Aaon Inc (AAON)
NASDAQ:AAON
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Aaon
(NASDAQ:AAON)
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Rating:60Neutral
Price Target:
$98.00
â–²(4.28% Upside)
Action:ReiteratedDate:04/02/26
The score is held back primarily by the sharp 2025 cash-flow deterioration and margin pressure, despite strong balance-sheet flexibility. Guidance and backlog-driven growth outlook are constructive, but the stock’s weak technical posture and expensive valuation reduce near-term risk-adjusted attractiveness.
Positive Factors
Record backlog & strong revenue growth
A $1.3B backlog and 2.4 book-to-bill provide multi-quarter revenue visibility and validate product-market fit in data center and commercial channels. Durable backlog supports planned capacity utilization, helps smooth revenue through cycles, and underpins margin recovery as fixed costs absorb.
Negative Factors
Sharp operating cash-flow decline
A collapse in operating cash flow and deeply negative free cash flow raises earnings-quality and near-term funding risks. Persistent cash conversion issues could force higher external financing, constrain reinvestment, and make execution of multi-year ramp and margin targets more vulnerable.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog & strong revenue growth
A $1.3B backlog and 2.4 book-to-bill provide multi-quarter revenue visibility and validate product-market fit in data center and commercial channels. Durable backlog supports planned capacity utilization, helps smooth revenue through cycles, and underpins margin recovery as fixed costs absorb.
Read all positive factors
Aaon (AAON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.64B
Dividend Yield0.53%
Average Volume (3M)782.46K
Price to Earnings (P/E)57.8
Beta (1Y)1.42
Revenue Growth20.11%
EPS Growth-36.22%
CountryUS
Employees4,812
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)0.39
Shares Outstanding81,843,710
10 Day Avg. Volume874,249
30 Day Avg. Volume782,463
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 Cap0.98
Enterprise Value/Revenue5.21
Enterprise Value/Gross Profit19.47
Enterprise Value/Ebitda33.27
Forecast
1Y Price Target
$121.33Price Target Upside29.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.99
Revenue Forecast (FY)$1.56B
Aaon Business Overview & Revenue Model
Company Description
AAON, Inc., together with its subsidiaries, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment in the United States and Canada. The company operates through three segments: AAON Oklahoma, AAON Coil...
How the Company Makes Money
AAON primarily makes money by selling commercial HVAC equipment it manufactures, with revenue recognized from product sales to customers in the commercial/industrial HVAC market. Key revenue streams include (1) engineered HVAC units such as packag...
Aaon Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call reflected a strong commercial performance with significant revenue growth, accelerating Basics data center momentum, a much larger backlog, product innovation, and clear 2026 guidance for sales and margin improvement. However, the company faces meaningful near-term operational and financial challenges — compressed margins in Q4, ERP and supply-chain friction, extremely low year-end cash balances, a sharp drop in operating cash flow, and elevated debt. Management communicated concrete mitigation actions (capacity ramp, supply-chain investments, phased ERP rollouts) and confident guidance for 2026, indicating these issues are expected to be temporary and recoverable.Positive Updates
Strong Quarterly Revenue Growth
Net sales in Q4 increased 42.5% year-over-year to $424.2 million, driven by robust demand across both Basics and AAON brands.
Negative Updates
Compression of Gross and EBITDA Margins in Q4
Q4 gross margin slipped to 25.9% from 26.1% year-over-year; non-GAAP adjusted EBITDA margin fell to 15.2% from 15.8% a year ago, driven primarily by unabsorbed fixed costs and lower Tulsa volumes.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Quarterly Revenue Growth
Net sales in Q4 increased 42.5% year-over-year to $424.2 million, driven by robust demand across both Basics and AAON brands.
Read all positive updates
Company Guidance
AAON’s 2026 guidance calls for sales growth of 18–20%, a gross margin of 29–31%, SG&A of about 16% of sales, depreciation & amortization of $95–100 million, and planned CapEx of $190 million, with margin progression expected to be uneven by quarter as capacity ramps; management expects operating cash flow to improve materially in 2026. Management said the plan is backed by a $1.3 billion Basics backlog (Basics book‑to‑bill of 2.4 in 2025), strong bookings and production ramps in Tulsa and Memphis, and continued Basics momentum after 2025 (Basics sales and bookings grew strongly), while noting 2025 year‑end metrics of $398.3 million debt (leverage 1.77) and $1.2 million cash; interest expense will be higher early in the year with modest debt reduction expected in the back half. They also highlighted improving incremental margins (combined Tulsa+Memphis incremental margin was ~25% in Q4) as utilization and throughput increase.Aaon Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
86
Very Positive
Cash Flow
24
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.44B | 1.20B | 1.17B | 888.79M | 534.52M |
| Gross Profit | 385.72M | 397.11M | 399.02M | 237.57M | 137.83M |
| EBITDA | 225.84M | 272.42M | 274.79M | 162.59M | 99.73M |
| Net Income | 107.59M | 168.56M | 177.62M | 100.38M | 58.76M |
Balance Sheet | |||||
| Total Assets | 1.69B | 1.18B | 941.44M | 813.90M | 650.18M |
| Cash, Cash Equivalents and Short-Term Investments | 13.00K | 14.00K | 287.00K | 5.45M | 2.86M |
| Total Debt | 433.38M | 170.96M | 50.55M | 78.25M | 41.58M |
| Total Liabilities | 791.52M | 350.65M | 206.21M | 253.19M | 184.01M |
| Stockholders Equity | 894.99M | 824.58M | 735.22M | 560.71M | 466.17M |
Cash Flow | |||||
| Free Cash Flow | -191.42M | -3.13M | 54.60M | 7.29M | 5.82M |
| Operating Cash Flow | -861.00K | 192.53M | 158.90M | 61.32M | 61.18M |
| Investing Cash Flow | -192.42M | -213.07M | -109.31M | -76.21M | -158.72M |
| Financing Cash Flow | 188.00M | 18.03M | -46.51M | 17.36M | 18.73M |
Aaon Technical Analysis
Positive
93.98
Price Trends
91.21
Positive
88.29
Positive
88.25
Positive
Market Momentum
1.39
Negative
60.26
Neutral
76.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAON, the sentiment is Positive. The current price of 93.98 is above the 20-day moving average (MA) of 86.09, above the 50-day MA of 91.21, and above the 200-day MA of 88.25, indicating a bullish trend. The MACD of 1.39 indicates Negative momentum. The RSI at 60.26 is Neutral, neither overbought nor oversold. The STOCH value of 76.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $109.01B | 39.77 | 36.17% | 0.95% | 6.36% | 7.42% | |
71 Outperform | $18.61B | 34.45 | 72.05% | 0.96% | -2.03% | -1.09% | |
70 Outperform | $89.38B | 36.04 | 23.52% | 1.27% | -6.39% | 102.82% | |
69 Neutral | $56.12B | 49.39 | 10.50% | 1.65% | -5.07% | -65.16% | |
66 Neutral | $14.38B | 26.65 | 38.36% | 1.28% | -0.53% | -1.29% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $7.64B | 57.78 | 12.63% | 0.53% | 20.11% | -36.22% |
* Industrials Sector Average
AAON
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Aaon Corporate Events
Business Operations and StrategyExecutive/Board Changes
AAON Announces CFO Transition and Broader Leadership Changes
Positive
Apr 2, 2026
AAON, Inc., a leader in high-performance, energy-efficient HVAC systems for commercial and industrial markets, designs and manufactures solutions aimed at delivering superior efficiency, performance, and long-term value. Headquartered in Tulsa, Ok...
Dividends
AAON Declares Regular Quarterly Cash Dividend for Shareholders
Positive
Mar 5, 2026
On March 5, 2026, AAON, Inc. announced that its board of directors declared the company’s next regular quarterly cash dividend of $0.10 per share, equivalent to $0.40 on an annualized basis. The dividend is scheduled to be paid on March 30, ...
Business Operations and StrategyStock BuybackFinancial Disclosures
AAON Reports Record 2025 Results and Share Repurchase Plan
Positive
Mar 2, 2026
On March 2, 2026, AAON reported record full-year 2025 results, with net sales up 20.1% to $1.44 billion but lower gross margins and EPS as the company absorbed costs tied to major capacity expansions and an ERP implementation. The company ended 20...
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.