NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- AAON's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, AAON's share price has jumped by 39.36%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAON should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- AAON's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
- AAON INC's earnings per share declined by 33.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, AAON INC reported lower earnings of $0.87 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus $0.87).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Building Products industry and the overall market, AAON INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
AAON, Inc., together with its subsidiaries, engages in the manufacture and sale of air conditioning and heating equipment primarily in the United States and Canada. The company has a P/E ratio of 26.8, below the average materials & construction industry P/E ratio of 26.9 and above the S&P 500 P/E ratio of 17.7. AAON has a market cap of $488.8 million and is part of the
industry. Shares are up 21.2% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our