AAON

AAON Inc.

Industrial/Transportation


Presented:05/19/2023
Price:$60.95
Cap:$4.96B
Current Price:$110.99
Cap:$8.99B

Presented

Date05/19/2023
Price$60.95
Market Cap$4.96B
Ent Value$5.43B
P/E Ratio41.89x
Book Value$7.00
Div Yield0.6%
Shares O/S81.38M
Ave Daily Vol541,592
Short Int2.78%

Current

Price$110.99
Market Cap$8.99B
AAON, Inc. engages in the engineering, manufacturing, marketing and sale of air conditioning and heating equipment. It operates through the following segments: Units, Parts-External, Parts-Internal, and Other. Its products include air handling units, self contained units, packaged rooftop units, geothermal heat units, controls, and coils. The company was founded by Norman H. Asbjornson on August 18, 1987 and is headquartered in Tulsa, OK.

Please note, this stock split on 08/17/2023 at a ratio of 3/2. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $91.42.

Publicly traded companies mentioned herein: AAON Inc (AAON)

Highlights

The presenter is short shares of AAON Inc (AAON), a manufacturer of HVAC equipment primarily for commercial buildings. AAON has been growing rapidly over the last two years (~75% two-year revenue growth) and taking significant market share, but the presenter argues this was mainly due to strong capacity when competitors faced supply chain issues and offers less in the way of defensible competitive advantages. At the same time, AAON was able to take price since it was selling new, higher efficiency units that have now been regulated into the industry and are starting to be sold by competitors. The Street is underwriting continued strong growth (24% in 2023, 14% in 2024, 10% thereafter), whereas he feels the business is over earning and highlights the industry’s ~5% normalized growth rate. Modeling ~3% topline growth in 2024 and 2025 and margin normalization to 19%, he estimates $225MM of EBITDA in 2025. In that scenario, he would expect the EBITDA multiple to contract from ~20x to a historically normal ~13x valuation, creating 40% downside from the current $92 per share to $55.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.