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A. O. Smith Corporation
S&P 500
$8.1B
Market Cap
17.4
P/E
1.40
PEG
30.0%
ROCE
29.2%
ROE
0.11
D/E
19.0%
OPM
-27.9%
% from 52W High
26
α RS
🔍 AOS is showing a high-conviction setup because it matches 16 of 39 tracked screener presets, Sector RRG has Industrials in the Improving quadrant with the trail still strengthening, and fcf_machines preset's Backtest win rate is 57.2% over 90 days. Net: Broad signal stack, not a recommendation. ? Conviction RRG Backtest
Sources
Conviction 16/39 · Industrials in Improving quadrant · Backtest win rate 57.2%
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🌏 Global Investor Returns
Currency-adjusted total returns for AOS including FX impact
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
📊 Sector Averages
About

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, homes, apartments, and condominiums, and other large commercial buildings; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, Impact, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms, as well as offers Aquasana branded products directly to consumers through e-commerce channels; and A. O. Smith branded water treatment products through dealer network and Amazon. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

Key Ratios Snapshot
📈 Growth Pattern
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⭐ Superinvestors Holding AOS
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Manager Shares Value % of Fund Period
Jim Simons Renaissance Technologies LLC 744.4K $49.1M 0.08% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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3-Statement Financial Model
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🎙 Management Tone Cautious ~ Volatile 4 quarters Full tone analysis in Intelligence →
📊 MIXED A. O. Smith Q1 2026 sales $946M, EPS $0.85, guides FY26 EPS $3.70-$4.00.
Revenue & Profitability
First quarter 2026 total sales decreased 2% year-over-year to $946 million. EPS was $0.85, down 11%. Free cash flow was $119 million, driven by working capital management. North America segment earnings were $175 million with margin of 23.3%; Rest of World earnings were $12 million with margin of 6.2%. The company revised full-year 2026 adjusted EPS guidance to $3.70-$4.00.
Outlook
Management expects full-year 2026 U.S. residential water heater industry shipments to be flat to down, with soft new construction and steady replacement demand. Commercial water heater volumes are now projected flat due to a one-year enforcement delay of a Department of Energy regulation. In China, headwinds persist from low consumer confidence and limited government stimulus, with sales expected down low double digits in local currency. A cautious consumer environment is also pressuring North America water treatment channels.
Growth Drivers
Key growth levers include: North America water treatment priority dealer channel (double-digit growth in 2026), Leonard Valve (double-digit growth, $70 million in 2026 sales), North America boiler sales (6%-8% growth driven by pricing and backlog), and India business (approximately 10% growth). Price increases of 4%-7% across most water heater and boiler products are expected to benefit from the third quarter onward.
Balance Sheet & CapEx
Capital expenditure guidance for 2026 remains unchanged at $70 million-$80 million. Investments related to capacity for the commercial water heater regulatory transition have been delayed pending clarity on the rule's enforcement date. The company is investing in process intelligence and AI capabilities to improve customer experience and productivity, such as order management and warranty claims processing.
Margins
North America segment margin is expected to be approximately 24% for full-year 2026. Rest of World segment margin is forecasted between 6% and 7%. Q1 2026 North America segment margin was 23.3%, down 140 bps year-over-year due to lower water heater volumes. Price-cost relationship was favorable in Q1, but Q2 margins face pressure from rising steel, freight, and other input costs before the benefit of announced price increases in Q3/Q4.
Key Risks
Risks highlighted include: persistent softness in China consumer demand and the ongoing strategic assessment creating market uncertainty; weather-related production and shipping constraints at the Ashland City facility; rising steel costs (expected 15% year-over-year increase) and freight/transportation costs driven by oil price volatility; potential tariff impacts; and a cautious consumer environment leading to trade-down in water treatment. The DOE commercial water heater rule delay reduces near-term demand visibility.
Generated by AI · Q1 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-07-30
Q2 2026 saw $1B in sales and $1.03 adjusted EPS, with strong North America performance offsetting China weakness. Free cash flow surged 67%, supporting a 50% increase in share repurchase target. Guidance was narrowed due to softer residential water heater demand, while boiler and water treatment outlooks remain solid.
Q1 2026 Q1 2026 2026-04-30
Q1 2026 sales declined 2% year-over-year, with North America up 1% and Rest of World down 11%. Adjusted EPS guidance was lowered due to China weakness and regulatory delays, but strong free cash flow and margin improvement initiatives continue.
Q4 2025 Q4 2025 2026-01-29
Record 2025 EPS of $3.85 was driven by margin gains in both segments, with North America growth offsetting China declines. 2026 guidance calls for 2–5% sales growth and EPS of $3.85–$4.15, with continued investment in water management and disciplined capital returns.
Q3 2025 Q3 2025 2025-10-28
Third-quarter sales rose 4% year-over-year, with strong North America performance offsetting a 12% sales decline in China. EPS increased 15%, and margins expanded in both segments. 2025 guidance was narrowed, with sales now expected flat to up 1% due to China and U.S. residential softness.
Q2 2025 Q2 2025 2025-07-24
Q2 2025 sales declined 1% year-over-year to $1B, but EPS rose 1% to $1.07. North America boiler sales grew 6%, while China sales fell 11% amid economic headwinds. 2025 EPS guidance was raised, and a strategic review of the China business was initiated.
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📊 Analysis Methodology

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
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Information Sources:
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