AAON 90.03 (+1.65%)
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Last update on 2024-06-07

AAON (AAON) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

AAON (AAON) scored 7/9 on the Piotroski F-Score in 2023, indicating strong financial health based on profitability, liquidity, and operational efficiency.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 7

We're running AAON (AAON) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
0
Leverage is declining?
1
Current Ratio is growing?
1
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

**AAON (AAON) Piotroski F-Score Analysis Summary** The Piotroski Score for AAON is 7 out of 9, indicating strong financial health. Here's a breakdown of the criteria evaluations: 1. **Profitability**: - Positive Net Income for 2023: $177,623,000 (up by 77% YoY) [Score: 1] - Positive Cash Flow from Operations (CFO): $158,895,000 [Score: 1] - Return on Assets (ROA): Increased from 0.1371 in 2022 to 0.2024 in 2023 [Score: 1] - Operating Cashflow lower than Netincome: Operating Cash Flow is $158,895,000 vs. Net Income $177,623,000 [Score: 0] 2. **Liquidity and Leverage**: - Leverage: Decreased from 0.0946 in 2022 to 0.0515 in 2023 [Score: 1] - Current Ratio: Increased from 2.3983 in 2022 to 3.2265 in 2023 [Score: 1] - Number of Shares Outstanding: Increased from 79,582,479 in 2022 to 81,156,114 in 2023 [Score: 0] 3. **Operating Efficiency**: - Gross Margin: Increased from 0.2673 in 2022 to 0.3415 in 2023 [Score: 1] - Asset Turnover Ratio: Increased from 1.2141 in 2022 to 1.3314 in 2023 [Score: 1] Historical data indicate consistent profitability, positive cash flow trends, low leverage, strong current ratio, and improving efficiency metrics.

Insights for Value Investors Seeking Stable Income

**Recommendation: Worth Considering for Investment** With a Piotroski Score of 7, AAON shows signs of strong financial health. The company excels in key areas like profitability, liquidity, and operational efficiency. However, it's essential to note the increased number of outstanding shares, which may indicate potential dilution. Despite this, AAON's strong cash flow, growing ROA, declining leverage, and rising gross margin and asset turnover suggest stability and growth opportunities. For a more comprehensive evaluation, investors should consider the company's management strategies and future growth potential. Historical trends show resilience and positive performance, making AAON a promising candidate for further investment research.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of AAON (AAON)

Company has a positive net income?

This criterion examines the company's net income to determine profitability. Consistently positive net income is a good indicator of a healthy business.

Historical Net Income of AAON (AAON)

AAON’s net income for 2023 stands at $177,623,000, which is significantly positive. This represents a commendable increase from previous years. For instance, in 2022, the net income was $100,376,000, which means 2023 has seen an approximately 77% increase year-on-year. Looking at the broader 20-year time frame, the company has consistently reported positive net income, showcasing a robust upward trend in profitability. This positive net income for 2023 clearly earns AAON 1 point in the Piotroski Score.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the cash a company generates from its normal business operations. Positive CFO is vital.

Historical Operating Cash Flow of AAON (AAON)

AAON's CFO for 2023 is $158,895,000, which is positive. The company has shown a strong positive trend over the last 20 years, with the current CFO being the highest ever. This positive CFO signifies robust core business operations, indicating a healthy cash conversion from sales to actual cash, critical for sustaining operations, paying dividends, and funding growth.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's ability to generate profit from its assets. A rising ROA indicates improved efficiency in using assets to generate earnings.

Historical change in Return on Assets (ROA) of AAON (AAON)

AAON's ROA increased from 0.1371 in 2022 to 0.2024 in 2023, signaling enhanced operational efficiency. This upward trend is favorable as it implies the company is better at converting its asset base into net income. Furthermore, the increase surpasses the 20-year average, reflecting robust growth. Historically, AAON's ROA has fluctuated, but this recent elevation demonstrates resilience amidst industry conditions. The industry median for 2023 is 0.3242, positioning AAON below its peers; however, the improvement still points to positive internal developments. Therefore, AAON earns 1 point for this criterion.

Operating Cashflow are higher than Netincome?

This criterion evaluates whether a company’s operating cash flow is higher than its net income. It is important because operating cash flow is a measure of whether the company is generating sufficient cash from its regular operations to sustain itself, independent of accounting manipulations.

Historical accruals of AAON (AAON)

For AAON in 2023, the operating cash flow is $158,895,000 while the net income is $177,623,000. Given that the operating cash flow is lower than net income, this criterion is not met and hence is assigned a score of 0. This trend can indicate potential issues or aggressive accounting practices. Over the past 20 years, AAON has seen a fluctuating trend in this metric. For example, in 2020, AAON showed an operating cash flow of $128,814,000 against a net income of $79,009,000, meeting the criterion convincingly. Thus, while 2023's results are not favorable in this aspect, it is essential to consider this in the context of historical performance and the company's broader financial health.

Liquidity of AAON (AAON)

Leverage is declining?

Change in leverage evaluates a company's debt levels compared to its equity to determine financial risk

Historical leverage of AAON (AAON)

The leverage for AAON in 2022 stood at 0.0946, which has since decreased to 0.0515 in 2023. This decrease signifies that the company is reducing its reliance on debt, resulting in a lower financial risk. Reviewing historical data over the past 20 years, AAON has shown consistently low leverage levels, with the only spikes occurring in recent years. Thus, the improvement from 2022 to 2023 is favorable and adds 1 point to the Piotroski score under this criterion.

Current Ratio is growing?

The Change in Current Ratio criterion assesses a company's ability to cover its short-term liabilities with its short-term assets. An increasing current ratio indicates improved liquidity and financial stability.

Historical Current Ratio of AAON (AAON)

The current ratio of AAON (AAON) has increased from 2.3983 in 2022 to 3.2265 in 2023, reflecting a stronger liquidity position. This indicates that the company is in a better position to meet its short-term obligations, earning it 1 point for this criterion. Over the last 20 years, AAON's current ratio has generally been above the industry median, except for 2020 and 2021 when it just slightly dipped beneath it, demonstrating consistent financial management. Such a trend is crucial for stakeholders as it denotes low risk of liquidity crunch and strengthens the company's creditworthiness.

Number of shares not diluted?

Change in shares outstanding refers to the difference in the number of shares that a company has issued and is important as it may affect earnings per share and indicates if a company is issuing more shares or buying back shares.

Historical outstanding shares of AAON (AAON)

AAON had 79,582,479 outstanding shares in 2022 and this number increased to 81,156,114 in 2023. This trend indicates an increase in the outstanding shares and therefore would be assigned 0 points for this criterion according to the Piotroski Analysis. Examining the 20-year trend data, AAON has seen varying levels of outstanding shares with noticeable decreases between 2007 and 2010 and substantial increases in recent years, particularly from 2019 onwards. This upward trend could suggest a range of strategic moves such as capital raising, but also potential dilution effects for existing shareholders.

Operating of AAON (AAON)

Cross Margin is growing?

Change in Gross Margin: This criterion examines the company's ability to improve its profitability from its core activities relative to the prior year. A rising gross margin indicates improved efficiency in production and cost management.

Historical gross margin of AAON (AAON)

For AAON, the gross margin increased from 0.2673 in 2022 to 0.3415 in 2023. This is a notable enhancement, reflecting a more effective control over production costs and pricing strategies. This increase results in a 1 point attribution under the Piotroski analysis. Based on historical data over the last 20 years, the gross margin for AAON has fluctuated but generally improved. The year 2023's margin is one of the highest, surpassed only occasionally in the past. It is important to note that this gross margin is not just an improvement compared to last year but also higher than the industry median gross margin of 0.3242 in 2023, which underscores AAON's competitiveness in production and cost efficiency.

Asset Turnover Ratio is growing?

Change in Asset Turnover measures the efficiency of a company in using its assets to generate sales. An increasing ratio indicates better performance.

Historical asset turnover ratio of AAON (AAON)

The Asset Turnover for AAON has increased from 1.2141 in 2022 to 1.3314 in 2023, a positive trend that warrants 1 point. This uptick suggests improved asset utilization efficiency. Over the past 20 years, however, the Asset Turnover ratio has shown fluctuations, peaking at 2.0133 in 2008 and dipping to 0.9726 in 2021. The current increase continues a rebound from that 2021 low, reflecting positively on AAON's recent operational improvements and asset management.


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