- AAON: Shares Are Overheating (Downgrade)
May 11, 2026 · seekingalpha.com
AAON, Inc. is downgraded to a soft Sell due to extreme valuation despite strong operational performance and data center-driven growth. Q1 revenue surged 54.3% to $496.9M, with backlog doubling year-over-year to $2.13B, supporting management's 40–45% revenue growth guidance for 2026. All segments, especially BASX, delivered robust top-line growth, but rising raw material costs compressed gross margins from 26.8% to 25.1%.
- AAON, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
May 9, 2026
As you might know, AAON, Inc. (NASDAQ:AAON) just kicked off its latest first-quarter results with some very strong numbers. Statutory revenue of US$497m and earnings of US$0.48 both blasted past expectations, beating expectations by 30% and 73%, respectively, ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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Following the latest results, AAON's five analysts are now forecasting revenues of US$1.80b in 2026. This would be a meaningful 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 37% to US$1.98. In the lead-up to this report, the analysts had been modelling revenues of US$1.72b and earnings per share (EPS) of US$1.98 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.
Check out our latest analysis for AAON
The analysts increased their price target 11% to US$137, perhaps signalling that higher revenues are a strong leading indicator for AAON's valuation. 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$126 and the most bearish at US$120 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. It's pretty clear that there is an expectation that AAON's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.0% per year. Even after the forecast slowdown in growth, it seems obvious that AAON is also expected to grow faster than the wider industry.
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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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for AAON going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for AAON (2 make us uncomfortable) you should be aware of.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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- Why AAON Stock Is Skyrocketing Higher This Week
May 8, 2026
Shares of leading customizable HVAC (heating, ventilation, and air conditioning) equipment provider AAON (NASDAQ: AAON) are up 45% this week after the company delivered expectation-smashing first-quarter earnings earlier this week. Sales and earnings per share grew by 54% and 37% in Q1, far surpassing analysts' hopes. And that's just the start of the good news.
Alongside these headline figures, AAON:
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raised its 2026 revenue outlook to 40% to 45% growth delivered 42% growth from its core AAON-branded sales reported 72% sales growth from its booming BASX unit, which focuses on serving data centers saw its backlog grow 107% to $2.1 billion -- BASX backlog up 160% maintained a companywide book-to-bill ratio above 1 saw a book-to-bill ratio above 2 for its BASX unit projected for margins and capacity to improve in 2026 with new facilities incomingImage source: Getty Images.
Simply put, AAON is firing on all cylinders. Its 2021 acquisition of BASX for roughly $200 million now looks like an absolute masterstroke, as the young unit just grew sales by 105% to reach $135 million in Q1 revenue. As the hyperscalers pile money into data centers for AI compute at a hard-to-fathom rate, AAON's premium, customizable HVAC equipment and solutions are becoming an indispensable part of the AI revolution's build-out.
That said, as awesome as this news is for AAON right now, investors need to beware that the hyperscaler's blistering expansion plans will likely not last forever -- or, at a minimum, will lead to brutal cyclicality at some point. However, there haven't been any hints yet that the data center build-out is slowing, so I'm not going to say AAON's good times are soon to end. It's impossible to tell how long this cycle will (or won't) last.
Trading at 61 times forward earnings, AAON's valuation isn't outrageous if its outsize sales growth continues -- which isn't a stretch given its booming backlog and BASX unit's book-to-bill ratio of over 2. I'm fascinated by AAON and will be keeping a close eye on it, as it looks like a promising picks-and-shovels play to the AI revolution.
Should you buy stock in Aaon right now?
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Why AAON Stock Is Skyrocketing Higher This Week was originally published by The Motley Fool
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- Why AAON Stock Is Skyrocketing Higher This Week
May 8, 2026 · fool.com
AAON's first-quarter earnings were simply outstanding, and the company is becoming a key picks-and-shovels investment in the booming data center build-out.
- AAON Inc (AAON) Hits 52-Week High as Revenues Soar by Double-Digits
May 8, 2026
AAON Inc. (NASDAQ:AAON) is one of the 10 Stocks Outperforming Wall Street With Monster Returns.
AAON climbed to a new 52-week high on Thursday, as investors snapped up shares after posting a high double-digit revenue growth in the first quarter of 2026 and an upbeat outlook for the full-year period.
At intra-day trading, AAON Inc. (NASDAQ:AAON) climbed to its highest price of $148.88 before trimming gains to end the session just up by 31.49 percent at $129.25 apiece.
Photo by Alesia Kozik on Pexels
This followed its earnings call in the first three months of the year, where it delivered a 54.3 percent jump in net sales to $496.9 million from $322.1 million in the same period last year, driven by strong demand across AAON and BASX brands, helped by ramped-up production.
Net income, on the other hand, increased by 35.9 percent to $39.8 million from $29.29 million in the same comparable period.
Looking ahead, AAON Inc. (NASDAQ:AAON) is upbeat about its outlook for 2026, with revenues expected to jump by 40 to 45 percent and gross margins by 27 to 28 percent, supported by a 107.4 percent increase in backlogs to a record of $2.1 billion.
The company said that the strong demand was driven by continued strength from the data center market.
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- AAON, Inc. Q1 2026 Earnings Call Summary
May 7, 2026
AAON, Inc. Q1 2026 Earnings Call Summary - Moby
Strategic Execution and Market Dynamics
Record sales and 37% earnings growth were driven by the deliberate transition of organizational leadership and capacity investments from the build phase to the execution phase. Basics branded sales grew 72% year-over-year, significantly outperforming the data center thermal management market's 30% growth rate to capture meaningful market share. Management is intentionally prioritizing customer delivery and market share gains over near-term margin maximization by utilizing temporary outsourcing to meet surging demand. AAON branded equipment saw a 42% sales increase as improved production throughput began to reduce persistent lead times and address a record backlog. The transactional business showed an acceleration in demand during the quarter, signaling a recovery in traditional markets that had been soft throughout much of the previous year. Operational execution is being supported by a deeper leadership bench and more disciplined processes as capacity scales across the Longview, Memphis, and Redmond facilities. Strategic focus on the 'alpha-class' fully electric heat pump configurations resulted in a 56% increase in bookings for those specific AAON branded products.
2026 Outlook and Strategic Assumptions
Full-year sales growth guidance was raised to 40% to 45%, implying approximately $1 billion in revenue from the Basics branded data center business. Gross margins are expected to range between 27% and 28% for the year, reflecting temporary cost pressures from outsourcing and ramp-related inefficiencies. Management anticipates directional margin improvement throughout the year as internal capacity matures, fixed cost absorption improves, and reliance on outsourcing declines. The company expects to maintain its premium pricing strategy, with recent pricing actions already embedded in the current backlog to offset tariff and inflationary pressures. Capacity investments in Memphis and Longview are projected to support revenue potential exceeding $2 billion without requiring immediate massive follow-up capital expenditures.
Operational Adjustments and Risk Factors
Overhead expenses associated with the new Memphis facility impacted Oklahoma segment margins by $9.8 million during the quarter. Temporary use of outsourced components, particularly for coils, is being used as a short-term hedge to maintain throughput while internal production ramps up. Tariff-related and general inflationary pressures contributed to a 170 basis point year-over-year decline in consolidated gross margin. The company is managing a transition in the CFO role, with Andy Cheung joining to focus on margin discipline and working capital efficiency.
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Q&A Session Highlights
Drivers of Oklahoma segment margin recovery and sequential expectations
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Management explained that normalized Oklahoma margins are near 30% when excluding Memphis overhead, with the gap to historical highs caused by intentional outsourcing and price-cost timing. Sequential margin improvement is expected in Q2 and Q3 as pricing actions flow through the backlog and peak summer demand improves absorption.
Strategic rationale for accelerating Basics production and revenue guidance
The decision to accelerate production was driven by exceptionally strong data center demand and a desire to capitalize on market share opportunities with differentiated products. Management noted that the increased volume accelerates the payback period for recent capacity investments despite the temporary margin trade-off.
Customer diversification and product mix within the data center segment
AAON is actively working to broaden its customer base to reduce concentration risk while seeing demand across its entire portfolio, including airside products and liquid cooling. There is increasing interest in AI-centric free cooling chillers designed for higher fluid temperatures required by AI workloads.
Long-term capacity targets and capital expenditure requirements
Current facilities have a revenue potential exceeding $2 billion, and the $190 million CapEx plan for 2026 remains intact to support this trajectory. The heavy investment phase for Memphis is largely complete, meaning future growth will not trigger the same level of massive capital outlays seen recently.
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- Stocks making the biggest moves midday: Planet Fitness, Whirlpool, Vital Farms, Shake Shack & more
May 7, 2026
Check out the companies making the biggest moves midday: Planet Fitness — Shares fell nearly 33% after the gym operator lowered its full-year earnings outlook. The company now sees its bottom line growing about 4% year on year. That's down from a forecast that called for an expansion of 9% to 10%. Vital Farms — The egg producer's stock dropped 20% on a surprise loss for the first quarter. Vital Farms lost 3 cents per share, excluding certain items. Analysts polled by FactSet expected a profit of 6 cents per share. The company also cut its full-year earnings outlook. Datadog — Shares are up by 28% after the software company beat Q1 expectations. The company reported earnings per share of 60 cents, which exceeded FactSet's consensus of 51 cents per share. Their Q2 revenue guidance sits between $1.07 to $1.08 billion, which is above FactSet's $993.9 million. AAON — The Oklahoma-based air conditioning and heating equipment manufacturer's stock soared 40% after first-quarter earnings, EBITDA and revenue all topped Wall Street analysts' estimates, according to FactSet, and AAON raised its full-year revenue guidance by as much as 45%. Shake Shack — Shares tumbled 29% after the burger chain's first-quarter results fell short of expectations and it reported an operating loss of $2.6 million. Shake Shack's earnings per share broke even, versus earnings of 12 cents a share expected from analysts polled by LSEG. Revenue came in at $366.7 million, versus the $372 million consensus estimate. Whirlpool — Shares of the manufacturer of household appliances lost 12% after it slashed guidance for the full year. Whirlpool now sees adjusted earnings ranging from $3 to $3.50 per share on revenue of roughly $15 billion. Previously, the company guided for $6 per share and $15.3 billion to $15.6 billion. The company also said in a regulatory filing that "War in Iran resulted in recession-level industry decline in the U.S. as consumer confidence collapsed in late February and March." Shell — U.S.-listed shares of the British energy company shed 2.7%. Shell reported stronger-than-expected first-quarter profit and cut the pace of its quarterly share buyback to $3 billion from $3.5 billion. Oil prices, which had surged during the Iran conflict, have dropped below $100. Carlyle Group — The private-equity firm's stock shed 3.2% after the company reported after-tax distributable earnings of 89 cents per share for the first quarter, short of the 93 cent FactSet consensus estimate. Carlyle also posted a drop in revenue from a year prior. Arm Holdings — The semiconductor company posted fourth-quarter adjusted earnings of 60 cents and $1.49 billion in revenue. Analysts surveyed by LSEG were looking for earnings of 58 cents and $1.47 billion in revenue. Shares fell 10% after initially surging. Zillow Group — Shares fell 2.4% after the real estate marketplace posted first-quarter residential revenue of $450 million, below StreetAccount's $454.2 million estimate. However, the company posted an overall beat on both the top and bottom lines for the quarter. Fortinet — The cybersecurity stock climbed 20%. Fortinet lifted its full-year billings guidance, calling for a range of $8.8 billion to $9.1 billion, versus its earlier forecast for $8.4 billion to $8.6 billion. Earnings and revenue guidance for the full year beat the LSEG consensus estimate. IonQ — Shares slid more than 8%. The quantum computing company said that adjusted losses before interest, taxes, depreciation and amortization came in at $96.8 million in the first quarter. That's wider than the loss of $80.4 million analysts polled by FactSet had sought. Fastly — The cloud platform provider's stock tanked 39% as its guidance appeared to disappoint Wall Street. Fastly sees second-quarter earnings ranging from 5 cents to 8 cents per share, versus the LSEG consensus call for 4 cents. Revenue is expected to range from $170 million to $176 million, versus the $170 million sought by analysts. Separately, first-quarter results beat estimates on the top and bottom lines. Albemarle — The specialty chemical producer saw shares jump 7%. Adjusted earnings in the first quarter trounced the Street's forecast, landing at $2.95 per share versus the $1.19 per share analysts sought, per FactSet. Revenue also beat expectations, coming in at $1.43 billion compared to estimates for $1.34 billion. Adjusted EBITDA also surpassed estimates, weighing in at $663.8 million, versus $443.7 million. Akamai Technologies — The cybersecurity and cloud computing company's shares lost 7%. Akamai is expected to report on Thursday after the close. Shares have been on a hot streak leading up to the earnings release, rising for a sixth straight session on Wednesday and touching a new 52-week high. Papa John's International — The pizza chain's first-quarter results fell short of expectations, with adjusted earnings at 32 cents a share on revenue of $478.6 million. Analysts polled by FactSet expected earnings of 37 cents a share on revenue of $485.5 million. The stock shed 4.5%. Warby Parker — The eyeglasses maker's shares rose nearly 9% after first-quarter revenue of $242 million topped the $239 million expected from analysts, per LSEG. Its earnings of 3 cents per share fell short of the 11 cents consensus estimate, however. Peloton Interactive — Shares jumped 7.9% after Peloton Interactive reported third-quarter revenue of $630.9 million, more than the $618.3 million expected by analysts polled by FactSet. On the other hand, quarterly adjusted EBITDA of $126.2 million missed the expected $128.3 million — CNBC's Sarah Min, Michelle Fox, Darla Mercado, Scott Schnipper,, Ananya Chetia, Lisa Han and Alex Harring contributed reporting. Correction: This story has been revised to reflect that Datadog reported first-quarter earnings per share of 60 cents. A previous version misstated the earnings per share.
- Why AAON Stock Jumped More Than 50% Today
May 7, 2026
Shares of AAON(NASDAQ: AAON) soared as much as 51.6% on Thursday morning thanks to a stellar earnings report. The industrial air conditioning, heating, and cooling expert's stock had chilled slightly to a 40.4% gain as of 12:30 p.m. ET. Either way, the stock is trading at an all-time high today.Image source: Getty Images.
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AAON's quarter was too hot to handle
Wall Street expected a decent quarter from AAON. What it got was a blowout.
Revenue of $497 million crushed the $381 million consensus. That's a 54% year-over-year jump. Earnings rose 37% to $0.48 per diluted share. Here, the average analyst had expected roughly $0.45 per share.
So far, pretty great. But the real story was the backlog of unfilled orders.
AAON now has a $2.1 billion order book. That's more than double the backlog seen a year ago, and it's full of data center contracts.
Keeping AI cool is heating up AAON's business
Margins dipped as AAON scrambled to expand its manufacturing capacity, but with that kind of demand pipeline, investors voted with their wallets in favor of some heavy spending.
Here's something the AI hype cycle doesn't always mention: Data centers housing AI infrastructure generate enormous amounts of heat and require specialized cooling solutions. AAON has been retooling its manufacturing facilities to meet this demand. Management now expects the Basics segment (which focuses on data center cooling systems) to generate roughly $1 billion in revenue for 2026. The long-term capacity target now stands north of $2 billion.
"As we progress through 2026, our priorities are clear and unchanged," CEO Matt Tobolski said in a prepared statement. "Drive throughput, convert backlog, and deliver disciplined margin progression over time."
Sounds like a high-growth plan to me, and to many AAON investors. Today, the stock is trading at a lofty 105 times trailing earnings.
Should you buy stock in Aaon right now?
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aaon. The Motley Fool has a disclosure policy.
Why AAON Stock Jumped More Than 50% Today was originally published by The Motley Fool
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- Why AAON Stock Jumped More Than 50% Today
May 7, 2026 · fool.com
AAON stock hit all-time highs on Thursday. A blowout earnings report and surging data center demand lit the fuse.
- Aaon (AAON) Surpasses Q1 Earnings and Revenue Estimates
May 7, 2026
Aaon (AAON) came out with quarterly earnings of $0.48 per share, beating the Zacks Consensus Estimate of $0.31 per share. This compares to earnings of $0.37 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +53.21%. A quarter ago, it was expected that this maker of air conditioning and heating equipment would post earnings of $0.45 per share when it actually produced earnings of $0.39, delivering a surprise of -13.33%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Aaon, which belongs to the Zacks Building Products - Air Conditioner and Heating industry, posted revenues of $496.94 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 28.61%. This compares to year-ago revenues of $322.05 million. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Aaon shares have added about 28.9% since the beginning of the year versus the S&P 500's gain of 7.6%.
What's Next for Aaon?
While Aaon has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Aaon was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.48 on $427.67 million in revenues for the coming quarter and $2.00 on $1.73 billion in revenues for the current fiscal year.
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Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Air Conditioner and Heating is currently in the top 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Tecogen Inc. (TGEN), another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 12.
This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of -233.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Tecogen Inc.'s revenues are expected to be $5.07 million, down 30.4% from the year-ago quarter.
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