Why TransDigm (TDG) Stock Is Falling Today

What Happened?

Shares of aerospace and defense company TransDigm (NYSE:TDG) fell 12.5% in the afternoon session after the company reported third-quarter financial results that fell short of analyst expectations for both revenue and earnings. 

The aircraft components manufacturer posted revenue of $2.24 billion and adjusted earnings per share of $9.60, both of which missed Wall Street estimates. TransDigm explained the shortfall resulted from its commercial Original Equipment Manufacturer (OEM) market, where companies build parts for other manufacturers' final products. The company cited lower-than-expected aircraft production rates and customers who reduced their parts inventories, a practice called destocking. Compounding the issue, TransDigm also trimmed its full-year sales guidance, which signaled potential challenges ahead.

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What Is The Market Telling Us

TransDigm’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for TransDigm and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 6.2% on the news that the company reported weak first quarter 2025 results which included a small revenue miss, although it narrowly topped analysts' EBITDA and adjusted EPS expectations due to better profitability. 

Looking ahead, the company reaffirmed previously-provided revenue and adjusted EPS guidance. Overall, this was a fine quarter, but it did not feature enough clear positives for the market.

TransDigm is up 11.7% since the beginning of the year, but at $1,401 per share, it is still trading 13.6% below its 52-week high of $1,621 from July 2025. Investors who bought $1,000 worth of TransDigm’s shares 5 years ago would now be looking at an investment worth $2,970.

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