The yearly results for AAON, Inc. (NASDAQ:AAON) were released last week, making it a good time to revisit its performance. AAON reported in line with analyst predictions, delivering revenues of US$469m and statutory earnings per share of US$1.03, suggesting the business is executing well and in line with its plan. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We’ve gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for AAON from dual analysts is for revenues of US$518.0m in 2020, which is a notable 10% increase on its sales over the past 12 months. Statutory earnings per share are expected to bounce 45% to US$1.50. Before this earnings report, analysts had been forecasting revenues of US$523.2m and earnings per share (EPS) of US$1.32 in 2020. Although the revenue estimates have not really changed, we can see there’s been a solid gain to earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
There’s been no major changes to the consensus price target of US$44.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock’s valuation.
Further, we can compare these estimates to past performance, and see how AAON forecasts compare to the wider market’s forecast performance. It’s clear from the latest estimates that AAON’s rate of growth is expected to accelerate meaningfully, with forecast 10% revenue growth noticeably faster than its historical growth of 6.1%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect AAON to grow faster than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards AAON following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$44.50, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have analyst estimates for AAON going out as far as 2021, and you can see them free on our platform here.
We also provide an overview of the AAON Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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