AAON, Inc Shrugs Off Coronavirus Fears, Soars on Record Results

AAON StockAAON Stock Up 15% in 2020, Remains Bullish

Coronavirus fears and how it will impact the U.S. and global economies have gripped Wall Street. So much so that an unexpected rate cut of 50 basis points by the Federal Reserve (the biggest cut in more than a decade and first since the last financial crisis) was enough to stop the bleeding.

But thanks to record financial results, some tech stocks are faring much better than others. AAON, Inc. (NASDAQ:AAON) stock remains near record levels after announcing strong fourth-quarter results and a strong outlook.

AAON’s share price has advanced more than 15% in 2020 and is up approximately 40% year-over-year. By comparison, the S&P 500 has lost five percent of its value since the start of January and is up just 9.4% over the last 12 months.

AAON Stock Overview

AAON may not be the sexiest tech stock, but investors are pretty attracted to the strong gains it has been providing over the years. AAON, Inc. is a leading provider of commercial-use heating, ventilation, and air conditioning (HVAC) equipment in the U.S. and Canada. (Source: “About AAON,” AAON, Inc., last accessed March 3, 2020.)

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Founded in 1988 and headquartered in Tulsa, Oklahoma, the company’s product line includes rooftop units, air-handling and make-up air units, chillers, and heat recovery units. The units range in size from one ton to 230 tons.

AAON Stock Information

Market Cap $3.0 Billion
52-Week Change 38.6%
52-Week High $58.85
52-Week Low $40.89
Shares Outstanding 52.1 Million
Float 40.6 Million
50-Day Moving Average $54.29
200-Day Moving Average $49.93

(Source: “AAON, Inc. (AAON),” Yahoo! Finance, last accessed March 3, 2020.)

AAON, Inc. Reports Record Full-Year Results

AAON recently announced its financial results for the fourth quarter and year ended December 31, 2019. Fourth-quarter revenue was up 9.1% year-over-year at $112.5 million. (Source: “AAON Reports Sales And Earnings For The Fourth Quarter And Year 2019,” AAON, Inc., February 27, 2020.)

The company reported record gross profit of $36.4 million. Net income, meanwhile, jumped 33.2% to $17.3 million, or $0.33 per share.

For fiscal 2019, revenue was up 8.2% year-over-year to a record $469.3 million. Gross profit was up 15.3% at $119.4 million. Full-year net income advanced 26.9% to $53.7 million, or $1.02 per share. AAON ended the year with cash and cash equivalents of $26.8 million.

Gary Fields, president of the company, said the following:

Our increase in net sales is attributable to our continuing investment in new manufacturing equipment that has allowed us to capitalize on our existing workforce as well as reorganize production resources at our Tulsa facilities. We are witnessing operational and financial improvements as a direct result. Combined with our 2018 sales price increases, the result has been record sales for the year of 2019, an increase of 8.2%, as compared to $433.9 million in 2018.

(Source: Ibid.)

Analyst Take

AAON stock has been providing investors with stellar gains for years. And despite growing concerns about the coronavirus, it continues to trade near record levels.

Thanks to the company’s high backlog, as well as its continual improvements in operational capacity and efficiency, AAON, Inc. expects improvements in its sales and earnings in 2020.