A. O. Smith Corporation
$56.73
-0.32%A. O. Smith Corporation manufactures and markets residential and commercial gas, heat pump and electric water heaters, boilers, tanks, and water treatment products in North America, China, Europe, and India. It operates through two segments, North America and Rest of World. The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes, and small businesses; commercial boilers for hospitals, schools, hotels, and other large commercial buildings, as well as residential boilers for homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, on-the-go filtration bottles, point-of-use carbon, and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides food and beverage filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and heat pumps, electric wall-hung, gas tankless, combi-boiler, heat pump and solar water heaters. The company offers its products primarily under the A. O. Smith, State, Lochinvar, and water softener brands. It distributes its products through independent wholesale plumbing distributors, as well as through retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce, as well as other online retailers. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 14.7).
Valuation inputs: P/E 14.7, earnings yield +6.8%, momentum -0.3%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is strong (ROE +29.4%, ROIC +23.9%).
Profitability stack: net margin +14.3%, ROE +29.4%, ROIC +23.9%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceRisk profile is balanced but has notable pressure points to monitor.
Risk factors: liabilities/assets +40.9%, momentum -0.3%, net margin +14.3%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
A. O. Smith Corporation Market vs Earnings Trajectory
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A. O. Smith Corporation Fair Value Envelope
A. O. Smith Corporation Profit Bridge
Profitability Analysis
Gross Margin
Strong gross margins indicate healthy pricing and efficient production or service delivery.
Operating Margin
Healthy operating margins demonstrate effective cost control and strong business fundamentals.
Net Profit Margin
Strong net margins indicate efficient operations and favorable tax/interest management.
Effective Tax Rate
Moderate tax rate typical for most corporations. Represents standard tax burden on profits.
Profitability Insight
Room for improvement: Moderate profitability with opportunities to enhance margins through better cost management or pricing strategy.
A. O. Smith Corporation Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Strong cash conversion. Most reported earnings translate into actual cash flow, suggesting solid fundamentals.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Minimal working capital impact on FCF. Changes in operating assets and liabilities well-managed.
Cash Flow Quality Insight
Asset-light with strong cash conversion: Low capital requirements combined with efficient cash generation creates significant shareholder value through dividends, buybacks, or strategic investments.
A. O. Smith Corporation Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Strong liquidity. The company has adequate resources to meet short-term liabilities.
Debt-to-Equity Ratio
Balanced capital structure with moderate leverage. Equity exceeds debt, suggesting healthy financial stability.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Capital-intensive business with significant long-term investments in property, equipment, or intangibles.
Financial Health Insight
Strong financial foundation: Excellent liquidity combined with conservative leverage suggests the company is well-positioned to weather economic uncertainties and fund growth opportunities.
A. O. Smith Corporation Street Expectations Map
Wall Street analysts project that AOS stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 72.67, with estimates ranging from a low of 67.00 to a high of 80.00.
The consensus 1-year price target stands at 72.67, with estimates ranging from a low of 67.00 to a high of 80.00.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.
Analyst Conviction
Strong buy conviction: High upside with tight consensus suggests compelling investment opportunity backed by analyst confidence.
Market Sentiment Insight
Rare opportunity: Exceptional upside potential with strong analyst consensus creates a compelling setup. The combination of significant price target premium and tight agreement suggests high-conviction undervaluation that may attract institutional capital.
A. O. Smith Corporation Insider Positioning
During the last 12 months, insiders have sold $3.11M worth of AOS shares, with no buying activity reported.
3 Months
0
0.00
0
0.00
+0
+$0
3-6 Months
0
0.00
1.5K
110.56K
-111K
-$111K
6-9 Months
0
0.00
0
0.00
+0
+$0
9-12 Months
0
0.00
42.0K
3.00M
-3.0M
-$3.00M
Top Buyers
No buying activity
Top Sellers
Wheeler Kevin J.
Director, Officer: Executive Chairman
$1.58M
Stern James F
Officer: Exec Vp, General Counsel & Sec
$1.24M
Smith Mark D
Director
$171K
Schuh Darrell W.
Officer: Svp; President & Gm Lochinvar
$111K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $3.11M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Insider Participation
4 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
aos Dividend History
Learning Layer
Related Guides
Build conviction on AOS by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.