Allison Transmission HoldingsALSN +2.29%95 Operating Margin % is 13.87% as of Mar. 2026, which is 54% below its 10-year median of 30.22. GuruFocus rates ALSN with a GF Score™ of 95/100 and a GF Value™ of $124.08 (Fairly Valued). The stock has 3 warning signs investors should review. Among 1,325 Vehicles & Parts companies, Allison Transmission Holdings ranks better than 97.28% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Allison Transmission Holdings Operating Margin % Related Terms
Allison Transmission Holdings Operating Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ALSN vs ALV, MBLY, LEA: Operating Margin % Comparison
For the Auto Parts subindustry, Allison Transmission Holdings's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Allison Transmission Holdings Operating Margin % vs Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Allison Transmission Holdings's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Allison Transmission Holdings's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Allison Transmission Holdings (ALSN) has a Operating Margin % of 13.87% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Allison Transmission Holdings and its competitors. This is 54% below median its historical median of 30.22. Over the past decade, Allison Transmission Holdings' Operating Margin % has ranged from 23.43 to 34.02. According to the industry distribution chart, Allison Transmission Holdings ranks #36 out of 1325 companies in the Vehicles & Parts industry, placing it in the top 2.7%.
Is Allison Transmission Holdings' Operating Margin % too high?
Allison Transmission Holdings' current Operating Margin % of 13.87% is 54% below median its 10-year median of 30.22. Over the past 10 years, this metric has ranged from a low of 23.43 to a high of 34.02. The Vehicles & Parts industry median Operating Margin % is 4.86. Allison Transmission Holdings' value of 13.87% is 185.4% above this industry median. Based on the distribution chart, Allison Transmission Holdings ranks #36 out of 1325 companies in the Vehicles & Parts industry, which is in the top quartile — a strong position relative to peers. Overall, Allison Transmission Holdings has a GF Score™ of 95/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Allison Transmission Holdings' Operating Margin % compare to ALV and MBLY?
According to the Vehicles & Parts industry distribution chart, Allison Transmission Holdings ranks #36 out of 1325 companies for Operating Margin %. This places Allison Transmission Holdings in the top 3% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 4.86. Allison Transmission Holdings' value of 13.87% is 185.4% above this benchmark. Historically, Allison Transmission Holdings' own Operating Margin % has ranged from 23.43 to 34.02 over the past decade. While the company's 10-year median is 30.22 vs. the industry median of 4.86, Allison Transmission Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Vehicles & Parts company?
The median Operating Margin % among Vehicles & Parts companies is 4.86, based on 1,325 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Allison Transmission Holdings's current Operating Margin % of 13.87% is 185.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Allison Transmission Holdings and its competitors. For the Vehicles & Parts industry, the median Operating Margin % is 4.86 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Allison Transmission Holdings's current Operating Margin % is 13.87%, which is 54% below median its own 10-year median of 30.22. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Allison Transmission Holdings stock overvalued right now?
Based on GuruFocus' analysis, Allison Transmission Holdings (ALSN) is currently considered Fairly Valued. The stock's GF Value™ is $124.08, compared to a current price of $119.68 — trading 3.5% below its estimated fair value. The current Operating Margin % is 13.87%, which is 54% below median its 10-year median of 30.22 and 185.4% above the Vehicles & Parts industry median of 4.86. Allison Transmission Holdings' overall GF Score™ is 95/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Allison Transmission Holdings (ALSN), the current Operating Margin % is 13.87% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Allison Transmission Holdings (ALSN) Overvalued in 2026?
Based on GuruFocus' analysis, Allison Transmission Holdings stock appears to be undervalued.
The current stock price of $119.68 is trading 3.5% below its estimated GF Value™ of $124.08.
GuruFocus considers Allison Transmission Holdings to be Fairly Valued.
Key valuation signals for ALSN:
Operating Margin %: 13.87% (54% below median its 10-year median of 30.22)
GF Value™: $124.08 vs. price of $119.68 (3.5% below fair value)
Industry Position: 185.4% above the Vehicles & Parts median (#36 of 1325)
No single metric tells the full story. See the ALSN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Allison Transmission Holdings Business Description
Allison Transmission is the largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles. Its automatic transmissions allow customers to achieve better fuel and operator efficiency than less expensive manual and automated manual transmissions. Allison serves several end markets, including on- and off-highway equipment and military vehicles. Its on-highway business commands approximately 60% global market share. The company's transmissions can be found in Class 4-8 trucks, buses, and a limited number of large passenger vehicles (heavy-duty pickup trucks and motorhomes). Allison also produces commercial hybrid propulsion systems and is developing fully electric powertrains.
95GF Score
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