AAON, Inc.'s Growth Makes 23x 2027 Earnings Look Reasonable

Daniel James 524 Followers Follow Summary AAON shares have dropped ~47% from highs, but underlying demand and backlog remain robust, particularly in its BASX data-center segment. Gross margin pressures stem from rapid capacity expansion and startup costs, with management expecting visible recovery by 2027 as Memphis utilization improves. Despite negative free cash flow and lowered 2026 margin guidance, AAON raises its 2026 sales-growth outlook to 55%-60% and maintains a $2B backlog. At 22.6x expected 2027 earnings, I rate AAON a Buy, seeing risk-reward as attractive if margin recovery materializes as projected. AP Chanel/E+ via Getty Images Introduction AAON, Inc. ( AAON ) has had a rough year. The shares are down approximately 47% from their 52-week high of $150.46 and now trade around $80. Some of that decline is company-specific. Gross margins have disappointed; the company is spending heavily This article was written by Daniel James 524 Followers Follow I am a part-time investor interested in equities, ETFs, macro, and emerging markets. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.