TransDigm Group Incorporated (TDG): analysis and signal as of September 3, 2026

Published on September 3, 2026 at 08:53 · Updated on September 3, 2026 at 23:04 · by Aurélien Ambert, QDNA

Exchange : NYSE · Sector : Electronic Technology (Aerospace)

In short

The signal on TransDigm Group is weak (score of -3,50, vote 3/3) as of 3 September 2026. Debt close to 6x EBITDA in a rate regime at 3,50-3,75 % and a share price below the 50 and 200 session moving averages penalize the rating, despite a rent on aerospace spare parts and results above expectations.

Current signal: weak (vote 3/3)
Deterministic score: -3.5 → signal expected by the scale : no signal (September 10, 2026)
Layers: fundamentals : positive, price : negative, risks : neutral

Triggered rules

Rule	Weight
penalizes a high bankruptcy risk (Altman Z-Score in distress zone, < 1,8)	-3.0
penalizes an asset whose net debt/EBITDA exceeds the threshold, and the use of leverage (margin/lombard)	-2.5
favors a high and durable return on invested capital (ROIC), a marker of a lasting moat	+2.0
penalizes direct holding of US securities in a CTO (US estate tax at death), favors a UCITS ETF domiciled in IE	-1.0
favors a "fast grower" profile, high and durable earnings growth (> 20 %), to be cross-checked against the PEG	+1.0

Thesis

TransDigm holds a rent on aerospace spare parts, with proven pricing power and an As Defined EBITDA margin of 52,8 %. Structural debt close to 6x EBITDA in a rate regime at 3,50-3,75 % triggers two major safeguards (debt and Altman) for -5,5 deterministic points. The price structure remains bearish below the 50 and 200 session moving averages despite results above expectations, which keeps the signal at the weak level in the absence of an identified catalyst.

Bull case

Organic growth reaches about 13 % and the As Defined EBITDA margin 52,8 % despite dilution from acquisitions. FY2026 annual forecasts were raised on 04/08/2026. The company devoted 1,0 Md USD to share repurchases around 1 208 USD, above the price of 02/09 at 1 153,75 USD. The Beneish M-Score at -2,32 signals no accounting manipulation and the beta of 0,71 indicates low sensitivity to the market.

Bear case

The median net debt/EBITDA leverage of 5,9x (mean 6,1x) costs -2,5 deterministic points. The Altman Z-Score stands in a penalized zone for -3,0 points, while the Fed remains at 3,50-3,75 %. EPS growth (+11 %) is half that of sales (+23 %) under the weight of interest costs. The flow reading is unfavorable: the share price stands 7,6 % below the 50 session moving average and 9,2 % below the 200 session moving average after good results. The whole long term performance comes from opening gaps, with a systematic intraday distribution of -6,5 bp per session, a profile of trading on information without institutional accumulation. Antitrust regulatory pressure and pressure on billing to the US Department of Defense (DoD) remain chronic, with the letter from Warren, Garamendi and Pocan.

Scenarios

The bull scenario (25 %) relies on consensus estimates, established on an unverified basis (MarketBeat). The central scenario (50 %) describes a consolidation until the fourth quarter results at the end of November 2026, with intact operational quality and a valuation premium (PER ~35) not re-rated. The bear scenario (25 %) corresponds to a break of the floor of the consolidation zone with bearish extension.

Risks

The financial structure is the main fragility, with median net debt/EBITDA leverage of 5,9x (mean 6,1x) in a rate regime at 3,50-3,75 % and an Altman Z-Score in a penalized zone. The weight of interest costs limits EPS growth (+11 %) to half that of sales (+23 %). Antitrust regulatory pressure and pressure on billing to the US Department of Defense (DoD) remain chronic. A close below the floor of the consolidation zone with a confirmed bearish extension would match the bear scenario and weaken the central scenario.

Market positioning (short sellers)

Short interest / shares outstanding: 1.52 %
Days to cover: 1.49
Settlement date: 2026-08-14
Source: FINRA (disseminated on 2026-08-26)

Market information published by FINRA (consolidated short interest, all venues), no directional comment.

Upcoming catalysts

Date	Description
September 15, 2026	FOMC. Impact on Premium Discretionary Consumption
November 5, 2026	Q4 FY2026 Results. Defense/Commercial Margins

Signal history (last 12 months)

Date	Signal	New fact
September 3, 2026	weak (3/3)	No dated new fact since the verdict of 2026-08-31. The price of 02/09/2026 at 1 153,75 USD was already included in the score of 2026-09-02 (-3,50, identical). The layers marked [perime possible] and the missing data (current leverage, quantified forecasts, ETF flows, 13F) do not constitute new facts. Informative analysis, without recommendation.
August 31, 2026	weak (single draw, outside the three-draw protocol)	unchanged

Frequently asked questions

Why does the signal remain weak despite the operational quality?

The As Defined EBITDA margin of 52,8 % and organic growth of about 13 % attest to the rent on spare parts. But debt close to 6x EBITDA triggers two major safeguards, debt and the Altman Z-Score, for -5,5 deterministic points. The score thus stands at -3,50 and the share price trades below the 50 and 200 session moving averages despite results above expectations, which keeps the signal at the weak level.

How is the score of -3,50 explained?

Two major safeguards weigh -5,5 deterministic points: the median net debt/EBITDA leverage of 5,9x (mean 6,1x), penalized by -2,5 points, and the Altman Z-Score in a penalized zone, for -3,0 points. The total score of -3,50 results from this penalty, partially offset by other criteria. The vote stands at 3/3 and the signal at weak.

What does the flow reading of the stock reveal?

After good results, the share price remains 7,6 % below its 50 session moving average and 9,2 % below its 200 session moving average. The whole long term performance comes from opening gaps, with a systematic intraday distribution of -6,5 bp per session. This profile of trading on information, without institutional accumulation, weighs on the price structure.

Are growth and the accounts reliable?

What regulatory risks weigh on the group?

Antitrust regulatory pressure and pressure on billing to the US Department of Defense (DoD) remain chronic. A letter from Warren, Garamendi and Pocan illustrates this scrutiny, in a group whose model rests on proven pricing power. This risk adds to the structural debt and to the gap between sales growth (+23 %) and EPS growth (+11 %).

Sources

The official filings below are the issuer's own, matched to this stock by its identifier (LEI, CIK or ISIN). The figures quoted above come from an automated arbitration: they have not been re-checked one by one.

August 4, 2026 — 2.02 Results of Operations and Financial Condition; 9.01 Financial Statements and Exhibits (SEC · 8-K)
August 4, 2026 — 10-Q (SEC · 10-Q)
July 27, 2026 — 8.01 Other Events; 9.01 Financial Statements and Exhibits (SEC · 8-K)
July 24, 2026 — 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers (SEC · 8-K)
July 13, 2026 — 8.01 Other Events (SEC · 8-K)

Automated AI analysis: limitations and transparency

This content is an automated analysis produced using artificial intelligence. Personal analysis for information purposes — no personalised investment advice. MMR content consists of general research. It does not take account of your financial circumstances, objectives or risk tolerance. Data, analyses and results, including those produced using artificial intelligence, may contain errors, be incomplete or become outdated. No return or outcome is guaranteed. All investments carry a risk of partial or total loss of capital. Past performance and simulations do not predict future results. Before making any decision, check information against original sources and, where necessary, consult an authorised professional. You remain responsible for your investment decisions. This notice does not exclude or limit any liability that cannot legally be excluded or limited.
Tool and analysis: QDNA, Aurélien Ambert.
Analysis (arbitration) completed on September 3, 2026; this page was completed on September 3, 2026 at 23:04 (UTC).
Interests: no position in the stock analysed (TDG) is recorded in the data consulted on September 12, 2026 (UTC). This does not confirm the absence of holdings or other interests. The situation at the analysis publication date has not been reconstructed.
This declaration covers only recorded positions in this stock; it is not an exhaustive verification of other interests or remuneration.
Methodology: analysis chain, score formula and scale described on the public methodology page.
Analysis horizon: 2035.