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    Is Allison Transmission Holdings (ALSN) Undervalued As Record Results And Guidance Rise Lift Expectations?

    Simply Wall St·11/05/2026 03:45:21
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    Allison Transmission Holdings (ALSN) just posted record third quarter results, with revenue of US$1.53b and net income of US$191 million, and management raised full year guidance for sales, earnings and cash flow.

    The earnings surprise and upgraded outlook appear to be feeding directly into sentiment. The share price is up 10.27% over the past week and has delivered a 21.81% year-to-date share price return at a last close of US$120.52. Allison Transmission Holdings has also delivered a 50.81% total shareholder return over the past year and a 258.49% total shareholder return over five years, which suggests recent momentum is building on a much longer period of strong value creation for investors.

    Scan other industrials that display similar earnings momentum and acquisition driven growth to Allison Transmission Holdings through our curated list of 19 high quality undiscovered gems.

    After a 10% weekly jump and a share price that still sits below both analyst targets and one intrinsic value estimate, is the market fairly cautious on Allison Transmission Holdings, or is it leaving too much upside on the table?

    Most Popular Narrative: 14% Undervalued

    The most followed narrative currently values Allison Transmission Holdings at $140.40 per share using a 9.5% discount rate, compared with the last close at $120.52. That view leans on specific business shifts that supporters see as central to the long term equity story.

    The acquisition of Dana's Off-Highway Drive and Motion Systems business is now contributing about 45% of Allison Transmission Holdings revenue and carries a target of US$120 million in annual run rate synergies by 2029. Management expects this to support higher consolidated earnings once integration work and one time costs have passed through.

    See why 23 investors see Allison Transmission Holdings as 14% undervalued.

    Result: Fair Value of $140.40 (UNDERVALUED)

    Still, the bullish Allison Transmission Holdings story depends on two pressure points not breaking: material cost inflation staying manageable, and North America On Highway demand not turning into a longer slump.

    Find out about the key risks to this Allison Transmission Holdings narrative.

    Next Steps

    Sentiment around Allison Transmission Holdings is clearly split, with strong recent returns on one side and clear risk flags on the other. It makes sense to examine the same numbers and form your own judgment. To weigh both sides of the argument in one place, start with the 3 key rewards and 2 important warning signs.

    Looking for more investment ideas beyond Allison Transmission Holdings?

    Do not stop with Allison Transmission Holdings when the broader market offers many different risk and income profiles that could fit your goals even better.