Investment Thesis
Applied Industrial Technologies demonstrates solid fundamental health with strong liquidity (3.68x current ratio), healthy leverage (0.31x debt/equity), and robust free cash flow generation ($205.4M). However, the extraordinary revenue growth of 745,757.5% YoY is anomalous and likely represents a data quality issue or major acquisition, creating uncertainty about underlying operational growth quality despite improving net income and positive margin profile.
AIT Strengths
- Exceptional free cash flow generation at $205.4M with 8.7% FCF margin demonstrates capital efficiency
- Strong balance sheet with 3.68x current ratio and conservative 0.31x debt/to-equity ratio providing financial flexibility
- Solid interest coverage of 13.8x indicates low financial distress risk despite debt obligations
- Improving profitability with net income up 1.9% YoY and healthy gross margin of 30.3% in cyclical wholesale sector
AIT Risks
- Extraordinary revenue growth figure (745,757.5% YoY) is highly suspicious and suggests potential data anomaly, acquisition, or accounting restatement requiring clarification
- Modest ROE of 10.5% and ROA of 6.2% indicate moderate capital efficiency despite strong cash generation
- Operating margin of 10.7% is respectable but leaves limited upside if sector competitiveness pressures emerge
- 14 Form 4 insider filings warrant monitoring for potential insider selling patterns that could signal management confidence concerns
Key Metrics to Watch
- Revenue sustainability and organic growth rate (excluding acquisition effects) in next quarters
- Free cash flow conversion maintaining above 8% of revenue
- Operating margin expansion potential given 10.7% current level
- Debt reduction trajectory given $572.3M long-term debt and strong FCF generation
AIT Financial Metrics
AIT Profitability Ratios
AIT Balance Sheet & Liquidity
AIT 5-Year Financial Trend
5-Year Trend Summary: APPLIED INDUSTRIAL TECHNOLOGIES INC's revenue has grown significantly by 31% over the 5-year period, indicating strong business expansion. The most recent EPS of $8.84 reflects profitable operations.
AIT Growth Metrics (YoY)
AIT Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $1.1B | $93.3M | $2.39 |
| Q1 2026 | $1.1B | $92.1M | $2.36 |
| Q3 2025 | $1.1B | $91.2M | $2.48 |
| Q2 2025 | $1.1B | $91.2M | $2.32 |
| Q1 2025 | $1.1B | $92.1M | $2.36 |
| Q3 2024 | $1.1B | $76.9M | $2.47 |
| Q2 2024 | $1.1B | $76.9M | $2.05 |
| Q1 2024 | $1.1B | $76.9M | $1.97 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AIT Capital Allocation
AIT SEC Filings
Access official SEC EDGAR filings for APPLIED INDUSTRIAL TECHNOLOGIES INC (CIK: 0000109563)