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Applied Industrial Technologies (AIT)
NYSE:AIT
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Applied Industrial Technologies (AIT) AI Stock Analysis

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AIT

Applied Industrial Technologies

(NYSE:AIT)

Rating:73Outperform
Price Target:
$285.00
▲(6.32%Upside)
AIT's strong financial performance and strategic initiatives are significant strengths. Despite high valuation and macroeconomic challenges, the company’s solid order trends and robust cash generation indicate resilience and potential for long-term growth in the industrial distribution sector.
Positive Factors
Acquisitions
The acquisition of Hydradyne is expected to contribute significantly to AIT's growth story, with projected sales and EBITDA expected to be accretive to earnings per share.
Earnings Performance
Analyst expects AIT earnings to beat expectations or at least be in line, with shares likely to react positively.
Financial Health
Ample capacity remains for additional mergers and acquisitions, as well as other capital deployment opportunities, indicating strong financial health.
Negative Factors
Market Performance
Organic sales were still negative with a weaker December and the first two weeks of January.
Sales Growth
Organic daily sales showed a decline, indicating challenges in maintaining sales growth in certain sectors.

Applied Industrial Technologies (AIT) vs. SPDR S&P 500 ETF (SPY)

Applied Industrial Technologies Business Overview & Revenue Model

Company DescriptionApplied 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 MoneyApplied Industrial Technologies generates revenue primarily through the distribution and sale of industrial products and components, as well as by providing value-added services such as engineering, design, assembly, and maintenance. The company's key revenue streams include product sales, service contracts, and customized solutions tailored to specific customer needs. AIT benefits from strategic partnerships with leading manufacturers and suppliers, allowing it to offer a comprehensive portfolio of high-quality products. Additionally, the company's extensive distribution network and focus on customer service enhance its ability to cross-sell and upsell products and services, contributing to its overall earnings.

Applied Industrial Technologies Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q3-2025)
|
% Change Since: 10.41%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlights strong margin expansion, record cash generation, and successful M&A activity. However, it acknowledges challenges in organic sales decline, market conditions, and macroeconomic uncertainty. Positive order trends and share repurchase plans provide optimism for future growth.
Q3-2025 Updates
Positive Updates
Strong Margin Expansion
Gross margins and EBITDA margins exceeded expectations, increasing 95 and 59 basis points respectively over the prior year.
Record Cash Generation
Free cash flow increased by 50% year-over-year in the third quarter, with a 39% increase year-to-date.
Successful M&A Activity
Significant capital deployment of $440 million, including the acquisition of Hydradyne and the announced acquisition of IRIS Factory Automation.
Positive Order Trends
Engineered Solutions segment saw a 3% year-over-year and 8% sequential increase in orders, with automation orders up over 30% year-over-year.
Share Repurchase Program
Repurchased over 330,000 shares for approximately $80 million year-to-date and announced a new $1.5 million share repurchase authorization.
Negative Updates
Organic Sales Decline
Third-quarter organic sales declined by 3%, with continued softness in the OEM fluid power markets.
Challenging Market Conditions
Ongoing muted end market backdrop with customers conservatively managing MRO and capital spending.
Macroeconomic Uncertainty
Economic uncertainty due to evolving global trade policies and potential tariffs affecting customer spending.
Sector-Specific Weakness
Continued sales declines in machinery, metals, and utilities markets.
Company Guidance
During the Fiscal 2025 Third Quarter Earnings Call for Applied Industrial Technologies, the company provided guidance indicating a cautious outlook amid ongoing economic uncertainty. The company adjusted its full-year fiscal 2025 guidance, projecting EPS in the range of $9.85 to $10 and sales growth between flat to 1%. This includes an anticipated organic sales decline of 4% to 3% and EBITDA margins of 12.3% to 12.4%. In the third quarter, gross margins exceeded expectations, increasing by 95 basis points year-over-year, while EBITDA margins rose by 59 basis points. The company achieved free cash flow growth of 50% year-over-year in the third quarter and 39% year-to-date, supported by solid working capital management and cost control initiatives. The guidance reflects potential impacts from global trade uncertainties and customer caution in capital spending, with expectations of a mid to low single-digit decline in organic daily sales for the fourth quarter. Despite these challenges, Applied Industrial Technologies remains focused on leveraging its strategic initiatives and strong market position for long-term growth.

Applied Industrial Technologies Financial Statement Overview

Summary
AIT has demonstrated strong financial performance with consistent revenue growth from $3.23 billion in 2021 to $4.50 billion TTM. The Gross Profit Margin stands at 30.04% TTM, and the Net Profit Margin is 8.64% TTM, indicating efficient cost management and profitability. A robust ROE of 12.47% TTM and low leverage with a Debt-to-Equity ratio of 0.18 TTM further underscore financial stability.
Income Statement
85
Very Positive
AIT has demonstrated strong financial performance with consistent revenue growth over the years. The Gross Profit Margin stands at 30.04% TTM, showing efficiency in managing production costs. The Net Profit Margin is 8.64% TTM, reflecting effective cost management and profitability. Revenue has grown from $3.23 billion in 2021 to $4.50 billion TTM, indicating robust growth. The EBIT Margin is 11.29% TTM, and the EBITDA Margin is 12.07% TTM, showcasing strong operational efficiency.
Balance Sheet
78
Positive
The company has a solid balance sheet with a Debt-to-Equity ratio of 0.18 TTM, indicating low leverage and financial stability. Return on Equity (ROE) is robust at 12.47% TTM, showcasing strong returns for shareholders. The Equity Ratio is 100%, highlighting a strong equity base and low reliance on debt.
Cash Flow
82
Very Positive
AIT's cash flow is strong, with a Free Cash Flow growth rate of 26.64% from 2024 to TTM, indicating improved cash generation. The Operating Cash Flow to Net Income Ratio is 1.20 TTM, which is a healthy indicator of cash generation relative to net earnings. The Free Cash Flow to Net Income Ratio is 1.13 TTM, demonstrating effective conversion of profits into cash.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue4.48B4.41B3.81B3.24B3.25B
Gross Profit1.34B1.29B1.11B935.52M937.74M
EBITDA552.35M520.39M410.80M309.84M282.86M
Net Income385.76M346.74M257.41M144.76M24.04M
Balance Sheet
Total Assets2.95B2.74B2.45B2.27B2.28B
Cash, Cash Equivalents and Short-Term Investments460.62M344.04M184.47M257.75M268.55M
Total Debt734.94M622.10M689.32M828.38M933.79M
Total Liabilities1.26B1.28B1.30B1.34B1.44B
Stockholders Equity1.69B1.46B1.15B932.55M843.54M
Cash Flow
Free Cash Flow346.53M317.49M169.45M225.84M276.60M
Operating Cash Flow371.39M343.97M187.57M241.70M296.71M
Investing Cash Flow-95.41M-60.83M-35.66M-44.93M-55.40M
Financing Cash Flow-156.47M-126.89M-223.03M-213.04M-78.24M

Applied Industrial Technologies Technical Analysis

Technical Analysis Sentiment
Positive
Last Price268.07
Price Trends
50DMA
238.04
Positive
100DMA
232.23
Positive
200DMA
241.96
Positive
Market Momentum
MACD
8.67
Negative
RSI
73.88
Negative
STOCH
89.86
Negative
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 268.07 is above the 20-day moving average (MA) of 251.61, above the 50-day MA of 238.04, and above the 200-day MA of 241.96, indicating a bullish trend. The MACD of 8.67 indicates Negative momentum. The RSI at 73.88 is Negative, neither overbought nor oversold. The STOCH value of 89.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIT.

Applied Industrial Technologies Risk Analysis

Applied Industrial Technologies disclosed 19 risk factors in its most recent earnings report. Applied Industrial Technologies reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Applied Industrial Technologies Peers Comparison

Overall Rating
UnderperformOutperform
Sector (71)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$1.66B22.0019.45%11.94%34.08%
74
Outperform
$4.85B24.7114.34%3.91%-4.11%-31.26%
73
Outperform
$10.33B16.0814.38%0.82%-1.80%9.55%
73
Outperform
$10.21B26.7822.23%0.62%0.50%4.48%
71
Outperform
¥269.20B13.848.47%2.89%6.33%13.01%
65
Neutral
$1.38B1,840.370.18%13.91%
52
Neutral
$457.31M11.08-9.38%-5.32%-163.42%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AIT
Applied Industrial Technologies
272.13
58.62
27.46%
DXPE
DXP Enterprises
108.17
54.95
103.25%
DSGR
Distribution Solutions Group
29.76
-4.69
-13.61%
MSM
MSC Industrial
87.36
3.30
3.93%
TITN
Titan Machinery
19.81
1.92
10.73%
WCC
Wesco International
214.43
45.67
27.06%

Applied Industrial Technologies Corporate Events

Private Placements and Financing
Applied Industrial Extends Securitization Facility to 2028
Neutral
Jul 11, 2025

On July 10, 2025, Applied Industrial Technologies, Inc. amended its accounts receivable securitization facility, extending its maturity to July 10, 2028, from the previous expiration date of August 4, 2026. This amendment involved changes to the Receivables Financing Agreement and the Purchase and Sale Agreement, with AIT Receivables LLC acting as the borrower and PNC Bank as the administrative agent. The transaction included customary fees paid by AIT Receivables to the lenders.

The most recent analyst rating on (AIT) stock is a Buy with a $305.00 price target. To see the full list of analyst forecasts on Applied Industrial Technologies stock, see the AIT Stock Forecast page.

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.Date of analysis: Jul 11, 2025