ALSN Should I Buy
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Allison Transmission Holdings Inc (ALSN) is not an ideal buy for a beginner investor with a long-term strategy at this time. While the stock has shown recent price strength and technical indicators are bullish, the company's financial performance has been underwhelming, with significant YoY declines in revenue, net income, and EPS. Analysts have mixed ratings, with some expressing concerns about choppy end markets and a below-consensus 2026 outlook. Additionally, there are no strong proprietary trading signals or significant positive catalysts to justify immediate investment.
The stock is currently in a bullish trend with MACD positively expanding, RSI indicating overbought conditions at 82.198, and moving averages showing a bullish alignment (SMA_5 > SMA_20 > SMA_200). Key resistance levels are at R1: 123.988 and R2: 126.492, with support at S1: 115.882 and S2: 113.378.
Completion of Dana's Off-Highway business acquisition, enhancing market share and product portfolio.
Improved gross margin in Q4 2025, up 2.50% YoY.
Strong performance in the defense segment with a 26% YoY increase in net sales.
Q4 2025 financials showed a 7.41% YoY revenue decline, a 43.43% YoY drop in net income, and a 41.71% YoY drop in EPS.
Analysts cite choppy end markets and a below-consensus 2026 outlook.
Overbought RSI indicates potential near-term price correction.
In Q4 2025, revenue dropped to $737 million (-7.41% YoY), net income fell to $99 million (-43.43% YoY), and EPS decreased to $1.16 (-41.71% YoY). However, gross margin improved to 48.03% (+2.50% YoY).
Analysts have mixed ratings. Oppenheimer raised the price target to $135 with an Outperform rating, citing cost reductions and price increases. Citi and BofA remain Neutral and Underperform, respectively, citing choppy end markets and a below-consensus 2026 outlook. Raymond James upgraded the stock to Strong Buy in December 2025, citing the Dana acquisition as a positive strategic move.
