TDG
TransDigm Group
Hybrid Industrial
★ Quality 64/100Price today
$1,202
what the market pays
Worth
$219.83
calculated cycle value
Price is 447% above its value
charlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Manufacturing + technology
$672.73
per share
How it's calculated
TransDigm Group — high assistant path (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Hybrid Industrial · vs 28 peers
You pay 53x times this business's cash flow; its sector median is 33.7x.
59% above what Charlie thinks it's worth (21.6x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $31.20/share × 21.6x multiplier minus $452.90 in negative net cash = $219.83 in intrinsic value. Today's price of $1,202.19 is 82% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 447% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $208.84.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$175.86
-20% off Value
🟡 Discounted
≤$208.84
-5% off Value
🔴 Today
$1,202.19
-82% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Sells the $2,000 valve no airline can recertify in 30 years.
TransDigm makes proprietary aircraft components —pumps, valves, actuators, electrical systems— where it's the sole supplier on ~80% of its products. The real business is the aftermarket: selling replacement parts at premium prices over the decades each plane flies. FY2025: $8.8B in revenue, 60% gross margin, $1.8B in FCF.
Every part is FAA-certified for a specific aircraft model; switching suppliers requires recertification, something no airline wants to do over a $2,000 valve. That gives it real pricing power, year after year. The aftermarket is the gift that keeps giving: once the part is on the plane, they call the shots for 30 years.
Revenue history
From $4.8B to $8.8B in 4 years — nearly 1.8x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $8.8B · FY2025
Of every $100 in sales, $76 goes to costs and operations; $24 is left as net profit (24% margin).
Catalysts and risks
Global air traffic already topped pre-2019 levels; more flight hours means more demand for high-margin replacement parts.
Steady acquisitions at disciplined multiples —track record of raising prices and margins on what it buys.
FY2025 closed with $2.8B in cash and $1.8B in FCF; ammo for special dividends or more M&A.
$29.2B in debt against $2.8B in cash. The model leverages aggressively; high rates bite.
The Pentagon and Congress have already investigated its pricing on defense contracts. The regulatory risk is real.
The strategy depends on continuing to buy companies; if cheap targets run out, the CAGR deflates.
Charlie's note
“A toll booth dressed up as a manufacturer: they charge for every plane that flies and nobody can dodge them. The debt keeps me up at night, but it's the kind of business you understand in five minutes and admire for five decades.”
Analysis · June 2026
So when would be a good price for TransDigm Group?
By our calculation, not yet. We will email you the day it drops to $208.84 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.