As you might know, AAON, Inc. (NASDAQ:AAON) just kicked off its latest third-quarter results with some very strong numbers. AAON delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$707m-17% above indicated-andUS$0.83-44% above forecasts- respectively 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, AAON's six analysts are now forecasting revenues of US$2.92b in 2027. This would be a substantial 29% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 55% to US$3.85. Before this earnings report, the analysts had been forecasting revenues of US$2.74b and earnings per share (EPS) of US$3.60 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for AAON
As a result, it might be a surprise to see thatthe analysts have cut their price target 8.6% to US$118, which could suggest the forecast improvement in performance is not expected to last. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values AAON at US$140 per share, while the most bearish prices it at US$104. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 23% growth on an annualised basis. That is in line with its 23% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.5% annually. So it's pretty clear that AAON is forecast to grow substantially faster than its 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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple AAON analysts - going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for AAON that you should be aware of.
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