What moat does TransDigm Group Incorporated have?

The advantage is the part already certified on that aircraft and the spare the manual asks for. The airline or the military can approve an alternative, and sometimes one already exists. The moat narrows if the fleet flies less, or if the alternative part enters the manual.

How do you read the TransDigm Group Incorporated radar?

Health is the debt that funds purchases and buybacks, not the airline's debt. Quality is the spare margin, higher than the new-part margin. Growth follows flight hours and catalogue purchases. P/E is read against a year with a large fleet in the air, not against that peak. Shareholder return is the dividend and the buyback, checked against cash. Do not read it as if every part were required to fly.

Which multiples matter for TransDigm Group Incorporated?

The P/E of a year of many flight hours is not normal earnings. EV/EBITDA is read with the debt of the purchases inside. Do not use HEICO's multiple as if the alternative and the proprietary part had the same margin, or Safran's, which sells the engine. A dash if TDG is missing.

What does this TransDigm Group Incorporated analysis leave out?

Not advice on TransDigm. Vaultflake does not count the share of proprietary sales and does not treat the part as the only one. This is not 80% of the margin. Read the filings. A past dividend is not a right. The table is a snapshot, not a target price.

TransDigm Group Incorporated (TDG) analysis

TransDigm Group Incorporated

Sector:Industrials · Aircraft Parts

Country:United States

Profile and moat

TransDigm designs aircraft parts that are certified on a specific programme, and sells the spare when the part wears out. The aftermarket is the expensive business. The aircraft does not stay on the ground because any TransDigm screw is missing: the part that matters is the one in that aircraft's manual. HEICO sells, on some part numbers, the approved alternative. It is not true that no substitute exists.

Some of the sales are proprietary parts and a large part of profit comes from the spare. This report does not state 90% or 80%. Certification makes a second source slow. It does not make it impossible. The debt of buying more parts stays. A year of few flight hours is a thin spare year.

The dividend and the buyback come from that cash. They have to fit. They are not a toll on the flight licence.

TransDigm Group Incorporated (TDG) analysis

TransDigm Group Incorporated

Sector:Industrials · Aircraft Parts

Country:United States

Profile and moat

The dividend and the buyback come from that cash. They have to fit. They are not a toll on the flight licence.

TransDigm Group Incorporated (TDG) analysis

Profile and moat

TransDigm Group Incorporated (TDG) analysis

Profile and moat

Radar axes

Limits of this report

Questions from this report

What moat does TransDigm Group Incorporated have?

How do you read the TransDigm Group Incorporated radar?

Which multiples matter for TransDigm Group Incorporated?

What does this TransDigm Group Incorporated analysis leave out?

Related reports in Industrials · Aircraft Parts

Safran SA

HEICO Corporation

General Dynamics Corporation

Apple Inc.

Microsoft Corporation

Alphabet Inc.