Applied Industrial Technologies (NYSE:AIT) - Share price, News & Analysis

Q: What is the Fair Price of AIT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

AIT ($103.45) is trading above our estimate of [[fair value]] ($50.97)

AIT fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	1/6
Past Performance	6/6
Financial Health	4/6
Dividends	4/6

AIT Stock Overview

Applied Industrial Technologies, Inc. distributes industrial products in North America, Australia, New Zealand, and Singapore.

Rewards

Earnings are forecast to grow 9.25% per year

Earnings grew by 105.7% over the past year

Risk Analysis

Has a high level of debt

Significant insider selling over the past 3 months

Applied Industrial Technologies Competitors

GATX

NYSE:GATX

US$3.6b

MSC Industrial Direct

NYSE:MSM

US$4.6b

Beacon Roofing Supply

NasdaqGS:BECN

US$3.9b

Herc Holdings

NYSE:HRI

US$3.7b

Price History & Performance

Summary of all time highs, changes and price drops for Applied Industrial Technologies
Historical stock prices
Current Share Price	US$103.45
52 Week High	US$111.68
52 Week Low	US$80.93
Beta	1.22
1 Month Change	9.82%
3 Month Change	-1.80%
1 Year Change	18.38%
3 Year Change	86.94%
5 Year Change	86.56%
Change since IPO	1,753.86%

Recent News & Updates

Jul 23

Here's Why Applied Industrial Technologies (NYSE:AIT) Has Caught The Eye Of Investors

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

	AIT	US Trade Distributors	US Market
7D	2.8%	0.7%	1.0%
1Y	18.4%	1.9%	-12.9%

Return vs Industry: AIT exceeded the US Trade Distributors industry which returned 1.9% over the past year.

Return vs Market: AIT exceeded the US Market which returned -12.8% over the past year.

Price Volatility

Is AIT's price volatile compared to industry and market?
AIT volatility
AIT Average Weekly Movement	4.4%
Trade Distributors Industry Average Movement	6.8%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: AIT is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: AIT's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1923	6,008	Neil Schrimsher	https://www.applied.com

Applied Industrial Technologies, Inc. distributes industrial products 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, 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, as well as other related supplies for general operational needs of customers’ machinery and equipment.

Applied Industrial Technologies Fundamentals Summary

How do Applied Industrial Technologies's earnings and revenue compare to its market cap?
AIT fundamental statistics
Market Cap	US$3.98b
Earnings (TTM)	US$237.55m
Revenue (TTM)	US$3.65b

16.7x

P/E Ratio

1.1x

P/S Ratio

Is AIT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AIT income statement (TTM)
Revenue	US$3.65b
Cost of Revenue	US$2.58b
Gross Profit	US$1.06b
Other Expenses	US$825.73m
Earnings	US$237.55m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	6.18
Gross Margin	29.17%
Net Profit Margin	6.52%
Debt/Equity Ratio	65.7%

How did AIT perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

22%

Payout Ratio

Does AIT pay a reliable dividends?

See AIT dividend history and benchmarks

When do you need to buy AIT by to receive an upcoming dividend?
Applied Industrial Technologies dividend dates
Ex Dividend Date	Aug 12 2022
Dividend Pay Date	Aug 31 2022
Days until Ex dividend	4 days
Days until Dividend pay date	23 days

Does AIT pay a reliable dividends?

See AIT dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is AIT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AIT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AIT. This is calculated by dividing AIT's market cap by their current preferred multiple.
What is AIT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.98b

AIT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.2x
Enterprise Value/EBITDA	11.7x
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does AIT's PE Ratio compare to its peers?

AIT PE Ratio vs Peers

The above table shows the PE ratio for AIT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.7x
GATX GATX	19.8x	21.8%	US$3.6b
MSM MSC Industrial Direct	15.2x	7.8%	US$4.6b
BECN Beacon Roofing Supply	10.2x	7.2%	US$3.9b
HRI Herc Holdings	13.4x	17.1%	US$3.7b
AIT Applied Industrial Technologies	16.7x	9.3%	US$4.0b

Price-To-Earnings vs Peers: AIT is expensive based on its Price-To-Earnings Ratio (16.7x) compared to the peer average (14.7x).

Price to Earnings Ratio vs Industry

How does AIT's PE Ratio compare vs other companies in the US Trade Distributors Industry?

Price-To-Earnings vs Industry: AIT is expensive based on its Price-To-Earnings Ratio (16.7x) compared to the US Trade Distributors industry average (13.2x)

Price to Earnings Ratio vs Fair Ratio

What is AIT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AIT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	16.7x
Fair PE Ratio	17.9x

Price-To-Earnings vs Fair Ratio: AIT is good value based on its Price-To-Earnings Ratio (16.7x) compared to the estimated Fair Price-To-Earnings Ratio (17.9x).

Share Price vs Fair Value

What is the Fair Price of AIT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AIT ($103.45) is trading above our estimate of fair value ($50.97)

Significantly Below Fair Value: AIT is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Applied Industrial Technologies forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AIT's forecast earnings growth (9.3% per year) is above the savings rate (1.9%).

Earnings vs Market: AIT's earnings (9.3% per year) are forecast to grow slower than the US market (12.8% per year).

High Growth Earnings: AIT's earnings are forecast to grow, but not significantly.

Revenue vs Market: AIT's revenue (2.6% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: AIT's revenue (2.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if AIT's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Applied Industrial Technologies performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AIT has high quality earnings.

Growing Profit Margin: AIT's current net profit margins (6.5%) are higher than last year (3.8%).

Past Earnings Growth Analysis

Earnings Trend: AIT's earnings have grown by 0.1% per year over the past 5 years.

Accelerating Growth: AIT's earnings growth over the past year (105.7%) exceeds its 5-year average (0.1% per year).

Earnings vs Industry: AIT earnings growth over the past year (105.7%) exceeded the Trade Distributors industry 70.5%.

Return on Equity

High ROE: AIT's Return on Equity (21.6%) is considered high.

Discover strong past performing companies

Financial Health

How is Applied Industrial Technologies's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AIT's short term assets ($1.3B) exceed its short term liabilities ($464.4M).

Long Term Liabilities: AIT's short term assets ($1.3B) exceed its long term liabilities ($820.8M).

Debt to Equity History and Analysis

Debt Level: AIT's net debt to equity ratio (48.6%) is considered high.

Reducing Debt: AIT's debt to equity ratio has increased from 45.5% to 65.7% over the past 5 years.

Debt Coverage: AIT's debt is well covered by operating cash flow (23.9%).

Interest Coverage: AIT's interest payments on its debt are well covered by EBIT (11.8x coverage).

Balance Sheet

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Dividend

What is Applied Industrial Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.31%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: AIT's dividend (1.31%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: AIT's dividend (1.31%) is low compared to the top 25% of dividend payers in the US market (4.09%).

Stability and Growth of Payments

Stable Dividend: AIT's dividends per share have been stable in the past 10 years.

Growing Dividend: AIT's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (21.6%), AIT's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (33.4%), AIT's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.3yrs

Average management tenure

CEO

Neil Schrimsher (58 yo)

10.83yrs

Tenure

US$6,084,592

Compensation

Mr. Neil A. Schrimsher serves as the Chief Executive Officer of Applied Industrial Technologies, Inc. since October 25, 2011 and also serves as President since August 2013. Mr. Schrimsher's managerial expe...

CEO Compensation Analysis

Compensation vs Market: Neil's total compensation ($USD6.08M) is about average for companies of similar size in the US market ($USD6.58M).

Compensation vs Earnings: Neil's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: AIT's management team is seasoned and experienced (7.3 years average tenure).

Board Members

Experienced Board: AIT's board of directors are considered experienced (7.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: AIT insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30