Allison Transmission Holdings, Inc. (ALSN) Hits Fresh High: Is There Still Room to Run?

Have you been paying attention to shares of Allison Transmission (ALSN)? Shares have been on the move with the stock up 11.1% over the past month. The stock hit a new 52-week high of $109.3 in the previous session. Allison Transmission has gained 85.9% since the start of the year compared to the -7.5% move for the Zacks Auto-Tires-Trucks sector and the -26.2% return for the Zacks Automotive - Original Equipment industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 29, 2024, Allison Transmission reported EPS of $2.27 versus consensus estimate of $2.01 while it beat the consensus revenue estimate by 4.22%.For the current fiscal year, Allison Transmission is expected to post earnings of $8.07 per share on $3.16 billion in revenues. This represents a 9.05% change in EPS on a 3.97% change in revenues. For the next fiscal year, the company is expected to earn $8.95 per share on $3.37 billion in revenues. This represents a year-over-year change of 10.86% and 6.69%, respectively.Valuation MetricsAllison Transmission may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.Allison Transmission has a Value Score of B. The stock's Growth and Momentum Scores are D and C, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 13.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 12X. On a trailing cash flow basis, the stock currently trades at 11.6X versus its peer group's average of 5.2X. Additionally, the stock has a PEG ratio of 1.89. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Allison Transmission currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Allison Transmission passes the test. Thus, it seems as though Allison Transmission shares could have potential in the weeks and months to come.How Does ALSN Stack Up to the Competition?Shares of ALSN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Strattec Security Corporation (STRT). STRT has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.Earnings were strong last quarter. Strattec Security Corporation beat our consensus estimate by 528.95%, and for the current fiscal year, STRT is expected to post earnings of $1.98 per share on revenue of $547.73 million.Shares of Strattec Security Corporation have gained 3.6% over the past month, and currently trade at a forward P/E of 19.76X and a P/CF of 4.84X.The Automotive - Original Equipment industry may rank in the bottom 75% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for ALSN and STRT, even beyond their own solid fundamental situation.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report Strattec Security Corporation (STRT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks