CORRECTED-AAON Q4 revenue beats expectations on capacity expansion

Overview

• HVAC solutions provider's Q4 revenue rose 42.5% yr/yr, beating analyst expectations

• Company's Q4 gross margin slightly declined due to production ramp-up costs

• Record year-end backlog of $1.83 bln, up 110.9% yr/yr, supports 2026 growth

Outlook

• Company expects 2026 sales growth of 18%-20%

• Company anticipates 2026 gross margins of 29%-31%

• Company expects SG&A expenses to be ~16% of sales in 2026

Result Drivers

• BASX SALES GROWTH - BASX-branded sales increased 138.8% driven by strong demand for data center equipment

• CAPACITY EXPANSION - Production capacity expansion, including the new Memphis facility, supported sales growth

• BACKLOG SUPPORT - Record backlog of $1.83 billion provides strong visibility for 2026 growth

Company press release: ID:nPn5PW9g1a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electrical components & equipment peer group is "buy"

• Wall Street's median 12-month price target for Aaon Inc is $116.00, about 14.6% above its February 27 closing price of $101.20

• The stock recently traded at 51 times the next 12-month earnings vs. a P/E of 48 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.