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AAON, Inc. (NASDAQ:AAON) just released its latest quarterly results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 13% higher than the analysts had forecast, at US$135m, while EPS were US$0.38 beating analyst models by 25%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AAON after the latest results.
After the latest results, the consensus from AAON's two analysts is for revenues of US$482.0m in 2021, which would reflect a discernible 7.4% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to descend 19% to US$1.20 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$475.0m and earnings per share (EPS) of US$1.22 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target fell 18% to US$35.00, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 7.4% revenue decline a notable change from historical growth of 7.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.8% next year. It's pretty clear that AAON's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that AAON's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of AAON's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for AAON going out as far as 2022, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for AAON (1 is potentially serious!) that you need to be mindful of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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