Allison Transmission Holdings — 5.45/10
BELOW BAR
NYSE: ALSN | Legacy near-monopolist (~80% NA fully-automatic commercial transmissions) that just transformed via the ~$2.7B Dana Off-Highway acquisition (Jan 2026). The crown-jewel monopoly is now a minority of revenue (~27%) while the largest segment (~46%, Off-Highway) is fragmented and competitive. Legacy organic revenue declining -4.3% in Q1'26 (NA truck down-cycle). FCF flat, not growing. FY2025 guidance missed and cut twice. Net leverage jumped to ~4x. Quality gate: 2 NOs -- below quality bar.
Company stats
| CEO | Dave Graziosi (17+ yr tenure) | CFO | Scott Mell (since Q1 2025) |
| FY2025 Revenue | $3,010M (-6.7% YoY) | FY2025 Adj EBITDA | $1,130M |
| Legacy Share | ~80% NA fully-automatic transmissions | Off-Highway | ~46% of forward revenue |
| FYE | December 31 | Quality Gate | BELOW BAR (2 NOs) |
Score breakdown
| Dimension | Score | Weight | Weighted |
|---|---|---|---|
| Financial Trends | 4 | 25% | 1.00 |
| Thematic Exposure | 6 | 35% | 2.10 |
| Management Quality | 5 | 20% | 1.00 |
| Investor Sentiment | 6 | 5% | 0.30 |
| Concerns & Risks | 7 | 15% | 1.05 |
| Composite | 100% | 5.45 |
Investment thesis
A genuine legacy monopolist (~80% NA, sole-source defense) that clears the oligopoly gate but has materially diluted its quality profile with the Dana Off-Highway acquisition. The largest segment is now fragmented and competitive (~46% of forward revenue), legacy organic revenue is contracting (-4.3% in Q1'26), FCF is flat/declining ($661M, not growing over three years), and FY2025 guidance was missed and cut twice. The entry requires an exceptional catalyst -- truck-cycle inflection + Off-Highway synergy realization ($120M target) -- to underwrite. Defense (+64% YoY) is the brightest spot but only ~6% of revenue.
Quality gate: 2 NOs. Oligopoly = YES; positiveGrowingFcf = NO; managementTrackRecord = NO. Below quality bar.
Data sourced from Daloopa (company_id: 9173). Analysis date: 2026-06-25.