AAON, INC.

NDQ-AAON RECENT
PRICE 123.21 P/ERATIO 47.4(Trailing:
Median: 34.0) P/E RATIO 2.63 YLD 0.3%
NMF RELATIVE DIV’D VALUE
LINE
TIMELINESS 2 Raised 10/11/24 High:
Low:
14.7
6.2
15.4
11.2
16.9
12.6
22.6
12.7
25.5
20.0
29.9
19.4
35.5
22.3
46.3
27.0
55.9
39.5
55.3
31.7
75.2
46.9
144.1
68.4
Target Price Range
2027 2028 2029
SAFETY 3 New 4/18/14 LEGENDS
21.0 x ″Cash Flow″ p sh
TECHNICAL 3 Raised 12/13/24 . . . . Relative Price Strength
3-for-2 split 6/11
160
BETA .85 (1.00 = Market) 3-for-2 split 7/13 120
3-for-2 split 7/14
3-for-2 100
18-Month Target Price Range 3-for-2 split 8/23 80
Options: Yes
Low-High Midpoint (% to Mid) Shaded area indicates recession 60
50
$87-$217 $152 (25%) 40
2027-29 PROJECTIONS 30
Ann’l Total
Price Gain Return 20
High 150 (+20%) 6%
Low 100 (-20%) -4% 15
% TOT. RETURN 11/24
Institutional Decisions THIS VL ARITH.*
1Q2024 2Q2024 3Q2024 STOCK INDEX
Percent 15 1 yr. 129.0 32.1
to Buy 168 209 191 shares 10
to Sell 139 161 173 3 yr. 178.9 28.2
traded 5
Hld’s(000) 57087 58967 64105 5 yr. 345.8 88.1
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 © VALUE LINE PUB. LLC 27-29
3.21 2.81 2.93 3.20 3.66 3.89 4.40 4.51 4.86 5.15 5.56 6.01 6.57 6.78 11.09 14.34 15.20 19.25 Sales per sh 25.85
.44 .42 .38 .32 .49 .60 .70 .73 .84 .83 .77 .98 1.28 1.13 1.70 2.75 3.00 3.70 ‘‘Cash Flow’’ per sh 5.10
.32 .32 .26 .18 .33 .45 .53 .56 .67 .63 .54 .68 .94 .73 1.24 2.13 2.25 3.00 Earnings per sh A 4.35
.06 .07 .07 .07 .07 .09 .12 .15 .16 .17 .21 .21 .25 .25 .29 .32 .32 .35 Div’ds Decl’d per sh B .50
.11 .11 .21 .43 .17 .11 .20 .26 .34 .53 .48 .48 .87 .70 .67 1.28 1.55 1.45 Cap’l Spending per sh 1.45
1.11 1.35 1.40 1.47 1.67 1.99 2.15 2.25 2.61 3.02 3.17 3.71 4.48 5.92 7.00 9.02 9.90 11.75 Book Value per sh C 19.95
87.12 87.15 83.56 83.09 82.75 82.60 81.06 79.52 78.98 78.63 77.99 78.12 78.34 78.79 80.14 81.51 80.15 79.55 Common Shs Outst’g D 78.50
11.7 12.0 18.0 33.1 17.7 22.3 24.9 26.9 27.2 36.8 44.4 45.2 39.7 NMF 32.5 28.6 Bold figures are Avg Ann’l P/E Ratio 29.0
.70 .80 1.15 2.08 1.13 1.25 1.31 1.35 1.43 1.85 2.40 2.41 2.04 NMF 1.88 1.60 Value Line Relative P/E Ratio 1.60
estimates
1.7% 1.9% 1.5% 1.2% 1.2% .9% .9% 1.0% .9% .7% .9% .7% .7% .5% .7% .5% Avg Ann’l Div’d Yield .6%
CAPITAL STRUCTURE as of 9/30/24 356.3 358.6 384.0 405.2 433.9 469.3 514.6 534.5 888.8 1168.5 1220 1530 Sales ($mill) 2030
22.4% 23.2% 24.1% 22.0% 16.9% 19.2% 23.5% 18.6% 18.3% 23.4% 23.0% 23.5% Operating Margin 24.5%
Total Debt $55.7 mill.Nil Due in 5 Yrs $55.7 mill. 12.2 12.0 13.0 15.0 17.7 22.8 25.6 30.3 35.5 46.5 54.0 56.0 Depreciation ($mill) 60.0
LT Debt $55.7 mill. LT Interest $2.5 mill.
(7% of Cap’l) 44.2 45.7 53.4 50.1 42.6 53.7 74.9 58.8 100.4 177.6 185 240 Net Profit ($mill) 340
35.3% 35.9% 33.3% 32.7% 23.9% 19.9% 21.6% 15.1% 19.4% 20.4% 20.0% 20.0% Income Tax Rate 20.0%
12.4% 12.8% 13.9% 12.4% 9.8% 11.4% 14.6% 11.0% 11.3% 15.2% 15.2% 15.7% Net Profit Margin 16.7%
No Defined Benefit Pension Plan 88.4 80.8 102.0 103.6 92.8 131.6 161.3 131.3 203.5 282.3 295 330 Working Cap’l ($mill) 420
-- -- -- -- -- -- -- 40.0 71.0 38.3 Nil Nil Long-Term Debt ($mill) Nil
Common Stock 81,279,625 shs 174.1 178.9 205.9 237.2 247.5 290.1 350.9 466.2 560.7 735.2 795 935 Shr. Equity ($mill) 1565
as of 11/5/24 25.4% 25.6% 25.9% 21.1% 17.2% 18.5% 21.3% 11.6% 16.1% 23.3% 23.5% 23.5% Return on Total Cap’l 20.0%
MARKET CAP: $10.0 bill. (Large Cap) 25.4% 25.6% 25.9% 21.1% 17.2% 18.5% 21.3% 12.6% 17.9% 24.2% 23.5% 23.5% Return on Shr. Equity 20.0%
CURRENT POSITION 2022 2023 9/30/24 19.8% 18.9% 19.8% 15.4% 10.4% 12.8% 15.7% 8.3% 13.8% 20.6% 20.0% 20.5% Retained to Com Eq 17.5%
($MILL.) 22% 26% 24% 27% 39% 31% 26% 34% 23% 15% 14% 13% All Div’ds to Net Prof 13%
Cash Assets 5.5 .3 .1
Receivables 127.2 138.1 143.8 BUSINESS: AAON, Inc. manufactures and sells semi-custom heat- (OR). Largest customer (Texas AirSystems) accounted for 13.8%
Inventory (FIFO) 198.9 213.5 177.7 ing, ventilation, and air conditioning (HVAC) equipment for non- of ’23 sales. Acquired data-center cooling solutions provider BASX,
Other 17.5 57.1 106.2
residential markets, primarily in the U.S. (97% of 2023 sales). Prod- 12/21. At 2/20/24, had 3,856 employees. Company founder Norm
Current Assets 349.1 409.0 427.8
ucts include rooftop units, condensing units, air handlers, outdoor Asbjornson owns 17.4% of common stock; other offs./dirs., 1.1%
Accts Payable 45.5 27.5 27.2
Debt Due -- -- -- mechanical rooms, and water source heat pumps. Has manufactur- (3/24 proxy). CEO: Gary Fields. Inc.: NV. Addr.: 2425 South Yukon,
Other 100.1 99.2 112.6 ing facilities in Tulsa, Longview (TX), Parkville (MO), and Redmond Tulsa, OK 74107. Tel.: (918) 583-2266. Internet: www.aaon.com.
Current Liab. 145.6 126.7 139.8
AAON, Inc. is aggressively expanding The company’s more-conventional
ANNUAL RATES Past Past Est’d ’21-’23 in order to meet growing demand for HVAC business may remain a drag for
of change (per sh) 10 Yrs. 5 Yrs. to ’27-’29 data center cooling solutions. Indeed, the next several quarters. The key
Sales 11.5% 15.5% 14.0%
‘‘Cash Flow’’ 14.5% 18.0% 16.5% the Tulsa-based maker of semi-custom driver of that business—nonresidential
Earnings 15.5% 17.5% 19.5% commercial HVAC systems recently un- construction—has generally been in a
Dividends 14.0% 9.5% 9.5% veiled plans to acquire a new 787,000- slump for some time. Furthermore, a
Book Value 15.5% 20.0% 18.0%
square-foot facility in Memphis, Tennes- closely watched indicator of future build-
see, which management expects will large- ing activity (gross billings by architectural
Cal- QUARTERLY SALES ($ mill.) Full ly accommodate incremental production of firms) only recently turned positive.
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
data-center equipment. The planned We still think that the HVAC indus-
2021 115.7 143.9 138.6 136.3 534.5 Memphis expansion follows a 15% increase try’s transition to a more eco-friendly
2022 182.8 208.8 242.6 254.6 888.8
2023 265.9 283.9 312.0 306.7 1168.5 in capacity at the BASX segment’s facility refrigerant will benefit AAON. As we
2024 262.1 313.6 327.3 317 1220 in Redmond, Oregon. At the same time, understand it, the company was already
2025 330 390 410 400 1530 AAON is expanding Coil Products manu- producing R-454B compliant systems in
facturing in Longview, Texas by 50%. volume, likely giving it a leg up on the
Cal- EARNINGS PER SHARE A Full As of September 30th, the company’s
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
competition ahead of the December 31st
order backlog stood at $647.7 million, switchover. At the same time, expected R-
2021 .20 .25 .19 .07 .73 up a strong 32% from just over $490 454B-related cost increases should
2022 .22 .20 .34 .47 1.24
2023 .45 .55 .58 .56 2.13 million 12 months earlier. What’s more, ultimately result in a more-favorable pric-
2024 .46 .62 .63 .54 2.25 in late October, AAON announced that it ing differential between AAON’s premium
2025 .61 .82 .84 .73 3.00 landed an additional $174.5 million worth offerings and those of its peers.
QUARTERLY DIVIDENDS PAID B of business from a single customer. Ac- This timely issue’s recent runup in
Cal- Full
endar Mar.31 Jun.30 Sep.30 Dec.31 Year cording to leadership, the HVAC maker is price leaves what we think will be un-
providing a custom-designed thermal man- exciting returns out to 2027–2029. We
2020 - - -- .127 .127 .254
2021 - - -- .127 .127 .254 agement system based on liquid-cooling still like the story here, but recommend
2022 - - -- .127 .16 .287 technology across several of the so-far- that investors wait for a better entry
2023 .08 .08 .08 .08 .32 unnamed customer’s data centers. point.
2024 .08 .08 .08 .08 Delivery is slated for the first half of 2025. Nils C. Van Liew January 3, 2025
(A) Diluted earnings. Excludes nonrecurring late February. share in the fourth quarter of 2012. Company’s Financial Strength B+
gains: ’20, $0.08; ’17, $0.08. Quarterly earn- (B) Began paying dividends quarterly in early (C) Includes intangibles. In 2023: $149.9 mil- Stock’s Price Stability 30
ings may not sum to total due to change in 2023; previously paid them semi-annually. The lion, or $1.84 a share. Price Growth Persistence 85
shares outstanding. Next earnings report due company paid a special dividend of $0.04 per (D) In millions, adjusted for stock splits. Earnings Predictability 60
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