Core Points - AAON, Inc. has scheduled its quarterly conference call for November 7, 2024, at 5:15 p.m. EST to discuss third quarter 2024 financial results [1] - The financial results will be released immediately after the market closes on the same day [1] - The conference call will be accessible via dial-in and a listen-only webcast [1] Company Overview - AAON, founded in 1988, is a global leader in HVAC solutions for commercial and industrial indoor environments [2] - The company focuses on designing and manufacturing highly configurable equipment to enhance efficiency, performance, and long-term value [2] - AAON is headquartered in Tulsa, Oklahoma, featuring a world-class innovation center and testing lab [2]

Investors in AAON, Inc. (AAON) need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2024 $45.00 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean t ...

The Zacks Building Products - Air Conditioner & Heating industry is well-positioned to capitalize on key trends and opportunities, driven by the energy transition and the growing pro-environmental movement. As we move into 2024 and beyond, companies in this sector are experiencing increased demand for renewable energy solutions, unlocking significant growth potential. Despite facing inflationary challenges, major players like Comfort Systems USA, Inc. (FIX) and AAON, Inc. (AAON) are thriving by delivering c ...

For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Aaon (AAON) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.Aaon is a member of the Construction sector. This group includes 91 individual stocks and currently holds a Zacks Sector Rank of #2. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks R ...

Company Overview - AAON, Inc. has launched Delta Class, an advanced Dedicated Outdoor Air System (DOAS) technology to meet evolving industry regulations and energy efficiency demands [1] - The company has been a leader in DOAS technology since its founding in 1988, focusing on high-efficiency equipment and fresh air solutions [1] Product Features - Delta Class includes variable capacity compressors, modulating reheat, 100% outdoor air dampers, and advanced energy recovery systems [1] - The design of Delta Class is compact and efficient, aimed at reducing carbon footprint while catering to high-occupancy spaces such as schools, fitness centers, restaurants, and entertainment venues [1] - Each Delta Class unit undergoes rigorous testing at AAON's AMCA-accredited Norman Asbjornson Innovation Center to ensure high performance and reliability [1] Stock Performance - AAON's shares have increased by 21.5% over the past three months, outperforming the Zacks Building Products - Air Conditioner and Heating industry's growth of 5.7% [2] - The company's earnings per share (EPS) estimate has risen to $2.29 from $2.24 in the last 60 days, indicating a year-over-year growth of 4.1% [2] Market Position - AAON balances its focus between new construction and replacement applications, capitalizing on robust replacement demand in the non-residential building market [2]

Core Viewpoint - AAON, Inc. has launched Delta Class, an advanced Dedicated Outdoor Air System (DOAS) technology, emphasizing its commitment to innovation, efficiency, and sustainability in response to evolving industry regulations and increasing energy efficiency demands [1][2]. Group 1: Product Features and Innovations - Delta Class incorporates features such as variable capacity compressors, modulating reheat, 100% outdoor air dampers, and advanced energy recovery systems, designed to meet the complex needs of high-occupancy spaces [2][3]. - The compact and efficient design of Delta Class aims to reduce carbon footprint while providing high-quality air solutions for various environments, including schools, fitness centers, and restaurants [2][3]. Group 2: Company Background and Commitment - Founded in 1988, AAON has established itself as a leader in high-performance HVAC solutions, consistently delivering premium, high-efficiency equipment [1][4]. - The company has a strong culture focused on lifecycle cost and high efficiency, ensuring fresh and clean air across diverse building types since the introduction of DOAS technology [2][4]. - AAON's state-of-the-art testing laboratory, the Norman Asbjornson Innovation Center (NAIC), rigorously tests Delta Class units to ensure they meet high performance and reliability standards [3].

Company Performance - Aaon (AAON) has returned 24.5% year-to-date, outperforming the Construction sector's average return of 16.7% [2] - The Zacks Consensus Estimate for Aaon's full-year earnings has increased by 3.2% over the past three months, indicating improving analyst sentiment [2] - Aaon currently holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock [1][2] Industry Context - Aaon is part of the Building Products - Air Conditioner and Heating industry, which has an average year-to-date return of 25%, indicating that Aaon is slightly underperforming its industry [3] - Lennox International (LII), another stock in the same industry, has a year-to-date return of 29.8% and also holds a Zacks Rank of 2 (Buy) [2][3] - The Construction sector, which includes 91 companies, ranks 2 in the Zacks Sector Rank, reflecting strong performance among its constituents [1]

Investment Thesis - AAON, Inc. is expected to see significant earnings growth, with a projected increase of 23.06% in 2025 and 24.19% in 2026 after a flat 2024 [3][4] - The company has a one-year price target of $99.00 and is rated as a Buy by analysts [3][20] Company Overview - Founded in 1987, AAON specializes in HVAC systems for commercial and industrial markets, generating 69% of its revenue from rooftop units and 97% domestically [4] - The company operates through three segments: AAON Oklahoma, AAON Coil Products, and BASX, with a significant customer, Texas AirSystems, accounting for 13.8% of sales in 2023 [4] - AAON reported a record backlog of $650 million at the end of Q2-2024, up from $526 million the previous year, indicating strong demand [4] Financial Performance - In Q2-2024, AAON's net sales increased by 10.4% to $313.6 million, with a gross margin of 36.1% and earnings per diluted share rising 12.7% to $0.62 [7] - The sales growth was primarily driven by the BASX segment, which saw a 58.3% increase in sales, mainly from data center equipment [7] - The company had total assets of $1.011 billion and total liabilities of $270.2 million, including $85.9 million in long-term debt [7] Competitive Landscape - AAON faces intense competition from larger companies such as Lennox International, Trane Technologies, and Carrier Global, but it competes on total value rather than price [5][6] - The company has maintained higher margins than industry medians, with a gross margin of 36.27% compared to 31.33% for the sector [6] Growth Prospects - AAON's revenue and earnings are expected to grow significantly in the coming years, with analysts projecting a return to growth in 2025 after a flat 2024 [10][11] - The company has invested approximately $43.7 million in R&D in 2023 to enhance its product offerings and maintain competitive advantages [4] Valuation - AAON's stock is considered overvalued based on current metrics, with a PEG ratio above fair value, indicating that growth may not justify high P/E ratios [16][17] - The average price target from Wall Street analysts is $99.00, suggesting an upside potential of 11.62% from the current trading price [19] Dividend Information - AAON has a forward dividend yield of 0.36% with an annual payout of $0.32, having paid dividends for 16 consecutive years [13]

For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Aaon (AAON) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out.Aaon is a member of the Construction sector. This group includes 91 individual stocks and currently holds a Zacks Sector Rank of #3. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within ...

Financial Data and Key Metrics Changes - Net sales increased by 10.4% to $313.6 million from $284 million in Q2 2023, driven primarily by the BasX segment which saw a 58.3% increase in net sales [18][19] - Gross profit rose by 20.3% to $113.1 million, with gross margin improving to 36.1% from 33.1% year-over-year [18][19] - Diluted earnings per share increased by 12.7% to $0.62, with a tax rate of 22.1% for the quarter [18][19] Business Line Data and Key Metrics Changes - The BasX segment experienced a significant sales increase of 58.3% year-over-year, largely due to data center market demand, with sales up 142.4% year-over-year [7][8] - The AAON Oklahoma segment and AAON Coil Products segment saw sales growth of 3.4% and 4.3%, respectively [18] - The gross margin for the AAON Coil Products segment improved to 41.9%, up from 24.9% [12] Market Data and Key Metrics Changes - Total company backlog reached a record $650 million, up 23.5% year-over-year and 16.4% sequentially [9] - Data center sales accounted for 13.7% of total net sales in Q2, up from 10.5% in the first half of the year [8] Company Strategy and Development Direction - The company is focusing on expanding production capacity, particularly in the BasX segment, to meet the growing demand in the data center market [11][12] - There is an emphasis on innovation and tailored solutions for data center cooling, which is expected to drive future growth [24][66] - The company anticipates a challenging operating environment due to macroeconomic factors and refrigerant transition but remains optimistic about long-term growth [15][22] Management's Comments on Operating Environment and Future Outlook - Management noted that while the near-term visibility is limited, they expect to manage through volatility better than competitors [15][22] - The company is preparing for a transition to R-454B refrigerant, with expectations that most municipalities will adopt the new refrigerant by October [34] - Management expressed confidence in the long-term prospects of the company, citing strong operational performance and a robust pipeline of opportunities [21][24] Other Important Information - The company repurchased $100 million of shares, reflecting confidence in its long-term prospects [20] - Capital expenditures for the first half of the year increased by 24.4% to $75.4 million [20] Q&A Session Summary Question: What is driving the expected stronger Q4 sales compared to Q3? - Management indicated that increased production capacity for data centers is the primary driver, with steady orders for rooftop units [28] Question: Can you elaborate on the transition to R-454B refrigerant and associated risks? - Management highlighted that the transition is complex, with some customers needing to modify buildings to accommodate the new refrigerant, which could lead to a surge in R-410A orders before the transition [34][35] Question: What is the outlook for the rooftop business in the coming quarters? - Management expects continued volatility in rooftop sales due to macroeconomic factors and the refrigerant transition, but remains optimistic about the data center business [48][49]