AAON, Inc. Just Beat EPS By 19%: Here's What Analysts Think Will Happen Next

AAON, Inc. (NASDAQ:AAON) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 14% higher than the analysts had forecast, at US$384m, while EPS of US$0.37 beat analyst models by 19%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the five analysts covering AAON are now predicting revenues of US$1.56b in 2026. If met, this would reflect a solid 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 60% to US$1.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.52b and earnings per share (EPS) of US$2.00 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.

View our latest analysis for AAON

The analysts increased their price target 12% to US$115, perhaps signalling that higher revenues are a strong leading indicator for AAON's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on AAON, with the most bullish analyst valuing it at US$125 and the most bearish at US$100.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that AAON's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2026 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.2% annually. So it's pretty clear that, while AAON's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on AAON. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for AAON going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for AAON you should be aware of, and 2 of them make us uncomfortable.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.