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AAON, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: ConstructionSector: Industrials

Fair Value Summary

Current Price$76.87
5Y Range-7.09 – -6.12
5Y Selected-6.60
(-) Safety Margin72.34%
5Y Buy Price$-1.83
Upside (to Buy Price)-102.38%
10Y Range1.33 – 5.87
10Y Selected3.60
(-) Safety Margin72.34%
10Y Buy Price$1.00
Upside (to Buy Price)-98.71%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9203
Revenue R2 (10Y)0.7967
Net Income R2 (5Y)0.7757
Net Income R2 (10Y)0.6914
EBITDA R2 (5Y)0.8285
EBITDA R2 (10Y)0.6814
FCF R2 (5Y)0.1734
FCF R2 (10Y)0.0448
Safety Score0.2766

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth20.67%18.81%16.96%15.11%13.26%11.41%9.56%7.70%5.85%4.00%
Revenue1,448.751,721.322,013.292,317.502,624.772,924.173,203.583,450.363,652.273,798.36
EBITDA236.70281.24328.94378.64428.84477.76523.41563.73596.72620.59
D&A-49.82-59.20-69.24-79.70-90.27-100.57-110.18-118.66-125.61-130.63
EBIT186.88222.04259.70298.94338.58377.20413.24445.07471.12489.96
Pro forma Taxes-41.87-49.75-58.19-66.98-75.86-84.51-92.59-99.72-105.56-109.78
NOPAT145.01172.29201.51231.96262.71292.68320.65345.35365.56380.18
Capital Expenditures-146.03-173.50-202.93-233.59-264.56-294.74-322.90-347.78-368.13-382.85
NWC Investment-81.92-89.99-96.40-100.44-101.45-98.85-92.25-81.48-66.66-48.23
(+) D&A49.8259.2069.2479.7090.27100.57110.18118.66125.61130.63
Free Cash Flow-33.11-32.00-28.57-22.37-13.02-0.3415.6734.7656.3879.73
Diluted Shares Outstanding83,208,946.7583,208,946.7583,208,946.7583,208,946.7583,208,946.7583,208,946.7583,208,946.7583,208,946.7583,208,946.7583,208,946.75

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.40%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF-32.82-30.74-25.16-18.05-9.63-0.239.7419.8029.4438.17
Raw: -199.04
-140.99
Raw: 1,218.56
558.48

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-257.40538.99
(-) Net Debt283.16283.16
Equity Value-540.57255.83
(/) Shares Out83.2183.21
Fair Value$-6.50$3.07
(-) Safety Margin72.34%72.34%
Buy Price$-1.80$0.85
Current Price$76.87$76.87
Upside (to Buy Price)-102.34%-98.89%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.90%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF-32.79-30.62-24.83-17.65-9.34-0.229.2718.6727.5135.33
Raw: -161.83
-110.56
Raw: 990.78
418.44

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-225.79393.77
(-) Net Debt283.16283.16
Equity Value-508.95110.61
(/) Shares Out83.2183.21
Fair Value$-6.12$1.33
(-) Safety Margin72.34%72.34%
Buy Price$-1.69$0.37
Current Price$76.87$76.87
Upside (to Buy Price)-102.20%-99.52%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.90%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF-32.85-30.87-25.50-18.47-9.95-0.2410.2521.0231.5441.26
Raw: -257.71
-189.32
Raw: 1,577.76
785.30

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-306.97771.48
(-) Net Debt283.16283.16
Equity Value-590.13488.31
(/) Shares Out83.2183.21
Fair Value$-7.09$5.87
(-) Safety Margin72.34%72.34%
Buy Price$-1.96$1.62
Current Price$76.87$76.87
Upside (to Buy Price)-102.55%-97.89%

Reverse DCF: Market Implied Growth

Current Price$76.87
WACC Used9.1%
IMPLIED REVENUE GROWTH144.31%
Metric2027202820292030203120322033203420352036
Implied Revenue3,214.117,852.4319,184.4046,869.69114,508.05279,756.37683,477.051,669,813.194,079,546.049,966,801.07
Constant Implied Growth144.31%144.31%144.31%144.31%144.31%144.31%144.31%144.31%144.31%144.31%
Implied Free Cash Flow0.320.791.924.6911.4527.9868.35166.98407.95996.68
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.300.631.423.187.1215.9435.7079.94179.00400.86

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$32.9423.64%$31.18-5.33%
20182018-12-31$23.3722.78%$8.57-63.33%
20172017-12-31$24.4715.43%$6.16-74.81%
20162016-12-31$22.037.59%$10.04-54.42%
20152015-12-31$15.487.97%$8.40-45.72%
20142014-12-31$14.937.62%$14.20-4.88%
20132013-12-31$14.20-1.90%$7.60-46.51%
20122012-12-31$6.182.36%$11.2582.00%
20112011-12-31$6.07-1.46%$-3.71-161.16%
20102010-12-31$5.57-8.16%$4.09-26.55%
20092009-12-31$3.85-6.06%$7.4292.85%
20082008-12-31$4.12-3.35%$3.44-16.51%
20072007-12-31$3.9216.43%$6.4965.49%
20062006-12-31$3.4626.18%$1.16-66.56%
20052005-12-31$2.3515.27%$0.56-76.00%
20042004-12-31$2.1213.55%$-0.22-110.55%
20032003-12-31$2.5614.21%$3.7646.91%
20022002-12-31$2.4310.72%$5.67133.37%
20012001-12-31$2.157.76%$3.1647.08%
20002000-12-31$1.041.92%$0.60-41.99%
19991999-12-31$0.84-0.96%$0.65-23.25%
19981998-12-31$0.5512.59%$0.13-77.02%
19971997-12-31$0.4419.28%$-1.49-435.65%
19961996-12-31$0.2922.70%$0.99245.49%
19951995-12-31$0.3423.52%$0.12-63.52%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$3.46
Median
$3.07
10th Percentile
$1.33
90th Percentile
$6.04

Fair Value Distribution

$-0.31 - $0.39
14
$0.39 - $1.08
62
$1.08 - $1.78
97
$1.78 - $2.48
173
$2.48 - $3.18
178
$3.18 - $3.87
142
$3.87 - $4.57
104
$4.57 - $5.27
69
$5.27 - $5.97
58
$5.97 - $6.67
29
$6.67 - $7.36
32
$7.36 - $8.06
16
$8.06 - $8.76
7
$8.76 - $9.46
4
$9.46 - $10.16
4
$10.16 - $10.85
3
$10.85 - $11.55
0
$11.55 - $12.25
2
$12.25 - $12.95
5
$12.95 - $13.64
0