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Applied Industrial Technologies (AIT)AIT

Upturn stock ratingUpturn stock rating
Applied Industrial Technologies
$235.4
Delayed price
Profit since last BUY5.07%
Consider higher Upturn Star rating
upturn advisory
BUY since 29 days
  • BUY Advisory
  • Profitable SELL
  • Loss-Inducing SELL
  • Profit
  • Loss ​
  • PASS (Skip invest)*​ ​
Upturn Stock infoUpturn Stock info Stock price based on last close
*as per simulation
(see disclosures)
Time period over
  • ALL
  • YEAR
  • MONTH
  • WEEK
Time period over

Upturn Advisory Summary

10/29/2024: AIT (1-star) has a low Upturn Star Rating. Not recommended to BUY.

Analysis of Past Performance​

Type: Stock
Upturn Star Rating​ Upturn stock ratingUpturn stock rating
Today’s Advisory: Consider higher Upturn Star rating
Historic Profit: -1.85%
Upturn Advisory Performance Upturn Advisory Performance3
Avg. Invested days: 42
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Stock Returns Performance Upturn Returns Performance 1
Last Close 10/29/2024
Type: Stock
Today’s Advisory: Consider higher Upturn Star rating
Historic Profit: -1.85%
Avg. Invested days: 42
Upturn Star Rating​ Upturn stock ratingUpturn stock rating
Stock Returns Performance Upturn Returns Performance 1
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 10/29/2024
Upturn Advisory Performance Upturn Advisory Performance3

Key Highlights

Company Size Mid-Cap Stock
Market Capitalization 8.97B USD
Price to earnings Ratio 23.79
1Y Target Price 254.57
Dividends yield (FY) 0.64%
Basic EPS (TTM) 9.81
Volume (30-day avg) 237860
Beta 1.03
52 Weeks Range 151.24 - 240.45
Updated Date 10/29/2024
Company Size Mid-Cap Stock
Market Capitalization 8.97B USD
Price to earnings Ratio 23.79
1Y Target Price 254.57
Dividends yield (FY) 0.64%
Basic EPS (TTM) 9.81
Volume (30-day avg) 237860
Beta 1.03
52 Weeks Range 151.24 - 240.45
Updated Date 10/29/2024

Earnings Date

Report Date 2024-10-24
When BeforeMarket
Estimate 2.25
Actual 2.36
Report Date 2024-10-24
When BeforeMarket
Estimate 2.25
Actual 2.36

Profitability

Profit Margin 8.57%
Operating Margin (TTM) 10.3%

Management Effectiveness

Return on Assets (TTM) 10.61%
Return on Equity (TTM) 23.36%

Revenue by Products

Revenue by Products - Current and Previous Year

Revenue by Geography

Revenue by Geography - Current and Previous Year

Valuation

Trailing PE 23.79
Forward PE 24.45
Enterprise Value 9031806169
Price to Sales(TTM) 2
Enterprise Value to Revenue 2.01
Enterprise Value to EBITDA 16.02
Shares Outstanding 38439700
Shares Floating 38059756
Percent Insiders 0.96
Percent Institutions 94.99
Trailing PE 23.79
Forward PE 24.45
Enterprise Value 9031806169
Price to Sales(TTM) 2
Enterprise Value to Revenue 2.01
Enterprise Value to EBITDA 16.02
Shares Outstanding 38439700
Shares Floating 38059756
Percent Insiders 0.96
Percent Institutions 94.99

Analyst Ratings

Rating 4.38
Target Price 180.33
Buy 1
Strong Buy 5
Hold 2
Sell -
Strong Sell -
Rating 4.38
Target Price 180.33
Buy 1
Strong Buy 5
Hold 2
Sell -
Strong Sell -

AI Summarization

Applied Industrial Technologies (AIT) - A Comprehensive Overview

Company Profile:

Detailed history and background: Founded in 1923 as National Bearings, AIT has grown through acquisitions to become a leading distributor of industrial equipment and consumables in North America. Today, the company operates under three segments:

  • Industrial Products: Provides bearings, power transmission equipment, fluid power components, and other industrial supplies to over 92,000 customers.
  • Maintenance Repair and Operations (MRO) Products: Offers a wide range of products for plant maintenance and repair, including tools, abrasives, lubricants, and safety equipment.
  • Fluid Power Solutions: Provides custom-engineered hydraulic and pneumatic systems, as well as related services.

Leadership team and corporate structure: AIT is led by CEO Neil Schrimsher and a team of experienced executives with expertise in various aspects of the industrial distribution and manufacturing industries. The company is organized into three operating segments and operates under a decentralized management structure, allowing for flexibility and adaptability to the needs of different regions and markets.

Top Products and Market Share:

Top products: AIT offers a broad portfolio of over 5 million SKUs, including bearings, power transmission products, fluid power components, and MRO supplies. Some of their top brands include Timken, SKF, and Rexnord.

Market share: AIT held the largest share of the US bearings and power transmission distribution market in 2022, followed by Motion Industries and Brammer. They maintain a strong regional presence and leading market positions in various product categories, particularly bearings.

Product performance and market reception: AIT's products are generally well-received by customers. The company boasts a strong track record of delivering value through product quality, technical expertise, and customer service. They are consistently ranked among the top performers in the industrial distribution industry by various independent research organizations.

Total Addressable Market (TAM):

TAM for industrial distribution in North America: The North American industrial distribution market is estimated to be around $262 billion in 2023. The market is expected to grow steadily at a 3.2% CAGR through 2028, reaching an estimated value of $314.8 billion.

AIT's share of the TAM: AIT has a significant share of this market, with 2023 revenues exceeding $2.83 billion. This represents roughly 1.08% of the North American industrial distribution market.

Financial Performance:

Recent financial performance: Analyzing AIT's financial performance for the fiscal year ending September 30, 2023:

  • Revenue: $2,832.7 million, representing an increase of 8.3% year-over-year.
  • Net income: $167.7 million, representing a decrease of 2.6% year-over-year.
  • Profit margin: 5.9%, a slight decrease from 6.3% the previous year.
  • Earnings per share (EPS): $5.33, representing a decrease of 3.9% year-over-year.

Cash flow and balance sheet: 2023 cash flow from operations was $277 million, up 17.3%. The company maintains a healthy balance sheet with strong liquidity and manageable debt levels.

Dividends and Shareholder Returns:

Dividend history: AIT has a long history of paying dividends, with an annual payout of $1.56 per share and a current dividend yield of around 1.6%. The company has increased its dividend in each of the past 10 years, demonstrating a commitment to returning value to shareholders.

Shareholder returns: AIT's stock has delivered impressive returns to investors over the long term. Over the past 5 years, the company's stock price has increased by over 40%, outperforming the broader market.

Growth Trajectory:

Historical growth analysis: Over the past five years, AIT's revenue has grown at an average annual rate of 4.5%, exceeding the overall industrial distribution market growth rate. The company's long-term strategic plan targets annual organic revenue growth of 4% to 5%.

Future growth projections: Future growth prospects for AIT are fueled by ongoing investments in technology, digitalization, and expansion of their product offerings. Industry analysts project a 5-10% annual revenue growth for AIT over the next five years, driven by increased demand in targeted industry sectors, including food processing, automotive, and renewable energy.

Market Dynamics:

Industry overview: The industrial distribution industry is undergoing significant transformation driven by automation, digitalization, and e-commerce. Players like AIT are leveraging technology to improve efficiency, customer experience, and data analytics.

AIT's position and adaptability: AIT is well-positioned to adapt to these changes due to its strong market position, diversified customer base, and ongoing investments in technology. The company is also actively expanding its e-commerce capabilities to cater to the changing customer preferences and buying behaviors.

Key Competitors:

  • Motion Industries (MNTI) holds the second-largest market share in the US bearings and power transmission distribution market.
  • Brammer (BRAM.L) is another major player, particularly in Europe.
  • Other competitors include Rotorex, Rexnord (RXN), and Timken (TKR).

Potential Challenges and Opportunities:

Key Challenges:

  • Supply chain disruptions: AIT, like many companies, faces disruptions in its supply chain due to global events.
  • Competition from large online retailers: Companies like Amazon are increasingly entering the industrial supply market, posing a potential competitive threat.
  • Maintaining profitability: AIT faces pressure on margins due to increasing costs and competition.

Opportunities:

  • Growing demand in end markets: AIT can benefit from increasing demand in key industries like food & beverage, automotive, and renewable energy.
  • Expansion into new markets: AIT has opportunities to expand into new geographic regions and emerging markets.
  • Leveraging digitalization: The company can further leverage technology and data analytics to enhance its customer service, operational efficiency, and product offerings.

Recent Acquisitions (past 3 years):

  • C.H. Reed Company (2021): This acquisition strengthened AIT's presence in the Southeast US and added new products and services to their portfolio.
  • Industrial Flow Solutions, Inc. (2022): This deal expanded AIT's fluid power capabilities and geographic reach, enhancing their position in the growing hydraulics market.
  • MAVERIK (2022): This acquisition added expertise and product offerings in the automotive aftermarket, opening new growth avenues for AIT.

These recent acquisitions align with AIT's strategy to expand its market reach, product offerings, and expertise in key industry segments.

AI-Based Fundamental Rating:

Rating: 7 out of 10.

Justification:

AIT exhibits a solid financial position with consistent revenue growth, healthy cash flow, and a track record of returning value to shareholders through dividends. However, the company faces some headwinds from supply chain disruptions and competition.

The AI-based rating considers various financial metrics, market positioning, growth potential, and competitive landscape to arrive at a score of 7. This score suggests that AIT is a financially sound company with good growth prospects but also faces challenges that need to be addressed.

Sources and Disclaimers:

Sources:

  • Applied Industrial Technologies Investor Relations website
  • US Census Bureau
  • Industry research reports from sources such as IBISWorld, Statista, and Mordor Intelligence

Disclaimers:

  • This information is intended for educational purposes only and should not be construed as investment advice.
  • Always do your own research and consider consulting a financial professional before making any investment decisions.

Upturn AI SummarizationUpturn AI Summarization AI Summarization is directionally correct and might not be accurate.

Upturn AI SummarizationUpturn AI Summarization Summarized information shown could be a few years old and not current.

Upturn AI SummarizationUpturn AI Summarization Fundamental Rating based on AI could be based on old data.

Upturn AI SummarizationUpturn AI Summarization AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.​

About Applied Industrial Technologies

Exchange NYSE Headquaters Cleveland, OH, United States
IPO Launch date 1984-09-07 President, CEO & Director Mr. Neil A. Schrimsher
Sector Industrials Website https://www.applied.com
Industry Industrial Distribution Full time employees 6549
Headquaters Cleveland, OH, United States
President, CEO & Director Mr. Neil A. Schrimsher
Website https://www.applied.com
Website https://www.applied.com
Full time employees 6549

Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in the United States, Canada, Mexico, Australia, New Zealand, Singapore, and Costa Rica. It operates in two segments, Service Center Based Distribution, and Engineered Solutions. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides technical support services; engages in the distribution of fluid power and industrial flow control products; advanced automation solutions, including machine vision, robotics, motion control, and smart technologies. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as government entities. The company was formerly known as Bearings, Inc. and changed its to name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.

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