Investment Thesis
Smith A O Corp demonstrates exceptional financial health with robust profitability margins (14.3% net, 19.0% operating), outstanding returns on equity (29.4%) and assets (17.4%), and strong cash generation with $546M free cash flow. The company maintains a fortress balance sheet with minimal leverage (0.08x debt/equity) and exceptional interest coverage (54.0x), positioning it well to fund growth, acquisitions, or shareholder returns despite modest revenue growth.
AOS Strengths
- Outstanding profitability with net margin of 14.3% and operating margin of 19.0%, demonstrating pricing power and operational efficiency
- Exceptional return metrics (ROE 29.4%, ROA 17.4%) indicate superior capital allocation and asset utilization
- Strong cash generation with $546M free cash flow and 14.3% FCF margin, providing financial flexibility
- Conservative balance sheet with 0.08x debt/equity ratio and $174.5M cash, indicating minimal financial risk
- Excellent interest coverage of 54.0x demonstrates strong debt service capacity
AOS Risks
- Slow revenue growth at 0.3% YoY suggests limited organic expansion in household appliances sector
- Quick ratio of 0.94x indicates potential near-term liquidity constraints if operational cash flow declines
- Concentrated exposure to cyclical household appliances sector vulnerable to economic downturns and consumer spending
- 27 Form 4 filings in 90 days warrant monitoring for insider activity patterns and potential conflicts
Key Metrics to Watch
- Revenue growth acceleration to confirm market share gains and demand strength
- Free cash flow trends and capital deployment decisions
- Gross margin stability to monitor pricing power and input cost pressures
AOS Financial Metrics
AOS Profitability Ratios
AOS Balance Sheet & Liquidity
AOS 5-Year Financial Trend
5-Year Trend Summary: SMITH A O CORP's revenue has grown significantly by 21% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.69 reflects profitable operations.
AOS Growth Metrics (YoY)
AOS Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $902.6M | $120.1M | $0.82 |
| Q2 2025 | $1.0B | $152.2M | $1.06 |
| Q1 2025 | $963.9M | $136.6M | $0.95 |
| Q3 2024 | $902.6M | $120.1M | $0.82 |
| Q2 2024 | $960.8M | $156.2M | $1.04 |
| Q1 2024 | $966.4M | $126.9M | $0.84 |
| Q3 2023 | $874.2M | $109.8M | $0.71 |
| Q2 2023 | $960.8M | $126.2M | $0.81 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AOS Capital Allocation
AOS SEC Filings
Access official SEC EDGAR filings for SMITH A O CORP (CIK: 0000091142)