Allison Transmission Holdings, Inc. (NYSE:ALSN), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Allison Transmission Holdings's outlook and valuation to see if the opportunity still exists.

What Is Allison Transmission Holdings Worth?

Great news for investors – Allison Transmission Holdings is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $175.56, but it is currently trading at US$110 on the share market, meaning that there is still an opportunity to buy now. Allison Transmission Holdings's share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it's there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Allison Transmission Holdings generate?

Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Though in the case of Allison Transmission Holdings, it is expected to deliver a relatively unexciting earnings growth of 9.3%, which doesn't help build up its investment thesis. Growth doesn't appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since ALSN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you've been keeping an eye on ALSN for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy ALSN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you want to dive deeper into Allison Transmission Holdings, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Allison Transmission Holdings has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Allison Transmission Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.