AAON, Inc. (NASDAQ: AAON) — A Better Price, the Same Unproven Conversion

Update date: August 9, 2026 · Price: $94.83 (August 7 close) · CIK: 0000824142 Sector: Industrials · Building Products · Commercial HVAC and Data-Center Thermal Management Cutoff: This report precedes AAON’s Q2 release scheduled for August 10, 2026 after market close.

The institutional analysis below is position-free and contains no price target. The only subjective position is the clearly separated Claude’s Take.

⚡ Claude’s Take

The author’s subjective opinion; not investment advice. The analytical body below carries no recommendation.

HOLD / WATCH THE PRINT — the 28% de-rate has repaired much of the price risk, but not the evidence gap. At $94.83, AAON is inside the prior report’s $85–$100 directional value zone; I would require either a post-earnings price below roughly $85 or proof of at least 28% consolidated gross margin with positive all-in free cash flow before accumulating. This is a quality-compounder-at-a-price setup complicated by a capital-cycle boom and an earnings release one day beyond the cutoff. The stock has fallen 28.2% since June 8 and 36.9% from its June high, yet still trades at roughly 29x the prior report’s next-year EPS reference and around 39x a reasonable 2026 earnings estimate. The cheaper quote removes the June report’s worst asymmetry; it does not make 25% gross margin, negative all-in FCF, 9% ROIC, and a debt-funded capacity ramp disappear.

The business remains two unequal franchises. Legacy AAON commercial HVAC has real specification, search, and replacement switching costs. BASX has extraordinary demand and a $1.62B backlog, but has not demonstrated customer captivity or a cost advantage, and its approximately 24% gross margin is structurally below the historical legacy franchise. The Q1 signal was therefore mixed in exactly the wrong way: sales rose 54.3%, but consolidated gross margin fell to 25.1%; operating cash flow improved, but all-in FCF remained negative $18.9M and revolver debt increased. The factor tape is no longer a one-way momentum trade: price is below its 50- and 200-day averages, the raw three-month return is negative 32%, and idiosyncratic volatility is 53%. That argues for patience through the near-term binary event, not blind contrarianism.

Conviction: Medium-low. Bullish flip: two quarters at or above 28% gross margin while BASX mix holds or rises, accompanied by positive all-in FCF and falling net debt. Bearish flip: Q2 margin remains near 25%, backlog or a major customer visibly defers, or working capital forces another material debt increase. Tag: The multiple reset arrived before the operating proof.

📈 Stock Price Action — Five-Year Event Map

AAON’s split-adjusted price moved from a five-year low near $31 in May 2022 to a $150.36 intraday high on June 3, 2026, then closed at $94.83 on August 7. The trailing 52-week range is $61.74–$150.36; the stock is 36.9% below the high, 13.1% below its 50-day EMA, and 8.5% below its 200-day EMA. Price moves are facts from the AZI price history; event attribution is interpretation cross-checked to company releases.

The early cycles were mostly about whether pricing and manufacturing could preserve the premium legacy margin. The 2024 liquid-cooling award changed the marginal narrative to AI infrastructure; the 2025 drawdown then exposed the operational cost of that pivot. Q1 2026 restored confidence in volume and backlog but simultaneously cut the full-year gross-margin expectation to 27%–28%, from 29%–31%. The June–August unwind occurred without a new operating print: AAON announced the Q2 call on July 23 and added two directors on July 28, but Q2 itself remains unknown. The clean description is a broken short-term momentum trade awaiting company-specific evidence, not a chart-based conclusion.

1. Executive Summary

AAON designs and manufactures highly configurable commercial HVAC equipment under the AAON brand and custom data-center/cleanroom thermal systems under BASX. The company historically earned premium economics in semi-custom rooftop units through engineer specification, a strong independent-representative channel, product configurability, and replacement friction. Since acquiring BASX in December 2021, it has redirected capital and management attention toward data-center cooling. That pivot produced exceptional sales and backlog growth, but also lower gross margins, higher customer and project concentration, more over-time revenue recognition, a major working-capital build, and a nearly sixfold expansion of the BASX production footprint.

The update is less dramatic than the price chart suggests because no new quarter has been reported since the June memo. Q2 results are scheduled one day after this report. Q1 remains the latest operating evidence: revenue rose 54.3% to $496.9M, AAON-branded sales rose 41.6% and BASX-branded sales rose 72.4%. Total backlog reached $2.129B, including $1.620B of BASX backlog. Yet consolidated gross margin declined 170bp to 25.1%, BASX gross margin was 23.9%, AAON Coil Products fell to 24.1%, and operating margin was only 11.5%. Management raised the full-year revenue-growth guide to 40%–45% but reduced gross-margin guidance to 27%–28%, explicitly trading near-term economics for faster outsourced production and capacity ramp.

Cash quality also remains unresolved. Q1 operating cash flow improved to $34.0M, but inventory and contract assets grew by $104.1M combined. Conventional FCF was negative $11.1M; after capitalized intangibles, all-in FCF was negative $18.9M. Unrestricted cash remained $13,000, revolver debt increased to $425.2M, and available revolver capacity fell to $173.5M. This is adequate liquidity, not financial distress, but it is not self-funded compounding. Company-defined ROIC fell from 24.2% in 2023 to 9.1% in 2025 and 9.3% TTM while invested capital reached $1.437B.

The moat verdict is unchanged but more precise. The legacy franchise has a narrow demand advantage: engineering/search costs, installed-base replacement friction, and rep relationships support premium pricing. It is not a national scale moat, network effect, or patent franchise. BASX has engineering competence and a growing installed reference base, but no demonstrated captivity or cost advantage against Vertiv, Modine, Munters, Johnson Controls/Silent-Aire, Schneider and other expanding suppliers. Under Greenwald, AAON is a narrow legacy franchise blended with a faster-growing competitive project business. Under Marathon, data-center cooling is in a boom/lag phase: demand is strong, but suppliers are simultaneously expanding capacity, which raises the probability that future returns disappoint even if demand forecasts prove broadly correct.

The price change matters. AAON closed at $94.83, down 28.2% from the June report and 36.9% from the high. On approximately 81.9M shares and about $440M of net debt/credit obligations, live enterprise value is roughly $8.2B. The stock no longer requires the extreme outcome embedded at $132, but still requires material earnings growth and margin normalization. A scenario range around the current price is broad because modest changes in mature margin and terminal multiple dominate: the market is paying for BASX growth to convert into mid-teens operating economics before the capital cycle becomes hostile. The lower quote improves prospective asymmetry; it does not convert an unproven earnings bridge into a fact.

Update verdict: demand is stronger than the old bear narrative, economics remain weaker than the old bull narrative, and valuation is now materially less punitive. The single most informative next disclosure is Q2 gross margin and FCF, followed by backlog quality and debt. Until those are known, the thesis is not resolved—only repriced.

Changes Since June 8, 2026

The most important correction is methodological: the prior memo treated a 29%–31% gross-margin guide as current, although management had already cut it to 27%–28% on May 7 while raising sales expectations. The new report uses the correct guide. The old bullish test—two quarters above roughly 28%–29% with positive all-in FCF—remains useful and demanding. The prior 31% threshold should be read as strong refutation evidence, not a neutral forecast hurdle.

2. Business Overview

AAON is an equipment manufacturer, not a recurring-revenue business. It sells rooftop units, air handlers, coils, controls, heat pumps, chillers, coolant-distribution units and other thermal systems. Revenue is recognized primarily at sale for legacy equipment and over time for a meaningful portion of BASX custom projects. Aftermarket parts were only $80.2M in FY2025, about 5.6% of revenue, so the replacement cycle is economically recurring but not contractually recurring.

The legal reporting segments are AAON Oklahoma, AAON Coil Products and BASX, while the economically cleaner split is by brand. In FY2025, AAON-branded sales were $894.3M and BASX-branded sales $547.8M. In Q1 2026, AAON brand generated $268.4M and BASX $228.6M; BASX was 46% of quarterly sales and 76% of backlog. The company is therefore approaching a point where the acquired growth platform, not the historical moat, determines consolidated economics.

Legacy AAON’s proposition is highly configurable commercial HVAC delivered through independent manufacturer representatives. The customer buys total cost of ownership, energy efficiency, application fit, reliability and replacement compatibility, not merely the cheapest box. The Norman Asbjornson Innovation Center supports testing and specification credibility. Those features create search and switching costs, particularly when an engineer, owner and rep have standardized around an existing footprint.

BASX sells engineered air- and liquid-cooling systems for data centers and cleanrooms. The product set includes custom air handlers, coolant-distribution units and free-cooling chillers. Orders are larger, procurement is longer, scheduling is less predictable, and the filing warns that data-center orders can be shifted, cancelled and reissued. The business is also more customer-concentrated and working-capital-intensive. The strategic logic is clear—AAON transferred custom-engineering capabilities into a fast-growing adjacent thermal market—but the economic proof is incomplete.

Verdict: AAON is understandable but no longer simple. It has a durable niche HVAC franchise and a fast-growing data-center project business whose economics are not yet proven. The mix shift raises growth and lowers near-term quality.

3. Industry Dynamics

Commercial HVAC has three different profit pools. First, replacement-driven rooftop and packaged equipment benefits from a large installed base, specification familiarity, and failure-driven demand. Second, applied systems and controls reward engineering depth, integration and service. Third, data-center thermal management is a new-build infrastructure market with exceptional current growth but unusually active supply response. Treating these pools as one market hides the central AAON risk.

Legacy commercial HVAC is structurally attractive for a specialist but not protected from large competitors. Trane, Carrier, Lennox, Johnson Controls and Daikin bring scale, broad portfolios, captive or dense distribution, service capacity and balance-sheet resources. AAON wins in configurable niches and rep-led local markets rather than through national cost leadership. DOE efficiency standards support replacement and product upgrading; refrigerant rules force redesign and channel transitions. The EPA’s May 2026 relief applies to specified residential and light-commercial pre-2025 inventory and should not be extrapolated across AAON’s entire portfolio. DOE’s 2029 unitary standards remain a longer-term efficiency catalyst.

Data-center cooling is attractive on demand and unfavorable on supply. AAON’s $1.62B BASX backlog proves market pull. Yet Vertiv, Modine, Munters, Johnson Controls, Schneider and others are expanding capacity or product breadth. Modine’s latest data-center sales growth of roughly 90% alongside a 960bp gross-margin decline to 20.2% is a useful warning: excellent demand can coexist with poor incremental economics during a ramp. AAON’s own Q1 showed the same pattern at smaller scale—BASX sales up 104.5% at the segment level while its 23.9% gross margin was essentially flat.

Marathon’s capital-cycle framework therefore matters more than a TAM estimate. High returns and AI spending have attracted capital across the thermal value chain. Capacity arrives with lags, so near-term orders can stay strong even as future industry returns deteriorate. AAON has expanded its BASX footprint nearly sixfold since 2024; Redmond was around 90% utilized, Longview around 60% with two to three years of optimization ahead, and Memphis around 20% with a three- to five-year ramp. Competitors are making analogous decisions against the same demand forecast. The key forecastable variable is supply, not whether data-center compute demand will grow.

Industry regulation is both a tailwind and a cost. Refrigerant and efficiency standards accelerate replacement and reward engineering capability, but transitions also create component shortages, redesign expense, obsolete inventory and channel timing distortions. AAON’s 2024–2025 A2L experience demonstrated that regulation is not a free demand subsidy; execution determines whether the manufacturer captures the benefit.

Verdict: legacy commercial HVAC is an above-average niche industry where specification and replacement protect returns. Data-center thermal is a high-growth but worsening capital-cycle industry. AAON is migrating from the former toward the latter, so stronger demand does not automatically imply stronger returns.

4. Competitive Position

In Greenwald’s taxonomy, AAON’s defensible advantage is demand-side captivity in legacy equipment. Search costs arise because commercial systems are complex and consequential. Switching costs arise from specifications, curbs, controls, service knowledge and rep relationships. The configure-to-order process historically supported premium gross margins and a faster response than mass-market competitors. The financial fingerprint was visible in 2023: 34.1% gross margin, 19.5% operating margin and company-defined ROIC above 24%.

The advantage is narrow. AAON lacks a network effect. Patents are not individually material. It is far smaller than the global majors and cannot claim national purchasing or R&D scale as a barrier. Its independent representatives deepen local relationships but also own them; the 10-K explicitly warns that better-capitalized competitors can target those reps. Customer captivity can therefore leave with the intermediary.

BASX does not yet pass the moat test. The engineering is credible and repeat orders may build reputation, but the observable financial outcome is a roughly 24% gross margin, high working-capital use, customer concentration and cancellable project backlog. Sophisticated buyers can specify systems and negotiate across suppliers. No stable market-share series or sustained excess ROIC is available. A backlog is evidence of demand, not a barrier to entry.

The overall ROIC test has deteriorated. Company-defined ROIC moved from 24.2% in 2023 to 18.6% in 2024, 9.1% in 2025 and 9.3% TTM. Invested capital rose from $805.7M to $1.437B over the same broad period. If the moat were broadening with scale, returns should be stable or improving. They are not. Execution issues explain part of the decline, but mix and asset intensity explain enough that the old peak should not be assumed as normal.

The strongest disconfirming evidence is the Q1 AAON-brand rebound: sales increased 41.6% and management described pricing discipline and share gains. That argues against a simple story of a dying legacy franchise. But the comparison was depressed by the refrigerant transition, and TTM AAON-brand revenue of $973.1M remains below 2023’s $1.002B. Q2 and Q3 are required to separate genuine share gain from base effects and backlog catch-up.

Verdict: AAON has a weak-to-narrow overall advantage: real demand-side captivity in legacy commercial HVAC, no proven scale or network moat, and no demonstrated moat in BASX. The company is deliberately shifting its mix toward the least-proven portion of its franchise.

5. Growth History and Forward Opportunities

Revenue grew from $534.5M in 2021 to $1.442B in 2025, a 28% CAGR, but the composition changed. The early increase combined inflationary price realization and a full year of BASX; the recent increase is overwhelmingly data-center driven. FY2025 AAON-brand revenue fell 8.3%, while BASX-brand revenue grew 143.5%. Q1 2026 then produced a broad rebound, with AAON brand up 41.6% and BASX up 72.4%.

The current guide calls for 40%–45% 2026 sales growth, implying roughly $2.02B–$2.09B of revenue, and management has indicated around $1B could come from BASX. This is much stronger than the original 18%–20% guide. The quality caveat is equally important: management reduced gross-margin guidance by 200–300bp to 27%–28% because outsourced production and ramp costs accompany the extra volume. High-quality growth would expand profit and cash faster than capital. AAON is currently expanding volume faster than gross profit quality.

Backlog provides real visibility but imperfect economics. At March 31, total backlog was $2.129B, up 107.4%; BASX backlog was $1.620B, up 160%; AAON-brand backlog was $509.8M, up 26.2% year over year but down 3.1% sequentially as production exceeded orders. Most BASX projects extend across phases, and timing can shift. The backlog-to-revenue ratio is extraordinary, but a project backlog is not equivalent to contracted recurring revenue or guaranteed margin.

The best growth opportunities are utilization, liquid cooling, national accounts and aftermarket. Utilization is potentially the highest-return opportunity because much of the physical capacity has already been installed. Liquid cooling broadens the addressable market but intensifies competition. National-account wins can support AAON brand volume but may increase buyer bargaining power. Aftermarket is higher-quality and recurring but too small to determine the current thesis.

Verdict: growth is high in magnitude but mixed in quality. The opportunity is real; the returns depend on converting backlog through underutilized assets without permanent outsourcing, pricing or working-capital leakage.

6. Financial Quality

Income statement and segment economics

The surface Q1 result was excellent: revenue increased $174.9M and operating income increased $19.3M. SG&A fell 220bp as a percentage of sales to 13.7%, showing that central costs can leverage. But gross profit is the better test of manufacturing economics. Gross margin fell despite the 54% volume increase, and management’s full-year guide remains below the old peak by 600–700bp.

Segment data show why. AAON Oklahoma generated $244.0M of sales at 26.3% gross margin, improving from 25.1% but still burdened by $9.8M of Memphis overhead. AAON Coil Products generated $117.6M at 24.1%, down from 31.8%. BASX generated $135.4M at 23.9%, essentially flat. The fastest-growing businesses have not yet demonstrated gross-margin leverage. Management attributes much of this to temporary outsourcing, utilization and price/cost timing. That is plausible; it is also precisely the hypothesis Q2 must test.

Cash flow and working capital

Q1 OCF improved to $34.0M from negative $9.2M. Receivables fell $24.2M and accounts payable rose roughly $49.7M, providing cash. Against that, inventory increased $52.1M, net contract assets increased $51.3M to $298.4M, and contract liabilities fell $25.4M. Inventory plus contract assets absorbed $104.1M. The working-capital burden is therefore not released; suppliers partly financed its continued expansion.

Cash PP&E investment was $45.1M and acquired intangibles $7.8M. Conventional FCF was negative $11.1M; all-in FCF was negative $18.9M. The distinction matters because capitalized intangibles are genuine cash reinvestment. Management’s earnings release groups both items as $52.9M of capital expenditures. Any valuation based on FCF should use the all-in series or clearly state the narrower definition.

Balance sheet, liquidity and returns

AAON had only $13,000 of unrestricted cash at March 31. Revolver debt was $425.2M and NMTC obligations $16.3M. Availability was $173.5M and leverage 1.71x against a 3.0x covenant. The current ratio was 2.62x, but 95.5% of current assets were receivables, inventory and contract assets. Liquidity is sufficient if projects convert; it is exposed to working-capital execution if they do not.

Invested capital is the quality-of-earnings summary. It grew to $1.437B while TTM ROIC remained 9.3%. In 2025, all-in capex was $204.9M versus $79.2M of D&A, a 2.59x ratio. Q1 was similar at 2.53x. A business with a broadening moat should earn rising returns as fixed assets fill; AAON is still at the opposite end of that journey.

SBC was $7.7M in Q1, up 91%, equal to 1.55% of revenue and 19.3% of net income. Shares outstanding rose 0.62% year over year. There were no open-market repurchases in Q1. The dilution is manageable, but a buyback authorization does not create value until used without increasing financial strain.

Verdict: financial quality is mixed-to-weak at the current point in the ramp. Revenue and SG&A leverage are strong; gross-margin leverage, cash conversion and ROIC are not. Economics have not yet improved with scale.

7. Capital Allocation

The December 2021 BASX acquisition was strategically prescient. AAON paid about $100M cash plus contingent stock and acquired the platform now driving most growth. The question is not whether BASX increased revenue; it clearly did. The question is whether acquisition price plus subsequent plant, equipment and working capital will earn returns above the cost of capital.

Management has chosen a growth-first allocation. The BASX footprint has expanded nearly sixfold since 2024. Capex plus R&D consumed 18.2% of sales in 2025, after 21.7% in 2024. Redmond is near full, but Longview and Memphis have multi-year utilization ramps. These assets could create powerful operating leverage if the backlog converts. They could also become underutilized capital if industry supply catches demand or customer programs shift.

The financing mix has become more aggressive. FY2025 OCF was essentially zero, Q1 all-in FCF remained negative, and revolver debt rose. The April 2026 NMTC transaction provided $12.9M of net proceeds and potential low-cost debt forgiveness for Memphis, a sensible subsidy capture. It improves financing economics without changing the underlying requirement that Memphis earn an adequate return.

Returns of capital are secondary. Q1 included $8.1M of dividends and $3.2M of LTIP-related withholding/repurchase activity, but no discretionary open-market repurchase. The company had approximately $70M remaining on its authorization. In the June-to-August update window there were no new Form 4 transactions. Historical insider selling near the June high remains context, not new evidence.

Incentives remain imperfect. The annual cash plan emphasizes operating profit and net sales, not ROIC, FCF or per-share value. Relative-TSR awards and ownership guidelines provide counterweights, but the incentive architecture still encourages size and budget growth. The July board additions are directionally useful: Robert Buttermore brings supply-chain/manufacturing experience and Patrick Jermain brings CFO and capital-allocation experience. Both filed initial Forms 3 showing no beneficial ownership, so their alignment must develop through future holdings and oversight.

Verdict: capital allocation is strategically coherent but economically unproven. BASX was a good market call; the expanded asset base has not yet produced good returns. Under Marathon, AAON is in the asset-growth lag phase, where realized ROIC and cash—not backlog—must carry the verdict.

8. Changes and Headwinds — Last Two Years

The defining operational changes remain the A2L refrigerant transition, Longview ERP disruption, Memphis startup, CEO/CFO transition and BASX capacity build. Q1 showed that throughput can rebound, but not yet that margin and cash can normalize. The new update-window events are limited because Q2 is pending.

On July 28, the board expanded from nine to eleven members and appointed Buttermore and Jermain. Their skills map directly onto the company’s bottlenecks: sourcing, production, finance, risk and capital allocation. This is a positive governance input, but it cannot be credited as operating improvement before results.

A new legal risk deserves monitoring. AAON, AAON Coil Products and BASX have been named in consolidated putative class actions alleging HVAC price fixing. Allegations are unproven, no loss range is available, and the economic materiality cannot be determined at the cutoff. The appropriate treatment is an open contingency, not an asserted liability. The Q2 10-Q should be checked for disclosure, insurance and any estimable range.

The regulatory environment shifted modestly when the EPA removed an installation deadline for specified pre-2025 high-GWP residential and light-commercial inventory. This may ease channel disruption in affected categories, but it does not reverse the broad efficiency and refrigerant transition or apply cleanly to AAON’s full commercial portfolio.

No new acquisition, equity raise, major debt amendment or Form 4 occurred after June 8. The July 23 announcement scheduled Q2 for August 10; it contained no operating result. Thus the dramatic share-price move is not matched by a new AAON financial disclosure.

Verdict: the last two years strengthened demand visibility and weakened evidence of durable returns. The update window adds governance expertise and a litigation watch item, but leaves the central operating question unanswered.

9. Risk Analysis

The risks are correlated. A project delay reduces revenue, delays fixed-cost absorption, increases contract assets or inventory, weakens FCF, consumes revolver availability, and compresses the multiple. Conversely, clean execution improves all of those variables together. This operating convexity is why the near-term earnings print matters more than a small change in TAM assumptions.

10. Valuation Discussion — Embedded Expectations

Live bridge and current multiples

The August 7 close of $94.83 multiplied by 81.912M filed shares gives equity value of $7.768B. Adding approximately $440.4M of net revolver/NMTC obligations gives EV of about $8.208B. Q2 could change debt, cash and share count, so the bridge should be rebuilt after the print.

Forward figures are consensus estimates, not company guidance or facts. Their shape exposes the assumption: EBITDA margin must rise from about 15% TTM to 20% in 2027 while FCF swings from negative to $182M. The stock is not inexpensive on current earnings; it becomes more conventional only after two unreported years of growth and conversion.

Relative valuation tells the same story. AAON’s FY2026E P/E is near Vertiv’s, although Vertiv guides to materially higher adjusted operating margin and FCF and has a stronger balance sheet. AAON trades above Trane on P/E and near Trane on EV/EBITDA despite weaker mature economics, and above Modine and Lennox. Faster expected revenue growth explains some premium; it does not prove the premium should persist.

Embedded expectations and strategic value

At a static 25x–30x capitalization, today’s equity value requires roughly $311M–$259M of sustainable net income, already above FY2026 consensus. To earn a 10% annual return over five years, terminal equity value would need to reach roughly $12.5B. At 25x–30x, that requires approximately $500M–$417M of terminal net income. Depending on net margin, the corresponding revenue requirement is roughly $2.8B–$4.2B.

The Greenwald diagnostic is harsher. Book equity is about $934M, company-defined invested capital $1.437B, and EV $8.208B. Even a generous 1.5x–2.0x reproduction factor yields only $2.2B–$2.9B. A no-growth EPV based on FY2026 estimated EBIT is around $2.0B–$2.1B at a 9.5%–10% required return. More than $5B of EV is therefore franchise and growth value. That gap is defensible only if the enlarged assets regain returns well above the current 9%.

Scenario architecture

These are analytical outcomes, not targets. In the base case, each 100bp of EBIT margin is roughly $33M of EBIT; each turn of terminal EBITDA is about $660M of enterprise value. Margin and terminal quality matter more than small share-count differences.

The de-rate removed about $3.05B of enterprise value and reduced FY2026E P/E from approximately 57.7x to 41.5x. It fixed much of the June multiple extremity. It did not raise margin, convert FCF, lower debt, diversify customers or improve ROIC.

Verdict: current valuation is no longer absurd relative to the growth opportunity, but it still prices a substantial conversion of backlog into margin, cash and excess returns. The market may be right on demand and wrong on the ease of conversion.

11. Variant Perception

The consensus view is that AAON has scarce data-center cooling capacity, a record backlog, and a largely self-inflicted 2025 margin trough. Underutilized Memphis and Longview assets should create operating leverage, while the legacy business normalizes after A2L disruption. The 28% de-rate makes that thesis easier to underwrite.

The strongest bull case is not merely higher data-center revenue. It is that recent capex has already created more than $2B of BASX capacity, outsourcing fades, utilization rises, consolidated gross margin reaches the high 20s and then low 30s, and working capital releases. If so, consensus FY2027 EBITDA and FCF may be achievable, and current multiples compress through earnings rather than price.

The strongest bear case is not that AI demand disappears. It is that every supplier invests against the same demand; project buyers retain bargaining power; BASX and Coil remain near 24% gross margin; working capital and capex stay high; and ROIC remains near the cost of capital. In that world, revenue grows but value does not compound at the rate implied by the premium.

Factor data show that the stock is partly an industrial/infrastructure security. The All-Factors model gives Market beta 1.43, Industrials 0.95, Infrastructure 0.55, Momentum 0.33 and Low Volatility negative 0.63; Quality and Growth are zeroed. R-squared is 0.422, while specific volatility is 53.1%, leaving most variation idiosyncratic. The raw three-month return is negative 32%, but 12-month and YTD returns remain positive. Short interest around 5.9% of float is moderate, based on secondary data. This is neither a crowded squeeze nor a clean long-horizon falling knife.

Verdict: the market has repriced expectations before receiving new operating evidence. The variant is no longer “great business at any price”; it is whether a now-reasonable-looking 2027 multiple rests on unreasonable conversion assumptions.

12. Fact vs. Interpretation

13. Open Questions

1. Does Q2 consolidated gross margin clear 28%, and which segment creates the change?
2. Do inventory and contract assets stop growing faster than sales, allowing positive all-in FCF?
3. Does revolver debt decline, and how much covenant headroom remains after Q2?
4. How much of the $2.129B backlog is tied to the top three customers, and what portion is cancellable or subject to re-timing?
5. What incremental equipment and working capital are required to reach the claimed $2B-plus BASX capacity?
6. What are facility-level ROIC and payback expectations for Memphis and Longview?
7. Is the AAON-brand rebound durable after the easy A2L comparison?
8. Will management introduce explicit ROIC, FCF or per-share compensation hurdles?
9. Does the Q2 filing disclose the HVAC antitrust cases, insurance coverage or a loss range?
10. Can BASX build customer captivity through qualification and installed references, or will its buyers retain project-by-project bargaining power?

14. What Must Be True

Bull case

The backlog must convert without material cancellation; BASX mix must rise while consolidated gross margin reaches at least 28% for two consecutive quarters; all-in FCF must turn positive; revolver debt must stabilize or fall; and company-defined ROIC must begin moving above the cost of capital. The legacy AAON brand must also sustain positive growth beyond an easy comparison.

Falsification test: if two consecutive reported quarters fail to reach 28% gross margin while BASX remains the growth engine, or if positive earnings continue to coincide with negative all-in FCF and rising debt, the high-quality conversion thesis is falsified.

Bear case

The bearish thesis requires roughly 24%–27% growth-segment gross margins to be structural, working capital to remain permanently heavier, competitive capacity to limit pricing, and the legacy moat to become a smaller share of earnings. The current price still must fail to compensate for those ordinary industrial economics.

Falsification test: if AAON reaches at least 30% consolidated gross margin with BASX at or above half of sales, generates FCF close to net income, reduces net debt, and lifts ROIC into the mid-teens without a mix reversal, the structural-dilution bear case is falsified.

Decision dashboard for the next print

The next-quarter review should proceed in a fixed order. First, reconcile reported revenue by brand and segment to backlog conversion; volume without order replenishment is harvesting, not compounding. Second, bridge gross margin from Q1’s 25.1% to the new result, separating mix, price/cost, outsourcing, Memphis under-absorption and Coil productivity. Third, rebuild cash conversion from net income through receivables, contract assets, inventory, payables and contract liabilities, then deduct both PP&E and capitalized intangibles. Fourth, update revolver availability and covenant leverage. Fifth, compare new orders with shipments and identify any customer deferral. Only then should valuation be re-keyed.

The minimum constructive combination is not an EPS beat in isolation. It is gross margin at or above 28%, positive all-in FCF, stable or lower net debt, and backlog that remains healthy without a new concentration surprise. A revenue beat paired with 25% margin and another debt increase would reinforce the low-quality-growth interpretation. Conversely, a modest revenue result with strong margin, cash and order quality would carry more information about sustainable value. This ordering prevents the AI-demand headline from overwhelming the variables that determine returns on capital.

15. Source Note

The analysis is grounded in AAON’s FY2025 10-K, Q1 2026 10-Q, June 2026 SEC-furnished presentation, July board 8-K, ownership filings, the five-year SEC corpus, company releases, current peer releases, EPA/DOE material, FactorsToday and AZI price history. The detailed source inventory follows in Appendix B. Management statements are treated as hypotheses and distinguished from filed results.

APPENDIX A — Standard Diligence Questionnaire

General

What thoughtful questions should investors ask? The highest-value questions are operational rather than TAM-based. What portion of each facility’s capacity is productive today? What incremental equipment and working capital are required to reach the stated $2B-plus BASX capacity? What are facility-level gross margins and ROIC? How much backlog is tied to the three largest customers, and what contractual cancellation/re-timing rights exist? Why should BASX margins rise when peers are also ramping capacity? Why does compensation omit ROIC and FCF during the largest capital build in company history? Finally, which portion of the Q1 AAON-brand rebound is catch-up from A2L disruption versus repeatable share gain?

Cyclicality & Earnings Nature

Are earnings at a cyclical high or low? Reported margins and returns are near a recent low, while revenue and backlog are at records. FY2025 operating margin of 10.1% and TTM ROIC of 9.3% are far below 2023’s 19.5% and 24.2%. The low reflects ERP disruption, A2L transition, startup costs, outsourcing and a structurally lower-margin mix. It is not safe to call the entire gap cyclical; BASX and Coil margins around 24% indicate some permanent mix reset.

External environment or internal actions? Both. AI/data-center capex and commercial replacement demand drive orders. Internal actions—BASX acquisition, nearly sixfold footprint expansion, ERP implementation, Memphis ramp and temporary outsourcing—determine margin and cash conversion. The 2025 trough was substantially self-inflicted; the steady-state mix question is structural.

Revenue stability? Legacy replacement demand is relatively stable but equipment sales are not contractually recurring. BASX is project-based, concentrated and schedule-sensitive. Backlog provides visibility but not subscription-like certainty. Aftermarket parts are only about 5.6% of FY2025 sales.

Product outlook and market size? Commercial HVAC should grow with replacement, efficiency rules and construction. Data-center thermal demand is growing much faster, but market estimates vary because definitions differ. The decision-relevant fact is not a precise TAM: AAON has $1.62B of BASX backlog, while several capable rivals are adding supply. Supply response and project economics matter more than headline CAGR.

Domestic or international? AAON is principally a North American manufacturer and seller. This supports local engineering and lead times but increases exposure to US construction, hyperscaler capex and regulation.

Business Quality & Competitive Moat

Is competition increasing? In legacy commercial HVAC, competition is established and rational among large incumbents and specialists. In data-center cooling, competition and capacity are increasing as Vertiv, Modine, Munters, Johnson Controls, Schneider and others pursue the same growth pool.

How profitable is AAON? Historically very profitable: 34.1% gross margin and 24.2% ROIC in 2023. Currently less so: 26.7% FY2025 gross margin, 25.1% Q1 gross margin and 9.3% TTM company-defined ROIC. The decline is the central diligence problem.

How profitable is the industry and what are barriers? The best commercial-HVAC profits sit in replacement, specification, service and installed-base relationships. Barriers include engineering qualification, distribution and reputation. Data-center thermal barriers include engineering, testing, qualification and manufacturing execution, but buyers are sophisticated and supplier investment is heavy. A large backlog alone is not a barrier.

Can the business be understood? Yes at the economic level: AAON converts metal, components, engineering and labor into high-value thermal equipment. Complexity lies in segment/brand overlap, percentage-of-completion revenue and the different economics of legacy and BASX.

Foreign low-cost labor risk? Limited as a direct substitution threat because large customized systems require domestic engineering, logistics, certification and service. Imported components can affect input costs and supply. Larger global competitors can use broader sourcing scale.

Do brands matter? The AAON brand matters among engineers, owners and reps because reliability and configurability reduce lifecycle risk. BASX is developing a reputation in data-center thermal, but financial evidence of durable brand pricing power is not yet established.

Nature of competition? Legacy competition is total-cost-of-ownership, specification, lead time and channel execution. BASX competition is project engineering, qualification, delivery, performance and price.

Switching costs? Real but narrow in legacy: engineered specifications, footprints, controls, parts, rep knowledge and replacement familiarity. They are less proven in BASX, where projects can be separately sourced and scheduled.

Greenwald verdict: demand-side captivity exists in legacy; national scale, network effects and material patent protection do not. BASX has no proven barrier yet. Overall advantage is weak-to-narrow.

Financial Condition & Balance Sheet

Unrecognized assets? The installed base, brand, representative relationships and NAIC testing capability are economically valuable but carried at limited book value. The most important recorded assets are plants, inventory, receivables and contract assets.

Off-balance-sheet liabilities? No thesis-level hidden financing was identified. Operating leases and NMTC structures are disclosed. Litigation exposure from putative HVAC price-fixing cases is unquantified and should be monitored.

Accounting conservatism? Standard overall, with judgment concentrated in over-time BASX revenue and cost-to-complete estimates. Net contract assets reached $298.4M. That does not imply misconduct; it increases estimation and cash-conversion risk. Filed GAAP numbers should anchor the analysis.

Capex hunger? High. FY2025 all-in capex was $204.9M, 2.59x D&A; Q1 was 2.53x. Memphis and Longview remain well below full utilization and have multi-year ramps. The business may become less capital hungry after the build, but that is an assumption.

Liquidity? Adequate but project-dependent. Unrestricted cash was $13,000, revolver debt $425.2M and availability $173.5M. Leverage was 1.71x against a 3.0x covenant. The current ratio looks strong, but current assets are overwhelmingly working capital.

Capital Allocation & Management

How much FCF is generated and how is it used? FY2025 FCF was deeply negative; Q1 all-in FCF was negative $18.9M. Capital funds facilities, equipment, ERP, R&D and working capital. The company also pays a small dividend and retains a buyback authorization. Current growth is debt-supported rather than self-funded.

Significant acquisitions? BASX in December 2021 is the only thesis-level acquisition. It was a strong strategic market call and created the growth platform. Its return on the total acquisition-plus-capacity investment remains unproven.

Buybacks? No open-market repurchase occurred in Q1; approximately $70M remained authorized. Historical repurchases helped offset dilution. A repurchase funded by debt during negative FCF must be judged against alternative uses and price.

Share issuance and insider grants? Shares outstanding rose 0.62% year over year. Q1 SBC was $7.7M, 1.55% of sales. This is not extreme dilution, but SBC grew 91% and is a real cost.

Compensation policy? Annual awards weight operating profit and net sales, without explicit ROIC, FCF or per-share measures. Relative TSR and ownership guidelines help, but the structure is insufficiently return-focused for a capital-intensive expansion.

Management motivations and ownership? Founder Norman Asbjornson retains substantial ownership and alignment. Current operators own less and historical filings show net selling near high prices, although no Form 4 occurred after June 8. Two new directors add relevant supply-chain and CFO experience but initially reported no beneficial ownership.

Capital-cycle verdict: AAON is in the asset-growth/lag phase. Capacity and working capital expanded faster than earnings; ROIC fell toward the cost of capital. The next phase must be utilization and cash harvesting, not another narrative-led expansion.

Valuation & Market Data

ADR, MLP or K-1? No. AAON is a US C-corporation listed on Nasdaq.

Dividend policy? A small quarterly dividend; Q1 cash dividends were $8.1M. It is not the core return thesis and is currently paid during negative all-in FCF.

How profitable? TTM net income was about $118M and company-defined ROIC 9.3%. Consensus expects substantial improvement, but those estimates are not facts.

Net income versus OCF? FY2025 divergence was extreme: about $108M net income and near-zero OCF. Q1 improved to $39.8M net income and $34.0M OCF, but all-in FCF remained negative because capex and capitalized intangibles exceeded OCF.

Current valuation? At $94.83, equity value is about $7.77B and EV about $8.21B. The stock is approximately 41.5x FY2026 consensus EPS and 23x FY2026 consensus EBITDA, falling to 27.2x and 16.7x on FY2027 estimates. The apparent compression depends on unreported growth and margin recovery.

Strategic valuation? Current EV is more than five times company-defined invested capital. A large majority of value is growth/franchise value rather than reproduction value or current EPV. That is appropriate only if future ROIC rises materially above 9%.

Risks & Downside

What would cause the stock to decline? Q2 gross margin near 25%; a lower or lower-quality backlog; project delays; another working-capital surge; rising revolver debt; sustained 24% BASX/Coil margins; weaker legacy bookings; litigation escalation; or multiple compression as factor momentum weakens.

Catastrophic loss? Low probability. AAON is profitable, has real plants and backlog, and retains covenant headroom. A combined project cancellation, working-capital reversal and financing shock could create stress, but that is not the base case.

Total loss? Very low. The realistic adverse case is a large equity de-rating and years of poor returns, not zero.

Recent News & Events

Has the environment changed? Since June 8, the price changed more than the operating evidence. AAON fell 28.2%, while no new quarter was reported. The next release is August 10 after the cutoff.

Acquisitions or accounting changes? None in the update window. Over-time revenue remains the key accounting judgment.

New facilities or management? Existing Memphis and Longview ramps continue. Two directors were added July 28 with manufacturing/supply-chain and CFO experience. They reported no initial beneficial ownership. No new insider transaction was filed after June 8.

Litigation/regulatory developments? Putative HVAC price-fixing class actions now name AAON entities; allegations are unproven and exposure unquantified. EPA provided limited relief for certain pre-2025 residential/light-commercial high-GWP inventory; broader efficiency and refrigerant requirements remain.

Immediate diligence action: read the August 10 Q2 release and 10-Q before treating this pre-earnings report as current. Recalculate margin, backlog, FCF, debt and valuation from that filing.

APPENDIX B — Source Appendix

AAON, Inc. — Source Appendix

Research cutoff: August 9, 2026 Access date unless otherwise stated: August 9, 2026 Evidence rule: SEC filings and governing regulatory documents control over company releases, transcripts, aggregators, and media.

A. AAON primary public sources

1. AAON, Inc. Form 10-Q for the quarter ended March 31, 2026. AAON / U.S. Securities and Exchange Commission. Filed May 7, 2026. SEC filing; accession 0000824142-26-000036. https://www.sec.gov/Archives/edgar/data/824142/000082414226000036/aaon-20260331.htm Used for Q1 revenue, brand mix, margins, backlog, contract assets/liabilities, working-capital terms, capex guidance, segment results, and balance-sheet reconciliation. This is the controlling Q1 source.

2. AAON, Inc. Form 10-K for the year ended December 31, 2025. AAON / U.S. Securities and Exchange Commission. Filed March 2, 2026. SEC filing; accession 0000824142-26-000005. https://www.sec.gov/Archives/edgar/data/824142/000082414226000005/aaon-20251231.htm Used for FY2025 business description, brand and segment economics, competition, customer concentration, order/cancellation risk, historical cash flow, capex, and prior-year regulatory transition.

3. “AAON Reports First Quarter 2026 Results with Record Sales and Backlog, Robust Earnings Growth, and Raises Full-Year Guidance.” AAON Investor Relations. Published May 7, 2026. Company earnings release. https://investors.aaon.com/investor-news/aaon-reports-first-quarter-2026-results-with-record-sales-and-backlog-robust-earnings-growth-and-raises-full-year-guidance Used as a management-summary cross-check; the 10-Q controls on any conflict.

4. “AAON Announces Second Quarter 2026 Conference Call and Webcast.” AAON Investor Relations. Published July 23, 2026. Company event notice. https://investors.aaon.com/investor-news/aaon-announces-second-quarter-2026-conference-call-and-webcast Establishes that Q2 results were scheduled for August 10, 2026 after market close and were not available at the August 9 cutoff.

5. AAON, Inc. Form 8-K dated July 28, 2026. AAON / U.S. Securities and Exchange Commission. Filed July 30, 2026. SEC filing; accession 0000824142-26-000048. https://www.sec.gov/Archives/edgar/data/824142/000082414226000048/aaon-20260728.htm Used for board expansion and appointments of Robert L. Buttermore III and Patrick J. Jermain.

6. AAON Investor Relations financial summary. AAON Investor Relations. Continuously updated webpage; accessed August 9, 2026. Company webpage. https://investors.aaon.com/ Used for the company’s displayed FY2025 sales, EBITDA margin, EPS, ROIC (8.8%), and year-end backlog. Metrics remain company-defined; filing-derived calculations should be labeled separately.

B. Competitor and industry primary public sources

7. “Vertiv Reports Strong Second Quarter 2026 … Raises Full Year 2026 Guidance.” Vertiv Holdings Co. Published July 29, 2026. Company earnings release. https://investors.vertiv.com/news/news-details/2026/Vertiv-Reports-Strong-Second-Quarter-2026-with-Diluted-EPS-Growth-of-53-Adjusted-Diluted-EPS-Growth-of-60-Raises-Full-Year-2026-Guidance-Across-All-Key-Metrics/default.aspx Used for Q2 sales, adjusted operating margin, operating cash flow, adjusted FCF, and guidance.

8. “Vertiv Strengthens Liquid-Cooling System Capability with Acquisition of Strategic Thermal Labs.” Vertiv Holdings Co. Published April 27, 2026. Company transaction release. https://investors.vertiv.com/news/news-details/2026/Vertiv-Strengthens-Liquid-Cooling-System-Capability-with-Acquisition-of-Strategic-Thermal-Labs/ Used for the acquisition of chip-level cold-plate, liquid-cooling, and validation capability.

9. “Vertiv Completes Acquisition of ThermoKey, Expanding Heat Rejection Portfolio for AI Data Centers.” Vertiv Holdings Co. Published June 12, 2026. Company transaction release. https://investors.vertiv.com/news/news-details/2026/Vertiv-Completes-Acquisition-of-ThermoKey-Expanding-Heat-Rejection-Portfolio-for-AI-Data-Centers/default.aspx Used for heat-rejection portfolio and manufacturing-capacity expansion.

10. “Vertiv Increases Manufacturing Capacity with New Facility in Malaysia.” Vertiv Holdings Co. Published July 1, 2026. Company capacity release. https://investors.vertiv.com/news/news-details/2026/Vertiv-Increases-Manufacturing-Capacity-with-New-Facility-in-Malaysia-to-Support-Growing-Demand-for-AI-and-Digital-Infrastructure-Across-Asia/default.aspx Used for new manufacturing/testing capacity spanning thermal, CDU, power, and integrated infrastructure.

11. “Modine Reports First Quarter Fiscal 2027 Results.” Modine Manufacturing Company. Published July 29, 2026. Company earnings release. https://investors.modine.com/news/news-details/2026/Modine-Reports-First-Quarter-Fiscal-2027-Results/default.aspx Used for Data Centers revenue, gross margin, capacity-ramp inefficiencies, warranty/material pressures, and free cash flow.

12. “Modine Announces New $100 Million Investment to Expand Capacity for North American Data Centers Business.” Modine Manufacturing Company. Published July 29, 2025. Company capacity release. https://investors.modine.com/news/news-details/2025/Modine-Announces-New-100-Million-Investment-to-Expand-Capacity-for-North-American-Data-Centers-Business/default.aspx Used for the four-site, 12–18 month U.S. capacity program. Current enough for an active project; forward-looking benefits remain unproven.

13. “Modine Announces Landmark $4 Billion Long-Term Capacity Agreement through 2029.” Modine Manufacturing Company. Published May 26, 2026. Company contract release. https://investors.modine.com/news/news-details/2026/Modine-Announces-Landmark-4-Billion-Long-Term-Capacity-Agreement-through-2029-with-Strategic-Data-Center-Customer-for-Airedale-by-Modine-Cooling-Solutions/default.aspx Used for the >$4 billion 2027–2029 capacity commitment. This is a capacity agreement, not recognized revenue.

14. “Munters Breaks Ground on Data Center Technologies Expansion in Virginia.” Munters Group. Published July 9, 2025. Company capacity release. https://www.munters.com/en-us/news-media/press-releases/2025/munters-breaks-ground-on-data-center-technologies-expansion-in-virginia/ Used for the 200,000-square-foot expansion and chiller test laboratory scheduled for Q2 2026 completion.

15. “Johnson Controls Launches YORK YDAM … for Multistory Data Centers and AI Factories.” Johnson Controls. Published February 3, 2026. Company product release. https://www.johnsoncontrols.com/media-center/news/press-releases/2026/02/03/johnson-controls-launches-york-ydam-the-ultimate-highdensity-chiller-for-multistory-data-centers-and Used for the 3.5MW-class water-free air-cooled chiller and competitive-product scope. Product-performance statements are manufacturer claims.

15A. “Johnson Controls Spotlights New Thermal Management and Waste Heat Strategies That Ease Grid and Water Constraints for Data Centers.” Johnson Controls. Published April 21, 2026. Company product/industry release. https://www.johnsoncontrols.com/media-center/news/press-releases/2026/04/21/thermal-management-and-waste-heat-strategies Used for the stated Silent-Aire CDU range of 500kW to >10MW. Capacity and efficiency statements are manufacturer claims, not independently tested results.

16. “Johnson Controls Reports Strong Q2 Results; Raises FY26 Guidance.” Johnson Controls International plc. Published May 6, 2026. Company earnings release. https://investors.johnsoncontrols.com/news/news-details/2026/Johnson-Controls-Reports-Strong-Q2-Results-Raises-FY26-Guidance/default.aspx Used for Americas orders +40%, backlog +32%, and data-center-supported demand.

17. Lennox International Inc. Form 10-Q for the quarter ended March 31, 2026. Lennox / U.S. Securities and Exchange Commission. Filed April 22, 2026. SEC filing; accession 0001069202-26-000054. https://www.sec.gov/Archives/edgar/data/1069202/000106920226000054/lii-20260331.htm Primary peer corroboration for the existence, allegations, class period, consolidation caption, and unquantified nature of the HVAC antitrust litigation. It does not establish liability by AAON.

C. Regulation and legal sources

18. “Air-Cooled Unitary Air Conditioners and Heat Pumps.” U.S. Department of Energy, Building Technologies Office. Current regulatory-program page; accessed August 9, 2026. Government source. https://www.energy.gov/cmei/buildings/air-cooled-unitary-air-conditioners-and-heat-pumps Used for the confirmed January 1, 2029 compliance date and IVEC/IVHE framework. Links to the governing Federal Register notices.

19. “Technology Transitions Final Rule Fact Sheet.” U.S. Environmental Protection Agency. Published/updated May 2026. Government fact sheet. https://www.epa.gov/system/files/documents/2026-05/fact-sheet-san-12166-technology-transitions-frm.pdf Used for removal of the January 1, 2026 installation deadline for eligible pre-2025 higher-GWP residential/light-commercial systems.

20. “Technology Transitions HFC Restrictions by Sector.” U.S. Environmental Protection Agency. Current regulatory table; accessed August 9, 2026. Government source. https://www.epa.gov/hfcs/technology-transitions-hfc-restrictions-sector Used to cross-check sector-specific GWP limits and compliance dates.

21. Docket summary, In re HVAC Equipment Antitrust Litigation, No. 2:26-cv-10949. U.S. District Court for the Eastern District of Michigan; docket metadata republished by Justia. Case filed March 20, 2026; accessed August 9, 2026. Court-docket index/secondary host. https://dockets.justia.com/docket/michigan/miedce/2%3A2026cv10949/392954 Used to identify filing date, lead case, parties, and procedural entries. PACER/court filings control.

22. Complaint, Berg v. Robert Bosch LLC et al., No. 2:26-cv-10949-SKD-APP. U.S. District Court for the Eastern District of Michigan. Filed March 20, 2026. Filed complaint hosted by plaintiffs’ counsel. https://www.locklaw.com/wp-content/uploads/2026-03-20-1-Berg-v.-Robert-Bosch-Class-Action-Complaint-26-cv-10949-SKD-APP-E.D.-Mich.pdf Used only for allegations and named defendants. Allegations are not findings of fact.

23. Order / counsel listing in In re HVAC Equipment Antitrust Litigation. U.S. District Court for the Eastern District of Michigan. Issued May 21, 2026; republished by Leagle. Court order/secondary host. https://www.leagle.com/decision/infdco20260521a77 Used to corroborate counsel appearances for the AAON entities. Court-hosted/PACER copy is preferable if available.

D. Third-party data and transcript tools

24. ROIC.ai MCP pulls for NASDAQ:AAON. ROIC.ai. Pulled August 9, 2026. Third-party financial aggregation and transcript service; no stable public URL exposed by the connector. Covered company profile/news, quarterly statements, ratios/valuation, Q1-2026 transcript, and earnings calendar. Financial figures were reconciled to the 10-Q. Consensus revenue/EPS and transcript wording remain third-party/tool-sourced and should be labeled accordingly.

E. Market-data, filing-sweep, and additional capital-allocation sources

29. AAON June 2026 investor presentation (Exhibit 99.1 to Form 8-K). AAON / U.S. Securities and Exchange Commission. Presentation dated June 2, 2026; furnished June 8, 2026. Company presentation; accession 0000824142-26-000044. https://www.sec.gov/Archives/edgar/data/824142/000082414226000044/investorpresentation_jun.htm Used for current guidance, TTM brand sales, company-defined ROIC/invested capital, capacity/utilization, and capex/R&D data. Forward-looking capacity and utilization claims remain management estimates.

30. AAON EDGAR filing history. U.S. Securities and Exchange Commission. Live filing index; accessed August 9, 2026. Government filing index. https://www.sec.gov/edgar/browse/?CIK=824142&owner=exclude Used to verify no Q2 10-Q/earnings filing existed by cutoff and no new financing/M&A filing appeared in the update window.

31. AAON EDGAR ownership history. U.S. Securities and Exchange Commission. Live filing index; accessed August 9, 2026. Government filing index. https://www.sec.gov/edgar/browse/?CIK=824142&owner=include Used to verify Form 3/Form 4 timing. Individual ownership filings control.

32. Robert L. Buttermore III Form 3. AAON / U.S. Securities and Exchange Commission. Filed August 6, 2026. SEC ownership filing; accession 0000824142-26-000049. https://www.sec.gov/Archives/edgar/data/824142/000082414226000049/xslF345X06/wk-form3_1786045742.xml Shows no securities beneficially owned at initial filing.

33. Patrick J. Jermain Form 3. AAON / U.S. Securities and Exchange Commission. Filed August 6, 2026. SEC ownership filing; accession 0000824142-26-000050. https://www.sec.gov/Archives/edgar/data/824142/000082414226000050/xslF345X06/wk-form3_1786046173.xml Shows no securities beneficially owned at initial filing.

34. AZI Trading AAON adjusted-price data. AZI Trading. Data through August 7, 2026; pulled August 9, 2026. Third-party market-data CSV. https://azitrading.com/controls/download-data.php?t=AAON Used for split/dividend-adjusted price history and moving averages. Cross-checked to FactorsToday for the latest close; not an exchange-primary feed.

35. FactorsToday AAON data APIs. FactorsToday. Data dated August 7–9, 2026; pulled August 9, 2026. Proprietary third-party factor/market analytics. Endpoints: https://www.factorstoday.com/api/stock-loadings/AAON ; https://www.factorstoday.com/api/leaderboard/AAON ; https://www.factorstoday.com/api/stock-info/AAON ; https://www.factorstoday.com/api/stock-specific-vol/AAON ; https://www.factorstoday.com/api/related-stocks/AAON ; https://www.factorstoday.com/api/factor-returns/historic ; https://www.factorstoday.com/api/factor-returns/intraday Used for vendor-model loadings, fit, volatility, related securities, and factor regimes. These are model outputs, not issuer fundamentals; custom-factor definitions and annualization require explicit labeling.

36. AAON short-interest pages. MarketBeat and Benzinga. July 2026 data; accessed August 9, 2026. Secondary market-data webpages. https://www.marketbeat.com/stocks/NASDAQ/AAON/short-interest/ ; https://www.benzinga.com/quote/AAON/short-interest Used for July 15 and June 30 short-interest cross-checks. Do not call these pages “official”; cite as secondary summaries of exchange-reported data unless a Nasdaq/FINRA primary record is added.

37. Gary Fields Forms 4 and Rebecca Thompson Form 4. AAON / U.S. Securities and Exchange Commission. Filed May 27, June 1, and June 5, 2026. SEC ownership filings. https://www.sec.gov/Archives/edgar/data/824142/000164282626000010/wk-form4_1779906846.xml ; https://www.sec.gov/Archives/edgar/data/824142/000164282626000011/wk-form4_1780353195.xml ; https://www.sec.gov/Archives/edgar/data/824142/000156576826000024/wk-form4_1780670142.xml Used for pre-baseline insider sales. These trades are historical context, not new post-June-8 activity.

38. Historical AAON earnings releases used for the five-year event map. AAON Investor Relations. Company releases, accessed August 9, 2026: Q1-2022 (May 5, 2022), https://investors.aaon.com/investor-news/aaon-reports-earnings-record-sales-and-backlog-for-the-first-quarter-of-2022 ; Q3-2022 (November 7, 2022), https://investors.aaon.com/investor-news/aaon-reports-record-sales-earnings-and-backlog-for-the-third-quarter-of-2022 ; Q1-2023 (May 4, 2023), https://investors.aaon.com/investor-news/aaon-reports-record-sales-backlog ; Q2-2023 (August 3, 2023; URL slug incorrectly says 2024 but body is Q2-2023), https://investors.aaon.com/investor-news/aaon-reports-record-sales-earnings-for-the-second-quarter-of-2024 ; Q3-2023 (November 6, 2023), https://investors.aaon.com/investor-news/aaon-reports-third-quarter-of-2023-results ; Q1-2024 (May 2, 2024), https://investors.aaon.com/investor-news/aaon-reports-first-quarter-of-2024-results ; Q3-2024 (November 7, 2024), https://investors.aaon.com/investor-news/aaon-reports-record-sales-earnings-for-the-third-quarter-of-2024 ; FY2024 (February 27, 2025), https://investors.aaon.com/investor-news/aaon-reports-fourth-quarter-and-full-year-2024-results ; Q2-2025 (August 11, 2025), https://investors.aaon.com/investor-news/aaon-reports-second-quarter-2025-results Used only for historical event attribution and operating facts; dates older than 18 months are retained as necessary historical context.

39. “AAON Awarded Liquid Cooling Data Center Orders Totaling Approximately $174.5 Million.” AAON Investor Relations. Published October 25, 2024. Company order release. https://investors.aaon.com/investor-news/aaon-awarded-liquid-cooling-data-center-orders-totaling-approximately-174.5-million Used for historical event mapping; an award is not equivalent to recognized revenue.