A. O. Smith (AOS)
Industrials · $8.8B market cap · SEC CIK 0000091142
ahead of 54% of the S&P 500 · #35 of 79 in Industrials
Next reports on Jan 27, 2027, after the close, with analysts expecting $0.86 in earnings per share.
52-week range $54.16 to $81.87. 21% below its 52-week high and 19% above its low.
The case for AOS
- Earns 27% back on shareholder equity.
- Holds more cash ($175M) than long-term debt ($113M).
- Pays a modest 1.7% dividend.
- P/E of 17.7× is lower than 90% of Industrials companies.
- Free-cash-flow yield of 6.2% is higher than 86% of Industrials companies.
The case against
- Revenue was flat on the year (−0.7%).
- Its weakest area is growth (35/100): revenue −0.7%, EPS −3.4%, +5.8% a year over five years.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 65 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 35 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 65 |
| Momentumhow the price has behaved lately | 44 |
| Stabilityhow violently it moves, what it owes and what it pays you | 82 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? No, flat
| Last 12 months | −0.7% |
|---|---|
| Over 5 years | +5.8% a year |
| FY2025 revenue | $3.8B (0%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $546M |
|---|---|
| Of revenue | 14% |
| Of profit | 100% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | 39% |
|---|---|
| Operating margin | 17% |
| Net margin, FY24 → FY25 → now | 14.0% → 14.3% → 13.0% |
Debt vs. cash
Is the balance sheet healthy? Yes, more cash than debt
| Cash | $175M |
|---|---|
| Long-term debt | $113M |
| Net cash | $61.8M |
| Years to repay | 0.2 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 17.7× |
|---|---|
| Fair P/E for its growth | 19× |
| P/FCF | 16.0× |
| Forward P/E | 16.4× |
| EV / EBITDA | 12.5× |
At 17.7× earnings it trades close to the 19× that 6% a year of growth plus a 1.7% dividend would justify. At 16.0× free cash flow it trades below that same mark.
The financials, five years deep
Pulled from A. O. Smith's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $3.8B | $3.8B | $3.9B | $3.8B | $3.5B |
| Change on the year | 0% | −1% | +3% | +6% | — |
| Free cash flow | |||||
| Free cash flow | $546M | $474M | $598M | $321M | $566M |
| Of revenue | 14% | 12% | 16% | 9% | 16% |
| Profit margins | |||||
| Gross margin | 38.8% | 38.1% | 38.5% | 35.4% | 37.0% |
| Operating margin | 19.0% | 18.5% | 19.3% | 9.6% | 19.3% |
| Net margin | 14.3% | 14.0% | 14.4% | 6.3% | 13.8% |
| Debt vs. cash | |||||
| Cash | $175M | $240M | $340M | $391M | $443M |
| Long-term debt | $113M | $183M | $117M | $335M | $190M |
| Net cash (debt) | $61.8M | $56.4M | $223M | $56.7M | $253M |
Filings
The text of this 10-K could not be read automatically. The original is linked below.