Is Allison Transmission Holdings, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Allison Transmission Holdings, Inc. has moved from expensive to attractive, indicating a shift towards a more favorable assessment. The company appears undervalued, supported by a P/E ratio of 12, a PEG ratio of 0.80, and an EV to EBITDA of 9.22. In comparison to peers, Allison's P/E ratio is significantly lower than Autoliv, Inc. at 18.06 and Donaldson Co., Inc. at 28.15, suggesting that it is priced more attractively relative to its earnings potential.
Allison's recent stock performance shows a 1-week return of 1.77%, slightly outperforming the S&P 500's 1.70%, but it has struggled over longer periods, with a year-to-date return of -25.15% compared to the S&P 500's 13.30%. Overall, the combination of strong valuation ratios and a favorable peer comparison supports the conclusion that Allison Transmission Holdings, Inc. is currently undervalued.