Is AAON (AAON) Undervalued After Its Sharp Share Price Pullback?

AAON stock moves after recent share price pullback

AAON (AAON) has come under pressure recently, with the stock down 9.5% over the past day and 20.8% over the past week, extending a month decline of 32.5%.

See our latest analysis for AAON.

At the current share price of $84.87, AAON’s recent pullback has reversed some earlier gains, with short term share price momentum fading even though the year to date share price return remains positive and longer term total shareholder returns are still higher.

If the recent swings in AAON have you thinking about where else capital could move next, it may be worth checking out 34 power grid technology and infrastructure stocks as a starting point for other infrastructure linked opportunities.

AAON looks like a solid HVAC business on the surface, with positive multi year shareholder returns and meaningful revenue and earnings growth. After a sharp pullback, the real question is how the current price compares with those fundamentals.

Most Popular Narrative: 43.9% Undervalued

AAON’s most followed narrative pegs fair value at $151.33, which is well above the last close at $84.87, and hinges on how its growth projects translate into earnings power over time.

The company is overcoming short-term operational disruptions related to its ERP rollout, with visible progress in production efficiency and a strong, favorably priced backlog, supporting expectations for accelerating top-line growth and margin recovery in the second half of 2025 and into 2026. (Impacts revenue and gross margins)

Read the complete narrative. Read the complete narrative.

Want to see what sits behind that valuation gap for AAON? The narrative focuses on rapid earnings expansion, stronger margins and a higher future earnings multiple. Curious which specific growth and profitability assumptions have to align for that $151.33 fair value to hold?

Result: Fair Value of $151.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, AAON still carries real execution risk if ERP disruptions linger or if heavy BasX and Memphis spending keeps cash flow tight and margins under pressure.

Find out about the key risks to this AAON narrative.

Another View on AAON’s valuation

That 43.9% “undervalued” narrative for AAON leans heavily on future growth and margin gains. On today’s numbers, the stock trades on a P/E of 58.9x, versus 23x for peers and a fair ratio of 62.3x, which leaves less room for error if expectations soften.

Before leaning on any one metric, it can help to see how the current P/E, peer group and fair ratio all line up in one place, then decide what kind of valuation risk you are comfortable with. See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this AAON narrative feels mixed to you, that is the point. There are both concerns and reasons for optimism. Take a moment to review the 3 key rewards and 5 important warning signs

Looking for more AAON investment ideas beyond this narrative?

If you are reassessing AAON after this pullback, it can help to line it up against a wider set of ideas so you are not relying on a single story.

Use the Simply Wall Street Screener to quickly surface targeted shortlists that match different goals and comfort levels.

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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.

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