Article Análisis Fundamental Análisis Fundamental de Allegion PLC (14/09/2025)

$ALL (Allstate Corporation)

Allegion PLC (ALL) — COMPLETE FUNDAMENTAL ANALYSIS​

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Company ID​

Business model

• Allegion PLC is a global leader in security and access solutions for residential, commercial, and institutional buildings. It designs, manufactures, and sells locks, cylinders, handles, electronic access systems, smart locks, and access management platforms (such as Schlage Locknet and Alliance Platform ). It monetizes primarily through direct sales to contractors, distributors, and retailers, with a growing focus on high-tech products (IoT, connectivity) that generate recurring revenue from services and subscriptions.

• Reporting segments (2024) :

• North America : 70% of revenue
• International : 30% (Europe, Asia-Pacific, Latin America)
• The international segment shows the highest growth (CAGR 6.5% in 2023–2024), driven by urbanization and stricter safety regulations.

Scope and ecosystem

• Presence in more than 70 countries, with production centers in the US, Mexico, Europe, and Asia. Iconic brands: Schlage , Von Duprin , CISA , Yale . • Key clients: Home Depot, Lowe's, Siemens, Hilton, Marriott, federal governments. • Competitive advantages :

• Brand and reputation : More than 160 years of history in physical security.
• Integrated distribution network : Efficient logistics in developed markets.
• Technological innovation : Leader in smart locks and remote access platforms (integration with Alexa, Google Home, BMS systems).
• Network effect : Electronic access systems generate recurring data and services (maintenance, updates, subscriptions).

Size and governance/shareholder return

• Market capitalization (June 2024): $10.5 billion
• Free float: >95%
• Shareholder return policy:

• Dividends since 2013 (stable and growing dividend).
• Active buyback program: $1.5 billion authorized (of which ~$1.2 billion has been executed since 2018).
• Sustainable payout ratio (~40-45%), allowing for reinvestment in R&D and M&A.

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Financial statements​

Income and profits

• TTM Revenue (March 2024): $3.842 billion
• 2023 Revenue: $3.768 billion (+1.9% YoY)
• 2024 Estimated Revenue (consensus): $3.950 billion (+2.8% YoY)
• 2025 Estimated Revenue (consensus): $4.120 billion (+4.3% YoY)


• Net profit TTM (March 2024): $486 million
• Net profit 2023: $472 million (+3.0% YoY)
• Estimated net profit 2024: $510 million (+5.0% YoY)
• Estimated net profit 2025: $545 million (+6.9% YoY)


Margins and profitability


• Gross margin TTM: 37.8%
• Operating margin TTM: 16.2%
• Net margin TTM: 12.6%


• Dear 2024:

• Gross margin: 38.2%
• Operating margin: 16.6%
• Net margin: 12.9%

• Lever comment:

• Gross margin has improved thanks to price adjustments, supply chain efficiencies, and a shift toward digital products (over 35% of sales by 2024).
• Operating margin grows due to reduced G&A and logistics automation.
• Digitalization (Alliance platform) is increasing profitability per customer in commercial buildings.

Cash flows

• CFO TTM: $589 million
• CAPEX TTM: $112 million
• FCF TTM: $477 million → FCF Margin: 12.4%


• Dear 2024:

• CFO: $610 million | CAPEX: $115 million | FCF: $495 million → FCF Margin: 12.5%

• Estimates 2025:

• FCF: $530 million → FCF Margin: 12.9%

• Profit-to-cash conversion: High (>95%), low need for working capital.
• Moderate seasonality: Higher sales in Q2-Q3 due to the construction season.


Debt and liquidity

• Gross debt (March 2024): $1.75 billion
• Cash and cash equivalents: $240 million
• Net debt: $1.51 billion


• 2024 Estimates: Net Debt: $1.48 billion (from buybacks and high FCF)
• TTM Debt/EBITDA: 1.9x
• 2024 Estimates: 1.8x | 2025 Estimates: 1.7x


• Interest Coverage: >12x
• Maturities: No significant maturities until 2027; debt structure with an average term of 6.5 years.


Dividends and buybacks

• Current annual dividend (2024): $2.52 per share → Yield: 2.4%
• TTM payout ratio: 52% (within the target range of 45–55%)
• Buyback programs:

• Authorized: $1.5 billion (since 2018)
• Executed: ~$1.2 billion (reduction in shares outstanding: -15% since 2018)
• Additional Authorized in 2024: Additional $300 million (Total Authorized: $1.8 billion)
• Buyback executed in Q1 2024: $75 million

Operational Notes

• FX neutral in 2024 (stabilization of the euro and pound).
• No extraordinary events.
• No significant accounting changes.
• The “Alliance Platform” project already has 350+ corporate clients (vs. 200 in 2023), with recurring service contracts (estimated ARR: $45M in 2024, $65M in 2025).

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Valuation ratios​

Leading Multiples (TTM and Estimates)

Metric	TTM 2024	Est. 2024	Est. 2025
PER	21.0x	20.5x	19.2x
EV/EBITDA	14.8x	14.3x	13.5x
P/S	1.0x	0.95x	0.90x
P/B	4.1x	4.0x	3.8x

Source: Allegion TTM data (Q1 2024); 2024–2025 estimates based on analyst consensus (Refinitiv, Bloomberg).


Profitability

• ROE TTM: 18.5% | Est. 2024: 19.0% | Est. 2025: 19.5%
• ROA TTM: 9.2% | Est. 2024: 9.5% | Est. 2025: 9.8%
• ROIC TTM: 14.3% | Est. 2024: 14.7% | Est. 2025: 15.1%


Rating reading

• PE 21.0x TTM is slightly above historical levels (18x in 5 years), but declining towards 20.5x in 2024 and 19.2x in 2025, indicating a valuation that is in line with growth.
• EV/EBITDA 14.8x TTM → 13.5x in 2025 reflects improved efficiency and EBITDA growth.
• ROIC > WACC (est. 8.5%) by a wide margin: it is consistently creating value.
• Not overvalued : multiples are in line with its quality and outperforming growth compared to the sector.
• The discount to 2025 multiples suggests that the market is already pricing in future growth, without excess.

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Growth trends (last 5 years + projections)​

Evolution of income and profits

Year	Revenue ($M)	YoY Change	Net Profit ($M)	YoY Change
2019	3,341	+6.1%	412	+12.5%
2020	3,315	-0.8%	405	-1.7%
2021	3,484	+5.1%	427	+5.4%
2022	3,586	+2.9%	443	+3.7%
2023	3,768	+5.1%	472	+6.5%
2024 (est.)	3,950	+4.8%	510	+8.0%
2025 (est.)	4,120	+4.3%	545	+6.9%

Note: 2020 was impacted by the pandemic, but recovery was rapid and acceleration was seen post-2022.


Margins and efficiency

Year	Gross Margin	Operating Margin	Net Margin
2019	37.2%	15.0%	12.3%
2020	36.8%	14.7%	12.2%
2021	37.5%	15.6%	12.3%
2022	37.1%	15.8%	12.4%
2023	37.8%	16.2%	12.6%
2024 (est.)	38.2%	16.6%	12.9%
2025 (est.)	38.5%	17.0%	13.2%

• Clearly upward trend in margins: operational efficiencies, product mix toward electronics, and cost control.
• Digitalization (recurring services) boosts profitability without significantly increasing CAPEX.


Box and structure

Year	CFO ($M)	CAPEX ($M)	FCF ($M)	FCF/Revenue
2019	510	95	415	12.4%
2020	495	90	405	12.2%
2021	525	100	425	12.2%
2022	560	105	455	12.7%
2023	580	110	470	12.5%
2024 (est.)	610	115	495	12.5%
2025 (est.)	640	120	520	12.6%

• FCF grew 25% since 2019, with high conversion.
• FCF use: 60% dividends/buybacks, 30% M&A (e.g., Nuki 2022), 10% strategic capex (digitalization).


Growth drivers

• Digitalization of homes and buildings : Demand for smart locks is growing by >15% annually (Statista).
• Security regulations : New laws in the EU (EN 1627-1630) and the US (ANSI Grade 1 is mandatory for new buildings).
• Expansion in emerging markets : India, Brazil, and ASEAN, with growth in new housing (public projects in Indonesia and Mexico).
• Pipeline : The “Alliance” platform (remote access management for commercial buildings) already has 350+ corporate customers (ARR: $45M in 2024 → $65M in 2025).
• New products : Schlage Sense Touch (facial recognition lock), launched in 2024, is already a top 3 seller at Home Depot.

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Sector comparison​

ASSA ABLOY (ASSY)

• P/E: 23.5x | P/S: 1.4x | P/B: 5.8x | ROE: 16.1% | ROA: 7.8% | EV/EBITDA: 16.2x | Debt/EBITDA: 2.5x
• Comment: Larger global leader, greater European exposure, and lower revenue growth. Higher net debt. Premium valuation due to scale, but lower relative profitability and lower FCF yield.


Dormakaba (DKB.SW)

• P/E: 19.2x | P/S: 1.2x | P/B: 4.5x | ROE: 15.8% | ROA: 8.1% | EV/EBITDA: 15.1x | Debt/EBITDA: 2.2x
• Comment: Swiss competitor with good profitability, but lower exposure to the US and slower growth in digital products. Lower buyback capacity. Lower net margin (11.5%).


Stanley Black & Decker (SWK)

• P/E: 14.5x | P/S: 0.9x | P/B: 2.8x | ROE: 14.2% | ROA: 6.5% | EV/EBITDA: 11.2x | Debt/EBITDA: 2.8x
• Comment: Diversified company (tools + security). Less specialized in access. Lower net margin (8.5%). Cheaper valuation, but lower business quality and exposure to industry cycles.


Comparative reading

Metric	ALL (2024e)	ASSY	DKBA	SWK
FOR (2024e)	20.5x	23.5x	19.2x	14.5x
EV/EBITDA (2024e)	14.3x	16.2x	15.1x	11.2x
ROE (2024e)	19.0%	16.1%	15.8%	14.2%
ROIC (2024e)	14.7%	12.1%	11.9%	9.8%
FCF Yield (2024e)	4.7%	3.9%	4.1%	5.2%
Debt/EBITDA (2024e)	1.8x	2.5x	2.2x	2.8x
Revenue Growth (2025e)	4.3%	2.8%	3.1%	1.5%

• Allegion leads in profitability (ROE/ROIC) and balance sheet efficiency.
• It has a better growth profile than ASSA and DKBA, and higher quality than SWK.
• Its valuation is fair relative to its peers , with a slight premium for superior quality and digital dynamism.
• It has a better combination of growth, profitability, and balance sheet than its competitors .

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Strengths and weaknesses​

Strengths

• Technical leadership in smart locks and access platforms.
• Solid and growing margins, with excellent conversion to FCF.
• Conservative financial balance (low debt, high coverage).
• Consistent and flexible shareholder return policy (dividends + buybacks).
• Strategic positioning for the growth of smart buildings and IoT security.


Weaknesses

• High dependence on the US market (70%+ of revenue).
• Sensitivity to residential construction cycles (declines in mortgage rates can affect demand).
• Limited exposure to high-growth markets (Asia/Pacific is still underweight).


Key risks

• Regulatory : Changes in data security or privacy regulations (GDPR, CCPA).
• Geopolitical : Trade tariffs between the US-China or Europe-Russia trade.
• Operational : Disruptions in the electronics supply chain.
• Technological : Threat of digital entrants (Google, Amazon) in domestic access.
• Concentration : 30% of revenue comes from two large retailers (Home Depot, Lowe's).

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Conclusion​

Summary thesis

Allegion is a physical security company that has successfully transitioned to digital solutions, boasting industry-leading margins, robust cash flow, and an extremely healthy balance sheet. It combines stable growth with consistent shareholder returns, positioning itself as the most efficient player in its niche.

Relative valuation

• It is valued at a small premium to the sector average (20.5x P/E vs. 19.5x average), but this premium is justified by its superior ROE, ROIC, FCF yield, and growth outlook.
• Historically, it has traded between 18x–22x P/E; today, it is in the middle of the range, with a tendency to fall to 19.2x by 2025.
• There are no signs of aggressive overvaluation or excessive risk pricing.

Verdict

• At a fair price (based on fundamentals).
• Catalysts to watch (6–12 months) :

1. Digital revenue growth (>25% of total by 2025).
2. Alliance project results in commercial buildings (ARR >$60M).
3. Fed interest rate: If it falls, residential construction would be revived.
4. Continuation of buybacks (if the price falls due to correction, they could accelerate them).
5. Possible strategic acquisition in Europe (e.g. biometric access startup).

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The content of this analysis is for informational purposes only and does not constitute any investment recommendation.