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AAON, Inc. (AAON) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Aaon (AAON - Free Report) ? Shares have been on the move with the stock up 14% over the past month. The stock hit a new 52-week high of $71.67 in the previous session. Aaon has gained 41.9% since the start of the year compared to the 50.6% move for the Zacks Construction sector and the 73.2% return for the Zacks Building Products - Air Conditioner and Heating industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 6, 2023, Aaon reported EPS of $0.64 versus consensus estimate of $0.55.
Valuation Metrics
Aaon may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Aaon has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 34.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 29.5X. On a trailing cash flow basis, the stock currently trades at 41.8X versus its peer group's average of 26.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Aaon currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Aaon meets the list of requirements. Thus, it seems as though Aaon shares could still be poised for more gains ahead.
How Does AAON Stack Up to the Competition?
Shares of AAON have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Lennox International, Inc. (LII - Free Report) . LII has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Lennox International, Inc. beat our consensus estimate by 13.53%, and for the current fiscal year, LII is expected to post earnings of $19.64 per share on revenue of $4.9 billion.
Shares of Lennox International, Inc. have gained 9.6% over the past month, and currently trade at a forward P/E of 24.99X and a P/CF of 27.06X.
The Building Products - Air Conditioner and Heating industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AAON and LII, even beyond their own solid fundamental situation.
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AAON, Inc. (AAON) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Aaon (AAON - Free Report) ? Shares have been on the move with the stock up 14% over the past month. The stock hit a new 52-week high of $71.67 in the previous session. Aaon has gained 41.9% since the start of the year compared to the 50.6% move for the Zacks Construction sector and the 73.2% return for the Zacks Building Products - Air Conditioner and Heating industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 6, 2023, Aaon reported EPS of $0.64 versus consensus estimate of $0.55.
Valuation Metrics
Aaon may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Aaon has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 34.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 29.5X. On a trailing cash flow basis, the stock currently trades at 41.8X versus its peer group's average of 26.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Aaon currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Aaon meets the list of requirements. Thus, it seems as though Aaon shares could still be poised for more gains ahead.
How Does AAON Stack Up to the Competition?
Shares of AAON have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Lennox International, Inc. (LII - Free Report) . LII has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Lennox International, Inc. beat our consensus estimate by 13.53%, and for the current fiscal year, LII is expected to post earnings of $19.64 per share on revenue of $4.9 billion.
Shares of Lennox International, Inc. have gained 9.6% over the past month, and currently trade at a forward P/E of 24.99X and a P/CF of 27.06X.
The Building Products - Air Conditioner and Heating industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AAON and LII, even beyond their own solid fundamental situation.