Core Viewpoint - Allison Transmission's recent earnings report showed a decline in both earnings per share and revenues, raising concerns about future performance as the stock has outperformed the S&P 500 by approximately 7% in the past month [1][2]. Financial Performance - Q3 2025 earnings were reported at $1.63 per share, missing the Zacks Consensus Estimate of $1.95 and representing a 28% year-over-year decline [3]. - Quarterly revenues totaled $693 million, down 16% from the previous year and below the Zacks Consensus Estimate of $756 million [3]. Segmental Performance - North America On-Highway net sales fell 28% year-over-year to $327 million, missing estimates [4]. - Outside North America On-Highway net sales decreased by 3% to $122 million, also missing estimates [4]. - Global Off-Highway net sales dropped to $7 million from $20 million year-over-year, missing estimates [5]. - Defense end market net sales increased by 47% to $78 million, exceeding estimates [6]. - Service Parts, Support Equipment & Other net sales fell 5% to $159 million, missing estimates [7]. Financial Position - Gross profit decreased to $329 million from $396 million year-over-year due to lower volumes and unfavorable material costs [8]. - Adjusted EBITDA was $256 million, down from $305 million a year ago [8]. - Cash and cash equivalents increased to $902 million as of September 30, 2025, from $781 million at the end of 2024 [9]. - Long-term debt remained unchanged at $2.39 billion [9]. 2025 Outlook - The full-year 2025 net sales outlook has been revised to between $2,975 million and $3,025 million, down from the previous estimate of $3,075-$3,175 million [11]. - Expected net income is now projected to be between $620 million and $650 million, revised from $640 million to $680 million [11]. - Adjusted EBITDA is now expected to be between $1,090 million and $1,125 million, down from the previous estimate [12]. - Adjusted free cash flow is projected to be between $600 million and $620 million, revised down from $620 million to $660 million [13]. Estimate Trends - There has been a downward trend in estimates, with a consensus estimate shift of -5.49% over the past month [14]. VGM Scores - Allison Transmission has a subpar Growth Score of D and a Momentum Score of F, but a strong Value Score of A, placing it in the top 20% for this investment strategy [15]. Industry Performance - Allison Transmission is part of the Zacks Automotive - Original Equipment industry, where Autoliv, Inc. reported a revenue increase of 5.9% year-over-year [17].