Applied Industrial Technologies (AIT) AI Stock Analysis

• Market Cap: $9.75B
• Dividend Yield: 0.71%
• Average Volume (3M): 254.65K
• Price to Earnings (P/E): 24.9
• Beta (1Y): 1.17
• Revenue Growth: 4.03%
• EPS Growth: 5.93%
• Country: US
• Employees: 6,818
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 2.63
• Shares Outstanding: 37,717,910
• 10 Day Avg. Volume: 283,042
• 30 Day Avg. Volume: 254,647
• PEG Ratio: 8.07
• Price to Book (P/B): 4.83
• Price to Sales (P/S): 1.95
• P/FCF Ratio: 19.13
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.18
• Enterprise Value/Gross Profit: 7.15
• Enterprise Value/Ebitda: 16.93
• 1Y Price Target: $297.50
• Price Target Upside: 15.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $286.00 ▲(10.65% Upside)

Applied Industrial Technologies has a solid financial foundation with strong earnings growth and positive outlook from the latest earnings call. However, technical indicators suggest neutral momentum, and the valuation appears moderate with a low dividend yield. The company's robust financial performance and positive earnings call are the most significant factors driving the score.

Positive Factors

Earnings Growth

Strong earnings growth reflects effective cost management and operational efficiency, supporting long-term profitability and shareholder value.

Balance Sheet Strength

A strong balance sheet with low leverage enhances financial stability and flexibility, enabling strategic investments and growth opportunities.

Positive Order Momentum

Positive order momentum indicates strong demand and future revenue potential, supporting sustained growth in key business segments.

Negative Factors

Mixed End Market Demand

Uncertain demand in key markets can impact revenue stability and growth, posing challenges to maintaining consistent performance.

Engineered Solutions Segment Challenges

Declining sales in a key segment may indicate competitive pressures or market saturation, affecting overall growth prospects.

Inflationary Pressures

Inflationary pressures can erode profit margins and increase operational costs, challenging the company's ability to maintain profitability.

Applied Industrial Technologies Business Overview & Revenue Model

Company Description

Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. It operates through two segments, Service Center Based Distribution, and Fluid Power & Flow Control. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides equipment repair and technical support services. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as government entities. The company was formerly known as Bearings, Inc. and changed its to name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.

How the Company Makes Money

Applied Industrial Technologies generates revenue primarily through the sale of industrial products and components to various sectors, including manufacturing and construction. The company's revenue model is based on the distribution of these products, along with value-added services that provide customers with tailored solutions to their operational needs. Key revenue streams include direct sales of industrial parts, MRO supplies, and specialized services such as inventory management and technical support. AIT also benefits from long-term relationships with major manufacturers, allowing them to offer a comprehensive range of products while leveraging bulk purchasing to optimize margins. Additionally, strategic partnerships with suppliers and manufacturers help sustain competitive pricing and broaden their product offerings, contributing significantly to their overall earnings.

Applied Industrial Technologies Financial Statement Overview

Summary

Applied Industrial Technologies exhibits a strong financial profile with consistent revenue growth and solid profitability. The balance sheet is robust, with low leverage and high return on equity, while cash flow generation remains stable. However, there is room for improvement in cash flow growth.

Income Statement

Applied Industrial Technologies demonstrates strong financial performance with consistent revenue growth, highlighted by a 2.2% increase in TTM. The company maintains healthy profit margins, with a gross profit margin of 30.4% and a net profit margin of 8.6% in TTM. EBIT and EBITDA margins are stable, reflecting efficient operations. Overall, the income statement indicates robust profitability and growth.

Balance Sheet

The balance sheet shows a solid financial position with a low debt-to-equity ratio of 0.18 in TTM, indicating prudent leverage management. Return on equity is strong at 18.6%, showcasing effective use of shareholder funds. The equity ratio is 100%, suggesting a well-capitalized structure. However, the decrease in total debt over time reflects a cautious approach to debt management.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth at -2.2% in TTM, which could be a concern. However, the operating cash flow to net income ratio is healthy at 0.97, indicating good cash generation relative to earnings. The free cash flow to net income ratio is strong at 0.94, reflecting efficient cash conversion. Overall, cash flow management is stable but shows room for improvement in growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.66B	4.56B	4.48B	4.41B	3.81B	3.24B
Gross Profit	1.42B	1.38B	1.34B	1.29B	1.11B	935.52M
EBITDA	599.34M	579.66M	571.03M	527.67M	410.13M	263.01M
Net Income	401.73M	392.99M	385.76M	346.74M	257.41M	144.76M
Balance Sheet
Total Assets	3.19B	3.18B	2.95B	2.74B	2.45B	2.27B
Cash, Cash Equivalents and Short-Term Investments	418.72M	388.42M	460.62M	344.04M	184.47M	257.75M
Total Debt	572.30M	770.62M	734.94M	622.10M	800.25M	919.99M
Total Liabilities	1.30B	1.33B	1.26B	1.28B	1.30B	1.34B
Stockholders Equity	1.88B	1.84B	1.69B	1.46B	1.15B	932.55M
Cash Flow
Free Cash Flow	455.02M	465.20M	346.53M	317.49M	169.45M	225.84M
Operating Cash Flow	483.95M	492.38M	371.39M	343.97M	187.57M	241.70M
Investing Cash Flow	-313.08M	-318.75M	-95.41M	-60.83M	-35.66M	-44.93M
Financing Cash Flow	-290.13M	-245.61M	-156.47M	-126.89M	-223.03M	-213.04M

Applied Industrial Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 258.47
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIT, the sentiment is Positive. The current price of 258.47 is above the 20-day moving average (MA) of 255.60, above the 50-day MA of 254.20, and above the 200-day MA of 245.36, indicating a bullish trend. The MACD of 1.96 indicates Negative momentum. The RSI at 52.72 is Neutral, neither overbought nor oversold. The STOCH value of 43.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIT.

Applied Industrial Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIC	77 Outperform	$1.16B	17.12	22.61%	3.46%	0.16%	2.99%
WCC	75 Outperform	$12.57B	20.27	13.06%	0.70%	5.28%	1.97%
AIT	74 Outperform	$9.75B	24.86	22.10%	0.71%	4.03%	5.93%
GWW	73 Outperform	$48.60B	28.53	48.98%	0.86%	4.83%	-3.60%
FAST	72 Outperform	$48.61B	39.70	32.74%	2.07%	6.92%	5.98%
MSM	69 Neutral	$4.78B	24.05	14.34%	3.99%	-1.35%	-22.24%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Applied Industrial Technologies Corporate Events

Applied Industrial Technologies Secures $900M Credit Facility

On October 24, 2025, Applied Industrial Technologies, Inc. entered into a new $900 million senior unsecured revolving credit facility with KeyBank National Association and other financial institutions. This agreement, which replaces a prior credit agreement from December 2021, will be used to refinance existing debt and support ongoing corporate needs, including potential acquisitions. The credit facility includes options for increased borrowing and contains customary covenants and interest rate terms based on the company’s financial ratios, impacting its financial flexibility and operational strategy.

Applied Industrial Technologies Holds Annual Shareholders Meeting

On October 21, 2025, Applied Industrial Technologies held its annual shareholders meeting where key decisions were made. Shareholders elected three directors for a three-year term, approved a nonbinding advisory vote on executive compensation, and ratified Deloitte & Touche LLP as the independent auditors for the fiscal year ending June 30, 2026. These decisions are crucial for the company’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.