What a brutal six months it’s been for AAON. The stock has dropped 25.6% and now trades at $80.24, rattling many shareholders. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.
Following the pullback, is now an opportune time to buy AAON? Find out in our full research report, it’s free.
Why Are We Positive On AAON?
Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, AAON grew its sales at an incredible 20.7% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
AAON’s EPS grew at an astounding 23.5% compounded annual growth rate over the last five years, higher than its 20.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROIC Showcases Lucrative Growth Opportunities
Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).
AAON’s five-year average ROIC was 21.8%, placing it among the best industrials companies. This illustrates its management team’s ability to invest in highly profitable ventures and produce tangible results for shareholders.
Final Judgment
These are just a few reasons why we think AAON is a great business. With the recent decline, the stock trades at 27.3× forward price-to-earnings (or $80.24 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than AAON
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.