Education
About Us
Working with TipRanks
Follow Us
Applied Industrial Technologies (AIT)
NYSE:AIT
Top Page
Applied Industrial Technologies
(NYSE:AIT)
Select Model
Select Model
Rating:73Outperform
Price Target:
$289.00
▲(11.84% Upside)
Applied Industrial Technologies' overall stock score of 73 reflects its strong financial performance and positive earnings call highlights, tempered by mixed technical indicators and moderate valuation. The company's strategic acquisitions and robust cash generation are significant strengths, while challenges in demand and valuation metrics present potential risks.
Positive Factors
Strong Cash Generation
Robust cash generation enhances financial flexibility, allowing AIT to fund operations, strategic acquisitions, and share buybacks, supporting long-term growth.
Strategic Acquisitions
Acquisitions like Hydradyne expand AIT's market reach and product offerings, driving inorganic growth and strengthening competitive positioning.
Record Financial Performance
Record-breaking financial performance indicates strong operational execution and market demand, reinforcing AIT's leadership in the industrial distribution sector.
Negative Factors
Muted Demand Environment
A decline in demand across key markets could pressure revenue growth and impact AIT's ability to maintain its growth trajectory in the near to medium term.
Challenges in Service Center Segment
Declines in the Service Center segment highlight operational challenges, potentially affecting overall profitability and necessitating strategic adjustments.
AR Provisioning Impact
Increased AR provisioning pressures margins, indicating potential issues with receivables management that could affect financial performance if persistent.
Applied Industrial Technologies (AIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.76B
Dividend Yield0.68%
Average Volume (3M)210.45K
Price to Earnings (P/E)25.5
Beta (1Y)1.14
Revenue Growth1.88%
EPS Growth2.91%
CountryUS
Employees6,818
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)2.84
Shares Outstanding37,751,072
10 Day Avg. Volume192,789
30 Day Avg. Volume210,449
Financial Highlights & Ratios
PEG Ratio8.07
Price to Book (P/B)4.83
Price to Sales (P/S)1.95
P/FCF Ratio19.13
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue2.05
Enterprise Value/Gross Profit6.75
Enterprise Value/Ebitda16.10
Forecast
1Y Price Target
$300.00Price Target Upside16.09% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Applied Industrial Technologies Business Overview & Revenue Model
Company DescriptionApplied Industrial Technologies (AIT) is a leading distributor of industrial products and services, specializing in various sectors such as fluid power, power transmission, bearings, and industrial supplies. The company serves a diverse range of industries including manufacturing, construction, and transportation. AIT offers a comprehensive portfolio of products, including seals, hydraulic components, and maintenance supplies, along with value-added services like inventory management and engineering solutions.
How the Company Makes MoneyApplied Industrial Technologies generates revenue primarily through the sale of industrial products and components, alongside providing related services. The company's key revenue streams include direct product sales, which account for a significant portion of its earnings, and service offerings that include technical support, inventory management, and customized engineering solutions. AIT benefits from a broad customer base that spans various industries, creating a stable demand for its products. Additionally, the company often engages in partnerships with manufacturers to distribute their products, enhancing its product offering and market reach. These collaborations, along with a focus on customer service and operational efficiency, contribute to AIT's overall profitability.
Applied Industrial Technologies Earnings Call Summary
Earnings Call Date:Aug 14, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted record-breaking financial performance, strong cash generation, and successful strategic acquisitions, notably Hydradyne. Despite these achievements, the company faced challenges in demand across several markets, impacting the Service Center segment and requiring adjustments for AR provisioning and LIFO expenses. The overall sentiment reflects a balanced outlook, with significant achievements counterbalanced by underlying market challenges.Q4-2025 Updates
Positive Updates
Record-Breaking Financial Performance
Achieved new records for sales, EBITDA, and EPS in fiscal 2025. Full year EPS growth of 4% exceeded the high end of initial guidance. Gross margins expanded nearly 50 basis points and surpassed 30% for the first time in company history.
Strong Cash Generation and Capital Deployment
Generated over $465 million of free cash, up 34% to a new record. Deployed over $560 million in fiscal 2025, including strategic acquisitions and share buybacks.
Acquisition of Hydradyne
Completed the strategic acquisition of Hydradyne, the largest M&A transaction in 6 years, contributing positively to EBITDA growth and segment performance.
Positive Sales and Growth Trends
Fourth quarter sales exceeded expectations by 2.5%, with a return to positive organic growth in Engineered Solutions segment for the first time in 7 quarters.
Encouraging Market Trends
Positive growth in industrial and mobile OEM fluid power orders, with Engineered Solutions segment orders increasing by a high single-digit percent year-over-year.
Negative Updates
Muted Demand Backdrop
Faced a muted demand environment with declines in several top markets including machinery, primary metals, utility, energy, aggregates, and chemicals.
Challenges in Service Center Segment
Service Center segment experienced a 0.4% year-over-year decline on an organic daily basis, primarily due to muted MRO spending and challenges in international operations.
AR Provisioning Impact
Higher-than-expected AR provisioning impacted EBITDA margins during the fourth quarter, which is expected to normalize moving forward.
LIFO Expense Impact
Recognized LIFO expense of $2.9 million in the quarter, which was unfavorable compared to the prior year due to a LIFO layer liquidation benefit last year.
Company Guidance
In the Fiscal 2025 Fourth Quarter Earnings Call, Applied Industrial Technologies reported significant metrics indicating a strong performance. The company achieved record sales, EBITDA, and EPS, with full-year EPS growth of 4% surpassing initial guidance. Gross margins expanded by nearly 50 basis points, exceeding 30% for the first time. Fourth-quarter sales exceeded expectations by 2.5%, with average daily sales increasing 4% sequentially. The Engineered Solutions segment saw organic growth for the first time in 7 quarters, contributing to a 20.7% year-over-year sales increase. The company's strategic acquisition of Hydradyne added over 400 basis points to inorganic growth. Applied's fiscal 2025 free cash flow reached $465 million, up 34%, enabling $560 million in capital deployment. For fiscal 2026, the company projects total sales growth of 4% to 7% and EPS between $10 to $10.75, supported by ongoing M&A activity and share buybacks.Applied Industrial Technologies Financial Statement Overview
Summary
Applied Industrial Technologies shows strong financial performance with consistent revenue and profit growth, effective leverage management, and robust cash flow generation. The company is well-positioned in its industry, although careful monitoring of debt levels is advisable to maintain financial stability.Income Statement
Applied Industrial Technologies has demonstrated strong revenue growth with a consistent increase in gross profit margins over the years. The company has maintained healthy EBIT and EBITDA margins, indicating efficient operational management. The net profit margin has also improved, reflecting enhanced profitability. Overall, the income statement shows a positive growth trajectory and profitability.85
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a decreasing debt-to-equity ratio, indicating improved leverage management. The return on equity remains strong, showcasing effective use of shareholder funds. However, the equity ratio suggests moderate reliance on debt financing, which could pose a risk if not managed carefully.78
Positive
Cash Flow
The cash flow statement reveals robust free cash flow growth, supporting the company's ability to fund operations and investments. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is also healthy, underscoring the company's ability to convert earnings into cash.82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.56B | 4.56B | 4.48B | 4.41B | 3.81B | 3.24B |
| Gross Profit | 1.38B | 1.38B | 1.34B | 1.29B | 1.11B | 935.52M |
| EBITDA | 579.77M | 579.66M | 571.03M | 527.67M | 410.13M | 263.01M |
| Net Income | 392.99M | 392.99M | 385.76M | 346.74M | 257.41M | 144.76M |
Balance Sheet | ||||||
| Total Assets | 3.18B | 3.18B | 2.95B | 2.74B | 2.45B | 2.27B |
| Cash, Cash Equivalents and Short-Term Investments | 388.42M | 388.42M | 460.62M | 344.04M | 184.47M | 257.75M |
| Total Debt | 572.30M | 770.62M | 734.94M | 622.10M | 800.25M | 919.99M |
| Total Liabilities | 1.33B | 1.33B | 1.26B | 1.28B | 1.30B | 1.34B |
| Stockholders Equity | 1.84B | 1.84B | 1.69B | 1.46B | 1.15B | 932.55M |
Cash Flow | ||||||
| Free Cash Flow | 465.20M | 465.20M | 346.53M | 317.49M | 169.45M | 225.84M |
| Operating Cash Flow | 492.38M | 492.38M | 371.39M | 343.97M | 187.57M | 241.70M |
| Investing Cash Flow | -318.75M | -318.75M | -95.41M | -60.83M | -35.66M | -44.93M |
| Financing Cash Flow | -245.61M | -245.61M | -156.47M | -126.89M | -223.03M | -213.04M |
Applied Industrial Technologies Technical Analysis
Neutral
258.41
Price Trends
264.51
Negative
251.07
Positive
245.07
Positive
Market Momentum
-1.25
Positive
45.41
Neutral
14.19
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIT, the sentiment is Neutral. The current price of 258.41 is below the 20-day moving average (MA) of 261.88, below the 50-day MA of 264.51, and above the 200-day MA of 245.07, indicating a neutral trend. The MACD of -1.25 indicates Positive momentum. The RSI at 45.41 is Neutral, neither overbought nor oversold. The STOCH value of 14.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AIT.
Applied Industrial Technologies Risk Analysis
Applied Industrial Technologies disclosed 20 risk factors in its most recent earnings report. Applied Industrial Technologies reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Applied Industrial Technologies Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.99B | 24.25 | 20.33% | ― | 13.93% | 48.25% | |
78 Outperform | $10.50B | 16.90 | 13.78% | 0.82% | 1.30% | -1.09% | |
75 Outperform | $5.12B | 25.95 | 14.34% | 3.70% | -4.11% | -31.26% | |
73 Outperform | $9.76B | 25.52 | 22.24% | 0.68% | 1.88% | 2.91% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $1.37B | 353.82 | 0.65% | ― | 13.48% | ― | |
48 Neutral | $387.29M | 11.08 | -9.63% | ― | -8.12% | -204.81% |
* Industrials Sector Average
AIT
Applied Industrial Technologies
258.41
38.88
17.71%
DXPE
DXP Enterprises
126.97
74.96
144.13%
DSGR
Distribution Solutions Group
29.65
-8.61
-22.50%
MSM
MSC Industrial
91.99
13.09
16.59%
TITN
Titan Machinery
16.57
2.58
18.44%
WCC
Wesco International
215.87
53.33
32.81%
Applied Industrial Technologies Corporate Events
Private Placements and Financing
Applied Industrial Extends Securitization Facility to 2028
Neutral
Jul 11, 2025
On July 10, 2025, Applied Industrial Technologies, Inc. amended its accounts receivable securitization facility, extending its maturity to July 10, 2028, from the previous expiration date of August 4, 2026. This amendment involved changes to the Receivables Financing Agreement and the Purchase and Sale Agreement, with AIT Receivables LLC acting as the borrower and PNC Bank as the administrative agent. The transaction included customary fees paid by AIT Receivables to the lenders.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.