AAON, Inc. (NASDAQ:AAON) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. AAON delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$314m-11% above indicated-andUS$0.62-20% above forecasts- respectively The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from AAON's five analysts is for revenues of US$1.22b in 2024. This would reflect an okay 2.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 2.4% to US$2.25 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.21b and earnings per share (EPS) of US$2.21 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$96.50, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on AAON, with the most bullish analyst valuing it at US$102 and the most bearish at US$80.00 per share. This is a very narrow spread of estimates, implying either that AAON is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that AAON's revenue growth is expected to slow, with the forecast 4.9% annualised growth rate until the end of 2024 being well below the historical 23% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% annually. So it's pretty clear that, while AAON's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$96.50, with the latest estimates not enough to have an impact on their price targets.
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. We have forecasts for AAON going out to 2026, and you can see them free on our platform here.
You can also see whether AAON is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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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