Allegion (ALLE) AI Stock Analysis

• Market Cap: $12.53B
• Dividend Yield: 1.34%
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 20.4
• Beta (1Y): 0.80
• Revenue Growth: 5.48%
• EPS Growth: 16.27%
• Country: US
• Employees: 14,400
• Sector: Industrials
• Sector Strength: 91
• Industry: Security & Protection Services
• EPS (TTM): 1.86
• Shares Outstanding: 86,049,290
• 10 Day Avg. Volume: 834,066
• 30 Day Avg. Volume: 1,068,257
• PEG Ratio: 4.35
• Price to Book (P/B): 7.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.02
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 8.07
• Enterprise Value/Ebitda: 3.79
• 1Y Price Target: $137.00
• Price Target Upside: -5.93% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

Allegion demonstrates strong financial performance and positive earnings guidance, driven by robust revenue growth and margin expansion. The technical indicators show upward momentum, although caution is advised due to overbought signals. Valuation appears fair, supported by a reasonable P/E ratio and dividend yield. The company's strategic focus on product innovation and market expansion further supports its growth potential.

Positive Factors

Financial Performance

The stronger margins and a lower tax rate contributed to an adjusted EPS of $1.86, surpassing both Morgan Stanley estimates and consensus.

Growth in Americas

Organic sales grew by 3.5%, led by strong performance in the Americas.

Operational Efficiency

Operating profit margins expanded to 22.1% due to favorable volume leverage and regional mix.

Negative Factors

International Operations

International operations experienced a decline in margins by 100bps.

Macroeconomic Concerns

Despite the positive results, the company reiterated its unchanged guidance for 2025, indicating possible lower volume expectations due to macroeconomic concerns.

Market Environment

The expected muted reaction for ALLE shares is due to negative revisions in next twelve-month consensus forecasts.

Allegion Business Overview & Revenue Model

Company Description

Allegion plc manufactures and sells mechanical and electronic security products and solutions worldwide. The company offers door closers, controls, and exit devices; locks, locksets, portable locks, and key systems and services; electronic security products and access control systems; time, attendance, and workforce productivity systems; doors and door systems; and other accessories. The company sells its products and solutions to end-users in commercial, institutional, and residential facilities, including education, healthcare, government, hospitality, commercial office, and single and multi-family residential markets under the CISA, Interflex, LCN, Schlage, SimonsVoss, and Von Duprin brands. It sells its products and solutions through distribution and retail channels, such as specialty distribution, e-commerce, and wholesalers, as well as through various retail channels comprising do-it-yourself home improvement centers, on-line and e-commerce platforms, and small specialty showroom outlets. Allegion plc was incorporated in 2013 and is headquartered in Dublin, Ireland.

How the Company Makes Money

Allegion makes money primarily through the sale of its security products and solutions. The company's revenue model is centered around manufacturing and distributing a wide range of mechanical and electronic security products, which are sold to a diverse customer base that includes commercial enterprises, institutions, and residential customers. Key revenue streams include the sale of locks, door hardware, electronic security systems, and access control solutions. Additionally, Allegion benefits from strategic partnerships and alliances that enhance its market reach and product offerings. The company's earnings are influenced by factors such as technological advancements, regulatory requirements, and global demand for security solutions.

Allegion Financial Statement Overview

Summary

Allegion’s financials reflect strong performance with consistent revenue growth, high profitability, and efficient cash flow management. The company's leverage is moderate, but it effectively uses its equity to generate returns. The financial health is robust, with potential for continued growth in the industry.

Income Statement

Allegion demonstrates strong revenue growth with a steady increase over the years, culminating in a healthy revenue growth rate of 3.73% in TTM. The company maintains robust profitability, evidenced by high gross and net profit margins of 58.07% and 16.28% respectively in TTM. EBITDA and EBIT margins are also strong, reflecting operational efficiency and effective cost management.

Balance Sheet

The balance sheet showcases a solid equity base with an improving equity ratio of 35.21% in TTM. Debt-to-equity ratio is moderately high at 1.24, suggesting a balanced use of debt and equity. Return on Equity stands impressively at 38.70% in TTM, indicating efficient use of shareholder funds to generate profits.

Cash Flow

Allegion's cash flow is robust, with a steady increase in free cash flow, marked by a 10.08% growth in TTM. The company has a strong operating cash flow to net income ratio of 1.17, indicating solid cash generation capabilities. The free cash flow to net income ratio of 1.03 further underscores the company's ability to convert profits into cash effectively.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.82B	3.77B	3.65B	3.27B	2.87B	2.72B
	Gross Profit
1.70B	1.67B	1.58B	1.32B	1.20B	1.18B
	EBIT
805.00M	780.70M	708.40M	586.40M	530.20M	403.50M
	EBITDA
945.10M	916.90M	821.90M	688.30M	657.30M	497.50M
	Net Income Common Stockholders
621.90M	597.50M	540.40M	458.00M	483.00M	314.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
494.50M	503.80M	468.10M	288.00M	397.90M	480.40M
	Total Assets
4.56B	4.49B	4.31B	3.99B	3.05B	3.07B
	Total Debt
2.00B	2.00B	2.02B	2.09B	1.44B	1.43B
	Net Debt
1.50B	1.50B	1.55B	1.81B	1.04B	949.20M
	Total Liabilities
2.96B	2.99B	2.99B	3.05B	2.29B	2.24B
	Stockholders Equity
1.61B	1.50B	1.32B	944.50M	762.40M	829.40M
Cash Flow		Free Cash Flow
641.70M	582.90M	516.40M	395.50M	443.20M	443.20M
	Operating Cash Flow
727.50M	675.00M	600.60M	459.50M	488.60M	490.30M
	Investing Cash Flow
-213.00M	-228.40M	-129.10M	-994.10M	-31.60M	-56.70M
	Financing Cash Flow
-406.71M	-394.50M	-298.70M	437.00M	-529.30M	-321.90M

Allegion Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 145.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLE, the sentiment is Positive. The current price of 145.64 is above the 20-day moving average (MA) of 138.34, above the 50-day MA of 131.55, and above the 200-day MA of 134.64, indicating a bullish trend. The MACD of 3.88 indicates Negative momentum. The RSI at 68.02 is Neutral, neither overbought nor oversold. The STOCH value of 60.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALLE.

Allegion Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSSC	80 Outperform	$992.32M	22.66	27.48%	1.71%	-1.05%	-2.78%
MSA	79 Outperform	$6.27B	22.01	26.22%	1.28%	0.75%	7.20%
ALLE	78 Outperform	$12.53B	20.45	42.05%	1.34%	5.48%	16.27%
REZI	76 Outperform	$3.14B	53.48	2.58%	―	14.02%	-69.91%
ADT	72 Outperform	$7.19B	14.70	16.26%	2.56%	-5.44%	-16.05%
BCO	68 Neutral	$3.69B	23.57	54.50%	1.10%	1.97%	41.88%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%

Allegion Corporate Events

Allegion Expands Board with Gregg Sengstack Appointment

Allegion plc has expanded its Board of Directors by appointing Gregg C. Sengstack, a seasoned executive with over 30 years of experience, to enhance their strategic oversight. Sengstack, known for his expertise in international markets and finance, will contribute to the Audit and Finance, Compensation and Human Capital, and Corporate Governance and Nominating Committees. His extensive leadership background, including roles at Franklin Electric, is expected to bolster Allegion’s global security solutions focus.