AAON: 53.5% TTM Growth, 0.47 PEG — Backlog Doubled, the Gross-Margin Guide Cut
AAON clears this week's small-cap screen with 53.53% TTM revenue growth, a displayed 0.47 PEG and $86.54 million of trailing operating cash flow, while a doubled data-centre backlog, a cut gross-margin guide and negative free cash flow set the diligence tests.
AAON (NASDAQ: AAON) cleared all four hard filters in this week's small-cap screen. The Tulsa maker of commercial air-conditioning equipment and data-centre cooling systems reported 53.53% trailing-twelve-month revenue growth on $1.93 billion of revenue, a displayed PEG of 0.47, positive trailing operating cash flow of $86.54 million, and a $6.87 billion market capitalisation at the October 2, 2026 close. 12
The screen is a Finviz query run one market-cap bucket at a time for market capitalisations under $10 billion with a PEG below 1 and quarterly sales growth above 30%. The quarterly figure is a proxy, and the trailing-twelve-month test is verified name by name. 3
The pass is the easy part this week. AAON's June quarter revenue doubled, its backlog is 98% larger than a year ago, and the company raised full-year sales guidance by 15 percentage points at the midpoint. The same release cut the gross-margin guide by 2 points, trailing free cash flow is negative $118.79 million while capacity is built, and the two data vendors disagree about whether the PEG clears the filter at all. 145
Quantitative screen verification
| Metric | Hard screen filter | AAON observed value | Status | Data source and measurement basis |
|---|---|---|---|---|
| Market capitalisation | Under $10.0B | $6.87B | Pass | StockAnalysis AAON statistics (82.45M shares against the October 2, 2026 close of $83.27; Finviz shows $6.87B on the same share count) |
| TTM revenue growth | Above +30.0% | +53.53% | Pass | StockAnalysis AAON revenue — $1.93B for the twelve months ended June 30, 2026; Finviz shows "Sales Y/Y TTM" of 53.53% |
| PEG ratio | Under 1.00 | 0.47 (Finviz) | Pass (source-sensitive) | Finviz AAON snapshot — forward P/E divided by projected five-year EPS growth: 23.54 ÷ 50.11% = 0.47. StockAnalysis statistics lists PEG at 1.13 on its own basis |
| Operating cash flow (TTM) | Above $0.00 | +$86.54M | Pass | StockAnalysis AAON cash flow; the company's second-quarter release reports $55.0 million generated in the six months to June 30, 2026 |
The trailing revenue figure is reproducible from the filings: fiscal 2025 revenue of $1,442.08 million, plus $1,123.92 million from the first half of 2026, less $633.62 million from the first half of 2025, gives $1,932.38 million. The same sum a year earlier gives $1,258.59 million, and $1,932.38 million against that base is +53.53%. 26
How the PEG of 0.47 is built
Finviz works from forward earnings. AAON's forward P/E of 23.54 divided by a projected five-year EPS growth rate of 50.11% yields 0.47, and the same arithmetic reproduces the peer numbers in Section 4. 7
That forward multiple rests on next year's earnings, which is where the two vendors part company. StockAnalysis lists the forward P/E at 30.63 and its own PEG at 1.13, above the filter's ceiling. Against the fiscal 2026 consensus adjusted EPS of $2.36 the multiple is 35.3 times, and against the fiscal 2027 consensus of $3.50 it is 23.8 times; Finviz's 23.54 corresponds to that later year. 18
The pass therefore depends on which forecast and which growth estimate the reader accepts. Holding Finviz's forward multiple at 23.54, a five-year EPS growth estimate below about 24% would put its PEG at 1.00. On trailing numbers the multiple is higher again — 43.79 times trailing EPS of $1.90 — so the case for the price rests on the earnings growth arriving. 17
What the operating cash flow is made of
Rolling the filings forward gives the trailing figure: fiscal 2025 generated $0.54 million, the first half of 2026 generated $54.96 million, and the first half of 2025 was a $31.04 million use of cash, so the twelve months to June 30, 2026 produced $86.54 million. The company reported the same half-year movement in its release, describing operating cash flow of $55.0 million for the six months against a $31.0 million use of cash a year earlier. 45
The cash is real, and thin next to the business. Operating cash flow was 4.5% of trailing revenue, capital expenditure over the same twelve months was $205.33 million, and free cash flow was negative $118.79 million. Inventory absorbed $18.65 million and receivables $31.17 million in the June quarter alone. 5
What AAON sells
AAON builds semi-custom heating, ventilation and air-conditioning equipment in the United States, headquartered in Tulsa, Oklahoma, and reports three segments. 4
| Segment | What it makes and sells | Q2 2026 net sales | Growth (YoY) |
|---|---|---|---|
| AAON Oklahoma | Packaged commercial HVAC equipment sold under the AAON brand | $262.3M | +41.7% |
| AAON Coil Products | Coils, and BASX-branded liquid-cooling equipment for data centres | $146.7M | +150.9% |
| BASX | Custom air handling and cooling systems for data centres, built in Redmond | $218.0M | +220.7% |
(Segment figures from the second-quarter release; the three segments sum to the $626.98 million consolidated total. Of AAON Coil Products' sales, $126.6 million was BASX-branded liquid cooling, up 208.4%, so the BASX brand as a whole — counted across both segments — reached $345.0 million, up 216.2%.)
Two demand stories sit inside those three segments. The AAON brand sells packaged commercial HVAC equipment into a market management describes as soft, where AAON-branded bookings rose approximately 16% year over year in the quarter and about 45% on a two-year stack. BASX sells large engineered cooling packages into data-centre construction, where awards lump quarter to quarter. 9
On the same call, chief executive Matt Tobolski described the electric heat-pump platform, Alpha Class, as a long-term growth opportunity for customers focused on electrification and energy efficiency; orders for it rose 50% in the quarter and 54% year to date. 9
Five quarters of growth, and what bought it
| Metric | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|
| Total revenue | $311.57M | $384.24M | $424.22M | $496.94M | $626.98M |
| Revenue growth (YoY) | −0.64% | +17.41% | +42.49% | +54.30% | +101.23% |
| Net income | $15.49M | $30.78M | $32.03M | $39.82M | $56.66M |
| GAAP diluted EPS | $0.19 | $0.37 | $0.38 | $0.48 | $0.68 |
(Quarterly series from StockAnalysis AAON financials; the June 2026 and June 2025 revenue, net income and EPS figures reproduce the second-quarter release, which reported net sales of $627.0 million against $311.6 million, diluted EPS of $0.68 against $0.19, and operating income up 192.1% to $68.9 million.)
Three features of that table need explaining.
The comparison base is weak. The June 2025 quarter was the only one in the series whose revenue fell year over year, down 0.64%, and the Oklahoma segment absorbed the industry's refrigerant transition and company-specific operating problems in that period. The company said so on the call: adjusted for $18.1 million of Memphis overhead, the Oklahoma segment's gross margin expanded about 60 basis points to 31.2% in the June 2026 quarter, from 30.5%. 69
Doubling revenue cost margin. Consolidated gross margin fell to 24.3% from 26.6%, and the mix explains most of it. The Memphis plant carries lower margins than Oklahoma while it ramps, and its overhead charge against the Oklahoma segment rose to $18.1 million from $3.0 million a year earlier. AAON Coil Products printed a 16.0% gross margin against 17.5%, which management attributed to inflation, outsourcing and freight; BASX improved to 30.0% from 27.9%. Selling, general and administrative expenses fell 570 basis points to 13.3% of sales even as they rose $24.5 million in dollars, and adjusted EBITDA more than doubled to $94.2 million, a 15.0% margin against 14.9%. 49
The backlog fell sequentially while staying almost double. Total backlog ended June at $1,970.84 million, up 98.0% year over year but down 7.4% from March. The BASX-branded portion was $1,430.38 million, up 185.4% year over year and down 11.7% sequentially; AAON-branded backlog rose 9.4% year over year and 6.0% sequentially to $540.47 million. Management attributes the sequential decline to faster conversion and to the timing of large project awards, and says bookings in the quarter came in below the unusually elevated levels of recent periods. 49
Guidance went up and down in the same release. Full-year 2026 net sales growth was raised to 55%–60% from 40%–45%, gross margin was cut to approximately 25%–26% from 27%–28%, and selling, general and administrative expenses were guided to 13%–14% of sales. 4
Valuation, anchored to two data-centre thermal peers
| Metric | AAON | Vertiv (VRT) | Modine (MOD) | Lennox (LII) |
|---|---|---|---|---|
| Market capitalisation | $6.87B | $97.09B | $9.46B | $12.31B |
| TTM revenue | $1.93B | $11.48B | $3.37B | $5.30B |
| TTM revenue growth | +53.53% | +26.23% | +29.47% | −2.11% |
| TTM gross margin | 25.57% | 38.04% | 22.21% | 33.33% |
| TTM operating margin | 11.13% | 19.96% | 10.92% | 19.78% |
| Forward P/E | 30.63x | 31.99x | 21.97x | 14.34x |
| EV/EBITDA (TTM) | 24.39x | 36.33x | 22.33x | 12.20x |
| PEG (StockAnalysis) | 1.13 | 0.80 | 0.88 | 1.40 |
(Every column uses one vendor's definitions so the rows mean the same thing on each line: AAON, Vertiv, Modine, Lennox. Finviz displays AAON's PEG at 0.47, which is the figure this screen's filter is built on. Modine's fiscal year ends March 31, and its trailing figures still include the automotive business it completed spinning off into Gentherm on October 2, 2026. 10)
Vertiv and Modine are the two listed comparables whose growth is also being driven by data-centre cooling, and Lennox is the read on commercial HVAC demand. AAON's trailing revenue grew roughly twice as fast as either thermal peer and Lennox's contracted, while its EV/EBITDA sits between Modine's 22.33 times and Vertiv's 36.33 times. Its gross margin of 25.57% is the lowest of the four apart from Modine's, and the 24.3% printed in the June quarter was lower still. 111213
Six analysts cover AAON with a consensus rating of Buy and an average target of $134.75, a range of $110 to $154 against the October 2 close of $83.27. The most recent action was an initiation at Buy with a $110 target from D.A. Davidson on September 15, 2026; after the June quarter, Oppenheimer cut its target to $125 from $145 and Robert W. Baird to $135 from $150, both on August 11. 8
Growth catalysts
A $1.43 billion BASX backlog. BASX-branded backlog ended June at $1,430.38 million, up 185.4% year over year. Total backlog of $1,970.84 million is slightly more than the $1.93 billion of revenue the company just booked over twelve months. 4
The Memphis plant, whose output is still climbing. Management's own yardstick from the call: in one quarter the new Memphis facility did roughly half of the full-year 2025 revenue that the established Redmond BASX plant did in all of last year, and most of the 15-point raise to the sales outlook is expected to come through Memphis as throughput rises. 9
Alpha Class heat pumps. Orders for the fully electric heat-pump platform rose 50% in the quarter and 54% year to date, which management frames around customer spending on electrification and efficiency. 9
AAON-brand share gains in a soft market. AAON-branded bookings rose about 16% year over year and about 45% on a two-year stack, and AAON-branded backlog rose 6.0% sequentially to $540.47 million even as the segment's revenue grew 41.7%. The 2026 plan assumes about 20% growth for the brand. 49
A backlog repriced upward. Management said the backlog converting in the second half sits at a substantially different price point from the backlog executed in the first half, and named price-cost as the biggest single driver of the margin improvement it expects from the September quarter, with the heavier part of it in the December quarter. 9
The market's own growth rate. Management put data-centre market growth at roughly 30% in both 2025 and 2026, and expects BASX to more than double again this year after growing about 140% the year before — growth above the market implies share gains rather than market drift. 9
Monitorable risks
1. The guide implies a second half far slower than the quarter just reported. On fiscal 2025 revenue of $1,442.08 million, the 55%–60% full-year guide implies $2,235 million to $2,307 million for 2026. The first half booked $1,123.92 million, which leaves $1,111 million to $1,183 million for the second half: growth of about 37% to 46% over the $808.46 million of the second half of 2025, and about level with the first half's total. Trigger: third-quarter net sales below roughly $555 million, the low end of the second-half run-rate the 55% guide allows, or any reduction of the full-year guide. Monitoring horizon: the November 5 report. 46
2. Gross margin is guided down and has not turned. The full-year gross-margin guide was cut to about 25%–26% from 27%–28%, and the June quarter printed 24.3%, down 230 basis points from the 26.6% of a year earlier. Management expects improvement to build from the September quarter, with the larger part in December. Trigger: a third-quarter gross margin below 25%, or a full-year outcome below the guided 25% floor. Monitoring horizon: each quarterly report through the annual report. 49
3. Data-centre orders turned down sequentially. BASX-branded backlog fell 11.7% from March to $1,430.38 million, and management said bookings came in below the unusually elevated levels of recent quarters while calling the pipeline the strongest it has been. Trigger: BASX-branded backlog below $1.3 billion in a second consecutive quarter, or total backlog below $1.9 billion. Monitoring horizon: the backlog table in each quarterly release. 49
4. The capacity build is being paid for with the revolver. At June 30 the company held $12.7 million of cash, cash equivalents and restricted cash against $435.0 million drawn on its revolving credit facility and $452.08 million of total debt, or 1.51 times trailing GAAP EBITDA. Trigger: a drawn revolver above $500 million, or a fiscal 2026 free cash flow outcome below the $38.83 million analysts model. Monitoring horizon: the balance sheet in each quarterly report and the annual report. 148
5. The PEG pass depends on the vendor. Finviz's 0.47 divides a 23.54-times forward multiple by a 50.11% five-year EPS growth estimate; StockAnalysis's own calculation is 1.13, past the filter. Trigger: the five-year EPS growth estimate dropping below about 24% while the forward multiple holds near 23.5 times, which would take the displayed PEG to 1.00. Monitoring horizon: the estimate on the quote page and any consensus revision after each report. 17
6. The AAON brand still leans on a soft commercial HVAC market. The 2026 plan assumes roughly 20% AAON-brand growth, and the June quarter's 39.3% came off the weak comparison described above. Trigger: AAON-branded sales growth below 20% in a quarter, or AAON-branded backlog below the $540.47 million it ended June at. Monitoring horizon: segment revenue and bookings in each quarterly release. 49
Next reporting checkpoint
The third-quarter 2026 report is the next hard test of everything above.
- Estimated report date: November 5, 2026, before market open — a vendor estimate from the company's earnings calendar; the company has not confirmed the date. 1
- Consensus for the year: revenue of $2.30 billion, up 59.4%, and adjusted EPS of $2.36, up 74.6%, from five analysts. 8
Four things to verify in that report:
- Third-quarter revenue against the guide's own arithmetic. The second half has $1,111 million to $1,183 million to produce; a September quarter at the low end of that pace keeps the 55%–60% guide in reach.
- Gross margin against the cut guide. The company expects sequential improvement from the June quarter's 24.3%, with most of it in the December quarter.
- BASX-branded backlog. Whether the sequential decline reverses, and whether bookings return to the pace of the four quarters in which management says book-to-bill approached three.
- The revolver and free cash flow. The balance drawn, capital expenditure against the $95 million to $100 million depreciation and amortisation guide for the year, and whether free cash flow turns positive. 4
Watchlist conclusion
AAON passes all four hard filters on the sources cited here: a $6.87 billion market capitalisation, 53.53% TTM revenue growth, positive TTM operating cash flow of $86.54 million, and a displayed PEG of 0.47 whose calculation the reader can now reproduce and test — with the caveat that a second vendor computes 1.13 from a different earnings base.
The business is converting data-centre demand faster than it can build the capacity to serve it, and it is paying for that with margin and cash: a gross-margin guide down 2 points, trailing free cash flow of negative $118.79 million, $435.0 million drawn on the revolver, and a Memphis plant whose overhead took $18.1 million off the Oklahoma segment's margin in one quarter. What says the demand is still there is the backlog, up 98% year over year and larger than the company's entire trailing-twelve-month revenue.
Two numbers settle the next step. Revenue needs to hold at or above a $555 million quarterly run-rate to keep the 55%–60% guide in reach, and gross margin needs to start climbing back toward the 25%–26% the company has guided to. If both arrive, the 0.47 PEG describes a company whose earnings are catching up to its capacity; if they do not, the multiple is priced ahead of them.
This article reports figures and company statements as published. It is not investment advice, and it is not a recommendation to buy or sell any security.
References
- 1StockAnalysis — AAON statistics
stockanalysis.com
- 2StockAnalysis — AAON revenue
stockanalysis.com
- 3Finviz — this week's screen
finviz.com
- 4
- 5StockAnalysis — AAON cash flow statement
stockanalysis.com
- 6StockAnalysis — AAON quarterly financials
stockanalysis.com
- 7Finviz — AAON quote
finviz.com
- 8StockAnalysis — AAON forecast
stockanalysis.com
- 9StockAnalysis — AAON Q2 2026 earnings call transcript
stockanalysis.com
- 10
- 11StockAnalysis — Vertiv statistics
stockanalysis.com
- 12StockAnalysis — Modine statistics
stockanalysis.com
- 13StockAnalysis — Lennox statistics
stockanalysis.com
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