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Aaon
(NASDAQ:AAON)
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Rating:57Neutral
Price Target:
$88.00
â–¼(-14.29% Downside)
Action:Reiterated
Date:07/31/26
The score is held back primarily by weak recent cash conversion/negative free cash flow and a weak technical trend (price below key moving averages). These are partly offset by strong balance-sheet positioning in the provided statements and a bullish earnings-call outlook with raised growth guidance, strong backlog/bookings, and an expected path to margin improvement. Valuation remains a headwind due to the high P/E and low yield.
Positive Factors
Large Backlog & Book-to-Bill
A $2.1B backlog with book-to-bill >1 (Basics >2) provides multi-month revenue visibility and demand pull for production. This structural backlog supports the company’s 40%+ revenue guidance and underpins capacity planning, order conversion and predictable top-line growth.
Negative Factors
Negative Free Cash Flow
Persistently negative free cash flow (~-$145M TTM) indicates cash generation lags reported earnings. Over several quarters this raises funding risk for capex and working capital, could pressure liquidity or force incremental financing if internal cash conversion does not improve.
Read all positive and negative factors
Positive Factors
Negative Factors
Large Backlog & Book-to-Bill
A $2.1B backlog with book-to-bill >1 (Basics >2) provides multi-month revenue visibility and demand pull for production. This structural backlog supports the company’s 40%+ revenue guidance and underpins capacity planning, order conversion and predictable top-line growth.
Read all positive factors
Aaon (AAON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.95B
Dividend Yield0.46%
Average Volume (3M)945.42K
Price to Earnings (P/E)64.6
Beta (1Y)1.67
Revenue Growth28.27%
EPS Growth-25.82%
CountryUS
Employees5,897
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)1.45
Shares Outstanding81,911,710
10 Day Avg. Volume1,019,669
30 Day Avg. Volume945,416
Financial Highlights & Ratios
PEG Ratio-1.59
Price to Book (P/B)6.95
Price to Sales (P/S)4.31
P/FCF Ratio-32.48
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$149.67Price Target Upside45.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)2.27
Revenue Forecast (FY)$2.08B
Aaon Business Overview & Revenue Model
Company Description
AAON, Inc., along with its affiliated companies, focuses on the engineering, manufacturing, promotion, and sale of heating and air conditioning systems throughout the United States and Canada. The enterprise's operations are divided into three dis...
How the Company Makes Money
AAON makes money primarily by manufacturing and selling HVAC equipment used in commercial and industrial applications. Revenue is generated mainly from product sales (e.g., packaged rooftop units, air-handling and make-up air systems, condensers, ...
Aaon Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 10, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and commercial performance: record revenue, sizable backlog, robust bookings (particularly in Basics/data-center cooling), meaningful EPS and EBITDA growth, and an upgraded full-year revenue growth outlook (40%–45%). The primary negatives are near-term margin pressure driven by intentional outsourcing, tariff and inflation effects, a sharp drop in reported gross margin, a decline in coil segment margin, and a very low quarter-end cash balance. Management characterizes the margin headwinds as temporary and tied to deliberate decisions to accelerate capacity and market share; guidance assumes margin recovery as internal capacity ramps. On balance, the company showed clear momentum and visibility into growth, while acknowledging short-term profitability trade-offs to secure share and delivery.Positive Updates
Record Revenue and Strong Top-Line Growth
Net sales of $496.9 million in Q1 2026, a 54% year-over-year increase and a company record; company now guiding full-year sales growth of 40%–45%.
Negative Updates
Near-Term Margin Pressure
Reported gross margin of 25.1% in Q1, down 170 basis points from 26.8% a year ago; management cites temporary margin headwinds from increased outsourcing, tariff-related costs and inflationary pressures.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Revenue and Strong Top-Line Growth
Net sales of $496.9 million in Q1 2026, a 54% year-over-year increase and a company record; company now guiding full-year sales growth of 40%–45%.
Read all positive updates
Company Guidance
Management's 2026 guidance calls for revenue growth of 40–45%, a gross margin of 27–28%, SG&A of 14–15% of sales and depreciation & amortization of $95–100 million, which they say implies roughly $1 billion of Basics revenue and will be supported by a backlog of $2.1 billion (book‑to‑bill >1 overall; Basics book‑to‑bill >2). For context Q1 produced $496.9 million of net sales (+54% YoY) with Basics sales +72% YoY and AAON‑branded sales +42% YoY, Q1 gross margin 25.1% (down 170 bps), non‑GAAP adjusted EBITDA $78.0 million (15.7% margin), diluted EPS $0.48 (+37% YoY), Q1 CapEx $52.9 million, operating cash flow $34 million, cash $1.1 million, debt $425.2 million (leverage 1.71x); management expects margins to improve through the year as internal capacity ramps and temporary outsourcing, tariff and ramp‑related pressures unwind.Aaon Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
82
Very Positive
Cash Flow
35
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.62B | 1.44B | 1.20B | 1.17B | 888.79M | 534.52M |
| Gross Profit | 424.32M | 385.72M | 397.11M | 399.02M | 237.57M | 137.83M |
| EBITDA | 249.58M | 225.84M | 272.42M | 274.79M | 162.59M | 99.73M |
| Net Income | 118.12M | 107.59M | 168.56M | 177.62M | 100.38M | 58.76M |
Balance Sheet | ||||||
| Total Assets | 1.79B | 1.69B | 1.18B | 941.44M | 813.90M | 650.18M |
| Cash, Cash Equivalents and Short-Term Investments | 13.00K | 13.00K | 14.00K | 287.00K | 5.45M | 2.86M |
| Total Debt | 450.87M | 424.65M | 170.96M | 50.55M | 78.25M | 41.58M |
| Total Liabilities | 855.50M | 791.52M | 350.65M | 206.21M | 253.19M | 184.01M |
| Stockholders Equity | 934.21M | 894.99M | 824.58M | 735.22M | 560.71M | 466.17M |
Cash Flow | ||||||
| Free Cash Flow | -145.22M | -191.42M | -3.13M | 54.60M | 7.29M | 5.82M |
| Operating Cash Flow | 43.74M | -861.00K | 192.53M | 158.90M | 61.32M | 61.18M |
| Investing Cash Flow | -193.31M | -192.42M | -213.07M | -109.31M | -76.21M | -158.72M |
| Financing Cash Flow | 148.29M | 188.00M | 18.03M | -46.51M | 17.36M | 18.73M |
Aaon Technical Analysis
Negative
102.67
Price Trends
122.26
Negative
109.08
Negative
100.58
Negative
Market Momentum
-5.30
Positive
33.99
Neutral
24.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAON, the sentiment is Negative. The current price of 102.67 is below the 20-day moving average (MA) of 105.82, below the 50-day MA of 122.26, and above the 200-day MA of 100.58, indicating a bearish trend. The MACD of -5.30 indicates Positive momentum. The RSI at 33.99 is Neutral, neither overbought nor oversold. The STOCH value of 24.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AAON.
Aaon Risk Analysis
Aaon disclosed 25 risk factors in its most recent earnings report. Aaon reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aaon Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $85.06B | 25.01 | 26.94% | 1.12% | 6.81% | 71.05% | |
69 Neutral | $98.77B | 36.07 | 34.49% | 0.83% | 6.36% | 7.42% | |
65 Neutral | $13.54B | 20.29 | 41.06% | 1.31% | 1.90% | -2.72% | |
65 Neutral | $14.96B | 24.41 | 65.30% | 0.97% | -2.11% | -5.59% | |
65 Neutral | $49.39B | 43.46 | 8.89% | 1.37% | -1.58% | -43.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $6.95B | 64.65 | 13.40% | 0.39% | 28.27% | -25.82% |
* Industrials Sector Average
AAON
Aaon
87.59
6.29
7.73%
CSL
Carlisle Companies
369.88
21.71
6.24%
TT
Trane Technologies
440.28
5.09
1.17%
JCI
Johnson Controls
143.88
38.76
36.88%
LII
Lennox International
417.45
-182.11
-30.37%
CARR
Carrier Global
61.39
-4.52
-6.85%
Aaon Corporate Events
Business Operations and StrategyExecutive/Board Changes
AAON Expands Board, Strengthens Governance for Growth
Positive
Jul 30, 2026
On July 28, 2026, AAON’s Board of Directors increased its size from nine to eleven members and appointed Robert L. Buttermore III and Patrick J. Jermain as independent directors, reflecting a formal amendment to the company’s bylaws. B...
Business Operations and StrategyFinancial Disclosures
AAON Highlights Growth Strategy at William Blair Conference
Positive
Jun 8, 2026
On June 2, 2026, AAON participated in the William Blair Growth Stock Conference in Chicago, where CEO and president Matt Tobolski and CFO and treasurer Andy Cheung presented the company’s strategy, operational progress and financial profile ...
Business Operations and StrategyExecutive/Board ChangesDividendsShareholder Meetings
AAON Shareholders Approve Governance Changes and Board Expansion
Positive
May 18, 2026
At its May 12, 2026 annual meeting, AAON stockholders re-elected directors Caron A. Lawhorn, Stephen O. LeClair and David R. Stewart to serve until the 2029 annual meeting, ratified Grant Thornton, LLP as independent auditor for 2026 and endorsed,...
Business Operations and StrategyStock BuybackFinancial Disclosures
AAON Reports Record Q1 Results and Boosts 2026 Outlook
Positive
May 7, 2026
On May 7, 2026, AAON reported first-quarter 2026 results showing net sales up 54.3% year over year to a record $496.9 million, driven by strong demand and increased production throughput across both AAON and BASX brands. GAAP diluted EPS rose 37.1...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.