Aaon (AAON) AI Stock Analysis

• Market Cap: $6.64B
• Dividend Yield: 0.47%
• Average Volume (3M): 1.33M
• Price to Earnings (P/E): 55.5
• Beta (1Y): 1.51
• Revenue Growth: 5.39%
• EPS Growth: -34.28%
• Country: US
• Employees: 4,812
• Sector: Industrials
• Sector Strength: 73
• Industry: Construction
• EPS (TTM): 0.22
• Shares Outstanding: 81,530,680
• 10 Day Avg. Volume: 767,990
• 30 Day Avg. Volume: 1,334,654
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 5.14
• Enterprise Value/Gross Profit: 17.93
• Enterprise Value/Ebitda: 28.40
• 1Y Price Target: $96.50
• Price Target Upside: 18.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 66 Neutral
• Price Target: $88.00 ▲(8.44% Upside)

AAON's overall stock score reflects strong profitability and a stable balance sheet, but is weighed down by cash flow challenges and high valuation. Technical indicators are mixed, and while the earnings call provides some optimism, significant operational challenges remain.

Positive Factors

Order Growth

AAON-branded orders were strong with backlog up 93% year-over-year.

Product Innovation

The new Alpha Class Extreme heat pump is highly attractive to national accounts with sustainability targets due to being the only heat pump in the market fully efficient down.

Production Improvement

Production has improved as ERP has stabilized, leading to better production rates than before.

Negative Factors

ERP Issues

ERP issues hurt AAON-branded production, causing missed expectations in sales.

Gross Margin Concerns

The biggest negative surprise in the gross margin outlook was BASX gross margins, which were assumed to be in the high-20% to low-30% range.

Stock Performance

Shares closed down 16% following disappointing midterm outlooks for both gross margin and top-line growth.

Aaon Business Overview & Revenue Model

Company Description

Aaon, Inc. is a leading manufacturer of heating, ventilation, and air conditioning (HVAC) equipment based in the United States. The company specializes in producing high-quality, energy-efficient units primarily for commercial and industrial applications. Aaon's product offerings include packaged rooftop units, chillers, and custom air handling units, which are designed to meet the diverse needs of various sectors such as healthcare, education, and hospitality.

How the Company Makes Money

Aaon generates revenue primarily through the sale of its HVAC products, which includes packaged units, chillers, and air handling systems. The company focuses on providing energy-efficient solutions that not only meet regulatory standards but also appeal to cost-conscious customers seeking long-term savings on energy costs. Key revenue streams include direct sales to contractors and distributors, as well as large-scale projects with commercial clients. Additionally, Aaon benefits from partnerships with construction firms and mechanical contractors that integrate its products into larger building projects. The company also offers aftermarket services and parts, contributing to recurring revenue. Factors such as rising energy efficiency regulations and increased demand for sustainable building practices provide a favorable market environment for Aaon’s growth.

Aaon Financial Statement Overview

Summary

AAON demonstrates strong profitability and a stable balance sheet, with a robust debt-to-equity ratio and strong return on equity. However, challenges in cash flow management, including negative free cash flow and a decline in revenue growth, are concerning.

Income Statement

Aaon shows strong profitability with a consistent gross profit margin around 28-34% and a net profit margin above 9%. However, recent TTM data indicates a decline in revenue growth rate (-15.9%), which is a concern. Despite this, the company maintains healthy EBIT and EBITDA margins, reflecting operational efficiency.

Balance Sheet

The company's balance sheet is robust with a manageable debt-to-equity ratio of 0.42 in the TTM period, indicating low leverage. Return on equity remains strong at 14.9%, showcasing effective use of equity. The equity ratio is solid, reflecting financial stability.

Cash Flow

Cash flow analysis reveals challenges, with negative free cash flow in the TTM period and a low operating cash flow to net income ratio of 0.07. Although there was a significant free cash flow growth rate of 35.1%, the negative free cash flow to net income ratio indicates potential liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.26B	1.20B	1.17B	888.79M	534.52M	514.55M
Gross Profit	360.87M	397.11M	399.02M	237.57M	137.83M	155.85M
EBITDA	227.75M	272.42M	274.79M	162.59M	99.73M	120.99M
Net Income	122.09M	168.56M	177.62M	100.38M	58.76M	79.01M
Balance Sheet
Total Assets	1.40B	1.18B	941.44M	813.90M	650.18M	449.01M
Cash, Cash Equivalents and Short-Term Investments	14.00K	14.00K	287.00K	5.45M	2.86M	79.03M
Total Debt	335.78M	170.96M	50.55M	78.25M	41.58M	202.00K
Total Liabilities	566.67M	350.65M	206.21M	253.19M	184.01M	98.14M
Stockholders Equity	832.75M	824.58M	735.22M	560.71M	466.17M	350.87M
Cash Flow
Free Cash Flow	-244.72M	-3.13M	54.60M	7.29M	5.82M	61.01M
Operating Cash Flow	-3.91M	192.53M	158.90M	61.32M	61.18M	128.81M
Investing Cash Flow	-227.17M	-213.07M	-109.31M	-76.21M	-158.72M	-61.27M
Financing Cash Flow	182.83M	18.03M	-46.51M	17.36M	18.73M	-29.63M

Aaon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 81.15
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 81.15 is below the 20-day moving average (MA) of 82.06, above the 50-day MA of 79.56, and below the 200-day MA of 96.88, indicating a neutral trend. The MACD of 0.35 indicates Positive momentum. The RSI at 48.86 is Neutral, neither overbought nor oversold. The STOCH value of 28.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AAON.

Aaon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LII	74 Outperform	$19.72B	24.00	112.94%	0.82%	7.92%	29.72%
CSL	72 Outperform	$16.76B	21.78	31.34%	1.03%	1.37%	5.96%
TT	71 Outperform	$91.93B	32.78	38.89%	0.88%	10.20%	24.57%
JCI	71 Outperform	$70.08B	31.81	12.52%	1.39%	-13.10%	40.62%
CARR	68 Neutral	$54.07B	24.93	10.79%	1.32%	-5.24%	-33.37%
AAON	66 Neutral	$6.64B	55.50	15.52%	0.47%	5.39%	-34.28%
Sector *	64 Neutral	$10.73B	15.74	7.56%	2.01%	2.76%	-15.10%

Aaon Corporate Events

AAON Declares Quarterly Cash Dividend Announcement

On August 14, 2025, AAON, Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.10 per share, payable on September 26, 2025, to stockholders of record as of September 5, 2025. This announcement reflects the company’s ongoing commitment to providing value to its shareholders and may positively impact its market positioning by reinforcing investor confidence.

AAON Reports Q2 2025 Results Amid Sales Decline

On August 11, 2025, AAON, Inc. reported its second quarter 2025 results, revealing a 0.6% decline in net sales to $311.6 million due to supply chain constraints and ERP system implementation challenges. Despite these setbacks, the company experienced strong demand for its BASX-branded data center equipment and anticipates production improvements in the second half of the year. However, the company has revised its full-year 2025 outlook downward due to ongoing inefficiencies, particularly at its Longview facility.

AAON Hosts Investor Day at NASDAQ MarketSite

On June 10, 2025, AAON will host an Investor Day at NASDAQ MarketSite in New York, featuring presentations from the CEO, CFO, and other executives. The event aims to provide insights into AAON’s strategic direction, highlighting its focus on innovation, customization, and automation in the HVAC industry. The company is transitioning to a brand-based structure to enhance efficiency and better leverage its manufacturing capabilities. This reorganization is expected to improve investor understanding and drive sustainable growth, particularly in the rapidly expanding data center market.