Investment Thesis
AAON demonstrates strong profitability fundamentals with healthy gross margins (26.7%) and solid returns on equity (12.0%), supported by exceptional liquidity (2.63x current ratio). However, critical data anomalies—including implausible 8235% revenue growth, negative free cash flow of -$82.4M despite $534K operating cash flow, and cash equivalents of only $13K against $1.7B assets—suggest either severe reporting inconsistencies or material operational distress requiring clarification.
AAON Strengths
- Strong gross margin of 26.7% indicates pricing power and operational efficiency in manufacturing
- Excellent liquidity position with current ratio of 2.63x and no debt (0.00x debt/equity)
- Solid ROE of 12.0% and ROA of 6.4% demonstrate reasonable capital deployment efficiency
- Operating margin of 10.1% shows disciplined cost control in core operations
AAON Risks
- Severe data inconsistency: $534K operating cash flow cannot support -$82.4M free cash flow, indicating potential reporting error or cash accounting anomaly
- Implausible 8235% YoY revenue growth with concurrent 36.2% net income decline suggests one-time items, acquisition-related distortions, or data quality failure
- Cash position of $13K is financially impossible for a $1.7B asset company, indicating either critical liquidity crisis or measurement error
- Negative free cash flow of -$82.4M with $82.9M capex suggests company is consuming cash despite reported profitability
Key Metrics to Watch
- Reconcile operating cash flow ($534K) against free cash flow anomaly and cash balance verification
- Clarify revenue growth driver and validate YoY comparability; investigate net income decline despite massive top-line growth
- Confirm actual liquid cash position and working capital sufficiency for $82.9M capex program
- Monitor cash conversion and working capital trends given disconnect between GAAP profitability and cash generation
AAON Financial Metrics
Revenue
$1.4B
Net Income
$107.6M
EPS (Diluted)
$1.29
Free Cash Flow
$-82.4M
Total Assets
$1.7B
Cash Position
$13.0K
AAON Profitability Ratios
Gross Margin
26.7%
Operating Margin
10.1%
Net Margin
7.5%
ROE
12.0%
ROA
6.4%
FCF Margin
-5.7%
AAON Balance Sheet & Liquidity
Current Ratio
2.63x
Quick Ratio
1.84x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
73,124.00x
Long-term Debt
N/A
Disclaimer: This analysis is generated by Claude 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 and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: Mar 18, 2026 |
Data as of: 2025-12-31 |
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