Investment Thesis
AAON experienced massive revenue growth (+8235% YoY) likely from acquisition, but net income declined 36% and ROE remains critically low at 4.3%, indicating poor integration and inefficient capital deployment. Negative free cash flow of -$48.9M combined with CapEx exceeding operating cash flow signals unsustainable burn despite positive operating income.
Strengths
- Substantial revenue growth trajectory from business combination
- Positive operating cash flow of $34M supports operational viability
- Current ratio of 2.62x indicates adequate working capital coverage
- Minimal debt burden with 0.00 debt-to-equity ratio
Risks
- Net income declined 36% YoY despite 8235% revenue growth indicating poor acquisition integration and operational efficiency
- Negative free cash flow of -$48.9M means company burns cash; CapEx at $82.9M exceeds operating cash flow by 2.4x
- Critically low returns on equity (4.3%) and assets (2.2%) demonstrate inefficient capital utilization
- Extremely low cash position ($13K) creates liquidity vulnerability if operations deteriorate
- Negative FCF margin of -9.8% is structurally unsustainable without external capital infusions
Key Metrics to Watch
- Free cash flow trend and path to positive FCF generation
- Net income recovery relative to revenue growth post-acquisition integration
- Return on equity trajectory toward industry benchmarks (10%+)
- Cash balance rebuild and working capital management
- Capital expenditure normalization relative to operating cash generation
Financial Metrics
Revenue
496.9M
Net Income
39.8M
EPS (Diluted)
$0.48
Free Cash Flow
-48.9M
Total Assets
1.8B
Cash
13.0K
Profitability Ratios
Gross Margin
25.1%
Operating Margin
11.5%
Net Margin
8.0%
ROE
4.3%
ROA
2.2%
FCF Margin
-9.8%
Balance Sheet & Liquidity
Current Ratio
2.62x
Quick Ratio
1.75x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
28,529.50x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T07:08:59.209850 |
Data as of: 2026-03-31 |
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