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AAON, Inc. (NASDAQ:AAON) just released its latest first-quarter results and things are looking bullish. AAON beat earnings, with revenues hitting US$137m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 16%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for AAON from three analysts is for revenues of US$512.6m in 2020 which, if met, would be a reasonable 4.0% increase on its sales over the past 12 months. Statutory earnings per share are predicted to expand 13% to US$1.45. Before this earnings report, the analysts had been forecasting revenues of US$504.2m and earnings per share (EPS) of US$1.42 in 2020. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$43.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values AAON at US$52.00 per share, while the most bearish prices it at US$35.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AAON's past performance and to peers in the same industry. It's pretty clear that there is an expectation that AAON's revenue growth will slow down substantially, with revenues next year expected to grow 4.0%, compared to a historical growth rate of 6.5% over the past five years. Compare this to the 47 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.7% per year. So it's pretty clear that, while AAON's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards AAON following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$43.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for AAON going out to 2021, and you can see them free on our platform here..
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