ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
Allison Transmission Holdings ROE % Related Terms
Allison Transmission Holdings ROE % 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.
For the Auto Parts subindustry, Allison Transmission Holdings's ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Allison Transmission Holdings's ROE % distribution charts can be found below:
* The bar in red indicates where Allison Transmission Holdings's ROE % falls into.
* 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.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
ROE % is displayed in the 30-year financial page.
Allison Transmission Holdings (ALSN) has a ROE % of 23.77% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Allison Transmission Holdings and its competitors. This is 61% below median its historical median of 60.28. Over the past decade, Allison Transmission Holdings' ROE % has ranged from 18.95 to 94.81. According to the industry distribution chart, Allison Transmission Holdings ranks #60 out of 1308 companies in the Vehicles & Parts industry, placing it in the top 4.6%.
Is Allison Transmission Holdings' ROE % too high?
Allison Transmission Holdings' current ROE % of 23.77% is 61% below median its 10-year median of 60.28. Over the past 10 years, this metric has ranged from a low of 18.95 to a high of 94.81. The Vehicles & Parts industry median ROE % is 6.62. Allison Transmission Holdings' value of 23.77% is 259.1% above this industry median. Based on the distribution chart, Allison Transmission Holdings ranks #60 out of 1308 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' ROE % compare to ALV and MBLY?
According to the Vehicles & Parts industry distribution chart, Allison Transmission Holdings ranks #60 out of 1308 companies for ROE %. This places Allison Transmission Holdings in the top 5% of its industry — outperforming the majority of peers. The industry median ROE % is 6.62. Allison Transmission Holdings' value of 23.77% is 259.1% above this benchmark. Historically, Allison Transmission Holdings' own ROE % has ranged from 18.95 to 94.81 over the past decade. While the company's 10-year median is 60.28 vs. the industry median of 6.62, 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 ROE % for a Vehicles & Parts company?
The median ROE % among Vehicles & Parts companies is 6.62, based on 1,308 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Allison Transmission Holdings's current ROE % of 23.77% is 259.1% 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Allison Transmission Holdings and its competitors. For the Vehicles & Parts industry, the median ROE % is 6.62 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Allison Transmission Holdings's current ROE % is 23.77%, which is 61% below median its own 10-year median of 60.28. 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 ROE % is 23.77%, which is 61% below median its 10-year median of 60.28 and 259.1% above the Vehicles & Parts industry median of 6.62. 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 ROE % calculated?
ROE % is calculated from a company's financial statements. For Allison Transmission Holdings (ALSN), the current ROE % is 23.77% 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:
ROE %: 23.77% (61% below median its 10-year median of 60.28)
GF Value™: $124.08 vs. price of $119.68 (3.5% below fair value)
Industry Position: 259.1% above the Vehicles & Parts median (#60 of 1308)
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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