For AI assistants & researchers — machine-readable summary of this page
What this page is: Delvantic's full research page for A. O. Smith Corporation (AOS) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Watch · Gem Score -3 (−100…+100 Quality+Value blend) · Quality 52 · Value -48 · Sentiment -6 (timing only, not weighted) · Composite fair value $67.86 vs $60.73 at analysis
Page map (sections in order; each card carries a stable
reference-name attribute you can cite):
profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
More for machine readers: site briefing at
/llms.txt ·
any ticker resolves at delvantic.com/stock/TICKER ·
raw inputs are public-company filings and market data (via licensed data feeds);
every model, score, lens read, and prediction on this page is Delvantic's own analysis.
A. O. Smith Corporation
AOS NYSEA. O. Smith Corporation is a global water technology company specializing in residential and commercial hot water and water treatment solutions. The company manufactures and markets gas and electric water heaters, boilers, heat pumps, storage tanks, and advanced water treatment systems for use in homes, businesses, institutions, and industrial facilities. Its products serve applications such as residences, restaurants, hotels, hospitals, schools, office buildings, and manufacturing sites, addressing both basic hot water needs and more complex water quality requirements. A. O. Smith operates through two main segments: North America and Rest of World, with a strong presence in China, Europe, and India. Its portfolio also includes point-of-entry and point-of-use filtration, softening, and reverse osmosis systems for both residential and commercial customers. Headquartered in Milwaukee, Wisconsin, and founded in 1874, A. O. Smith today plays a significant role in the building products and industrial equipment markets by providing reliable, energy-focused water heating and treatment solutions across approximately 80 countries.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 3.85
Total Equity: $1.86B
Shares: 141,914,840
Total Debt: $155.00M
Cash: $174.50M
EBITDA: $813.70M
Total Debt: $155.00M
Cash: $174.50M
Revenue: $3.83B
Revenue: $3.83B
Revenue: $3.83B
Total Equity: $1.86B
Tax Rate: 23.6%
Equity: $1.86B
Total Debt: $155.00M
Cash: $174.50M
Current Liabilities: $862.50M
Long-Term Debt: $112.70M
Total Debt: $155.00M
Total Equity: $1.86B
Shares: 141,914,840
Shares: 141,914,840
CapEx: -$70.80M
Shares: 141,914,840
Stock Price: $60.73
Net Income: $546.20M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 3, 2026 5:34pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.5B | $3.8B | $3.9B | $3.8B | $3.8B |
| Cost of Revenue | $2.2B | $2.4B | $2.4B | $2.4B | $2.3B |
| Gross Profit | $1.3B | $1.3B | $1.5B | $1.5B | $1.5B |
| Operating Expenses | $628.9M | $967.6M | $675.2M | $748.4M | $758.8M |
| Operating Income | $682.0M | $362.0M | $809.6M | $707.7M | $728.6M |
| Net Income | $487.1M | $235.7M | $556.6M | $533.6M | $546.2M |
| EBITDA | $759.9M | $438.9M | $887.9M | $786.5M | $813.7M |
| EPS | $3.05 | $1.52 | $3.71 | $3.65 | $3.87 |
| EPS (Diluted) | $3.02 | $1.51 | $3.69 | $3.63 | $3.85 |
Balance Sheet (Annual)
Last updated: Aug 3, 2026 5:13pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $443.3M | $391.2M | $339.9M | $239.6M | $174.5M |
| Total Current Assets | $1.8B | $1.6B | $1.5B | $1.4B | $1.3B |
| Total Assets | $3.5B | $3.3B | $3.2B | $3.2B | $3.1B |
| Current Liabilities | $1.1B | $934.2M | $945.3M | $897.2M | $862.5M |
| Long-Term Debt | $189.9M | $334.5M | $117.3M | $183.2M | $112.7M |
| Total Liabilities | $1.6B | $1.6B | $1.4B | $1.4B | $1.3B |
| Total Equity | $1.8B | $1.7B | $1.8B | $1.9B | $1.9B |
| Retained Earnings | $2.8B | $2.9B | $3.3B | $3.6B | $4.0B |
Cash Flow (Annual)
Last updated: Aug 3, 2026 5:34pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $641.1M | $391.4M | $670.3M | $581.8M | $616.8M |
| Capital Expenditure | -$75.1M | -$70.3M | -$72.6M | -$108.0M | -$70.8M |
| Free Cash Flow | $566.0M | $321.1M | $597.7M | $473.8M | $546.0M |
| Acquisitions (net) | -$207.6M | -$8.0M | -$16.8M | -$145.9M | $0 |
| Net Debt Issued / (Repaid) | $83.5M | $150.6M | -$218.1M | $69.7M | -$37.6M |
| Dividends Paid | -$170.1M | -$177.2M | -$183.5M | -$190.4M | -$195.7M |
| Stock Buybacks | -$366.5M | -$403.5M | -$306.5M | -$305.8M | -$400.8M |
| Net Change in Cash | -$129.8M | -$52.1M | -$51.3M | -$100.3M | -$65.1M |
Growth Trends (YoY %)
Last updated: Aug 3, 2026 5:34pm (20d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +6.1% | +2.6% | -0.9% | +0.3% |
| Gross Profit Growth | +1.4% | +11.7% | -1.9% | +2.1% |
| Operating Income Growth | -46.9% | +123.6% | -12.6% | +3.0% |
| Net Income Growth | -51.6% | +136.1% | -4.1% | +2.4% |
| EBITDA Growth | -42.2% | +102.3% | -11.4% | +3.5% |
Dividend History (Last 20)
Last updated: Aug 3, 2026 5:13pm (20d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-31 | $0.36 | — | — | — |
| 2026-04-30 | $0.36 | — | — | — |
| 2026-01-30 | $0.36 | — | — | — |
| 2025-10-31 | $0.36 | — | — | — |
| 2025-07-31 | $0.34 | — | — | — |
| 2025-04-30 | $0.34 | — | — | — |
| 2025-01-31 | $0.34 | — | — | — |
| 2024-10-31 | $0.34 | — | — | — |
| 2024-07-31 | $0.32 | — | — | — |
| 2024-04-29 | $0.32 | — | — | — |
| 2024-01-30 | $0.32 | — | — | — |
| 2023-10-30 | $0.32 | — | — | — |
| 2023-07-28 | $0.30 | — | — | — |
| 2023-04-27 | $0.30 | — | — | — |
| 2023-01-30 | $0.30 | — | — | — |
| 2022-10-28 | $0.30 | — | — | — |
| 2022-07-28 | $0.28 | — | — | — |
| 2022-04-28 | $0.28 | — | — | — |
| 2022-01-28 | $0.28 | — | — | — |
| 2021-10-28 | $0.28 | — | — | — |
Deep Analysis
Risk : Reward — if the last quarter repeats
Live · as of 2026-08-19 08:30Even the bull case prices 49% below today — the ratio here measures the model-vs-market gap, not payoff odds. Another quarter like the worst recent one costs 62%.
| Case | Growth | Margin | Fair value | vs price ($60.73) |
|---|---|---|---|---|
| Bull — recovery | -0% | 15.1% | $31.23 | -49% |
| Base — stabilizes | -1% | 13.2% | $27.30 | -55% |
| Bear — keeps slipping | -1% | 11.2% | $23.47 | -61% |
| Stress — last quarter repeats | -1% | 10.7% | $23.04 | -62% |
Narrative Economics
market-narrative step).
Claude Reading
The raw quarterly tape tells a clearer story than the annual smoothing suggests: revenue has drifted from $1.02B in Q2 2024 to $945.6M in Q1 2026, and net income has compressed from $156.2M to $118.0M over the same eight quarters — a ~24% earnings decline peak-to-trough while margins slid from 15.2% to 12.5%. This is not a "steady compounder" in real time; it's a business in a mild but persistent earnings recession. The five-year annual view masks this because 2023's $556.6M NI was the peak and 2025's $546.2M looks flat, but the intra-year trajectory through 2026 Q1 is decidedly down. Free cash flow of $546M against an $8.25B market cap gives a ~6.6% FCF yield, and with $155M debt vs $174M cash, the balance sheet is essentially net-cash-neutral with fortress-grade 29% ROE and 30% ROIC. That combination — deteriorating operating momentum on top of pristine capital structure and elite returns on capital — is the actual investment question.
The synthesis verdict of $71.81 fair value (+18% upside) leans heavily on DCF anchoring to normalized cash flows, but I'd argue the composite is too generous given what the last four quarters actually show. Q1 2026 net margin of 12.5% is 270bps below the Q2 2025 peak of 15%, and if that's the new run-rate rather than a trough, normalized earnings are closer to $475-490M, not $546M. On $480M normalized NI, a 15.8x multiple gets you $7.6B market cap, or roughly $56/share — below current price. The synthesis and market-forces reads correctly identify cyclical/China pressure but treat it as "priced in"; the decelerating quarterly trend argues it's still working through the P&L. I partially dissent: the fair value band is $55-65, not $70+, and current $60.73 is closer to fairly valued than meaningfully undervalued.
The contrarian bull case worth engaging: AOS has survived four decades of cycles, converts 89% of net income to free cash flow ($546M FCF / $546M NI in 2025 — remarkably clean), carries almost no debt, and pays a 2.4% dividend with a 36% payout ratio leaving ample room. If US residential replacement demand normalizes and China stabilizes, 15% margins return and $650M+ earnings power reemerges — at 17x that's $75+. The insider data is unusable (all awards, no open-market buys, and dates stamped 2026 which is suspicious data hygiene — the file appears to be dated forward, so treat quarterly labels with mild skepticism too). The narrative-economics read that "fundamentals are doing all the work" is correct and is precisely why there's no asymmetric setup here: no story premium to collapse, no story discount to close. You're buying a bond-like industrial at a fair coupon.
Where the models are weakest: the pre-flight thesis calls this "traditional/mature earner" and moves on, but doesn't stress-test whether 14% net margins are structural or cycle-peak. History suggests cycle-peak — 2022 net margin was 6.3% during supply-chain dislocation, and 2021 was 13.8%. The 2023-2024 average around 14% may be the ceiling, not the mean. Second, the "sector leader" tag is accurate but AOS's water heater business is genuinely commoditizing at the low end (Rheem, Bradford White competition) and the heat-pump transition is capex-intensive with uncertain share outcomes. Third, revenue CAGR of -0.3% over five years on a company with 29% ROE means capital is being returned rather than reinvested for growth — great for shareholders in a stable regime, dangerous if terminal growth assumptions in the DCF are above 2%. I'd want to see one clean quarter of sequential revenue and margin reacceleration before paying above $60. At $55 this is a table-pound; at $61 it's a hold-and-collect-the-dividend; above $70 you're paying for a China recovery that hasn't shown up in the numbers.
GPT Reading
A. O. Smith looks like a very good business priced about where it should be, not an obvious bargain. The core fact pattern is stagnation wrapped in excellent economics. Annual revenue was $3.85B in 2023, $3.82B in 2024, and $3.83B in 2025; that is essentially no top-line growth over three years. Yet net income held in a tight band of $534M-$557M in 2023-2025, with 2025 free cash flow of $546M almost exactly matching net income. That cash conversion matters: at a $8.25B market cap, the stock is trading around a 6.6% FCF yield, with net cash on the balance sheet once you offset $155M of debt against $174.5M of cash. For an industrial with 30% ROIC and 29% ROE, that is respectable. But the market is not missing some hidden growth engine here. It is paying roughly 15.8x earnings and 10.1x EV/EBITDA for a company whose revenue CAGR is slightly negative and whose earnings CAGR is also slightly negative.
The quarterly numbers reinforce the “high-quality flatliner” view more than the “cyclical rebound” view. March 2026 revenue of $945.6M was actually below March 2025’s $963.9M, while net income fell from $136.6M to $118.0M and margin dropped from 14.2% to 12.5%. That is not disastrous, but it is a real deterioration in the most recent print. Even looking across the last four reported quarters, revenue of roughly $3.81B annualized is still stuck near the same range as the last several years, and margins seem to have eased from the mid-2025 peak: net margin moved from 15.0% in June 2025 and 14.0% in September 2025 down to 13.7% in December and 12.5% in March 2026. If this were a recovery story, I would expect clearer volume or mix acceleration. Instead I see a replacement-cycle business that remains durable but mature, with limited evidence that current profitability can expand much from here.
What stands out most positively is the resilience after the ugly 2022 trough. Operating income collapsed to $362M in 2022 from $682M in 2021, then snapped back to $810M in 2023 and stayed around $708M-$729M in 2024-2025. That tells you the franchise is stronger than one bad year suggested. Gross margin of 38.8% and operating margin of 19.0% are very healthy for an industrial manufacturer, and capex needs are light at just $70.8M against $616.8M of operating cash flow. This is why I do not get bearish at $60.73: the company does not need growth to justify a decent portion of today’s valuation. A stable $500M-plus annual earnings base, a modest dividend, and likely buyback capacity can support shareholder returns. But that same strength is why I also hesitate to call it clearly undervalued; quality is visible and already capitalized in a 4.6x book multiple and low-teens enterprise yield metrics.
The best counterargument is that I am underrating how cheap elite industrial quality can look when growth is temporarily suppressed. If A. O. Smith can merely hold earnings around $540M-$560M and resume even low-single-digit revenue growth, a 15.8x P/E could rerate toward 18x, which alone would imply a stock in the high $60s to low $70s. Bulls would also point out that 2025 net income of $546.2M exceeded 2024’s $533.6M despite flat revenue, showing pricing, mix, and cost control still work. They would note EV/revenue of 2.15x and EV/EBITDA near 10x are not demanding for a category leader with near-zero net debt and strong replacement-driven demand. I weigh those points less heavily because the latest quarter did not confirm upward momentum; if anything, it suggested the 2025 margin profile may have been closer to the top of the range than the start of a new climb.
What would change my mind is pretty straightforward. I would turn more constructive if the next two quarters show revenue sustainably back above $1.0B and net margins recovering into the 14%-15% band, because that would indicate the recent softness was temporary and earnings power is moving back toward the 2023-2025 high end. I would also reassess upward if annual revenue finally breaks out above the $3.8B-$3.9B ceiling without sacrificing margins, since that would justify a premium multiple. On the downside, if quarterly net income keeps tracking near the March 2026 run rate and full-year earnings power slips toward $480M-$500M, then even 15.8x earnings is too generous and fair value drifts into the low-to-mid $50s.
Grok Reading
A. O. Smith is a cash-compounding industrial that has stopped growing. Annual revenue sits at $3.83B in 2025, essentially unchanged from $3.82B in 2024 and $3.85B in 2023; the multi-year revenue CAGR is −0.3% and free-cash-flow CAGR is −4.4%. What the numbers still deliver, however, is quality: 2025 operating margin of 19.0%, net margin of 14.3%, ROE of 29.4% and ROIC of 30.3%, with free cash flow of $546M nearly identical to net income and a balance sheet that is net-cash ($174.5M cash against $155M debt, D/E 0.08). At $60.73 the stock trades at 15.8× earnings, 10.1× EV/EBITDA and 2.15× EV/sales—multiples that look cheap for a 30% ROIC franchise and only modestly expensive for a zero-growth one. The most recent quarter (rev $945.6M, NI $118M, margin 12.5%) shows sequential margin compression from the mid-teens that characterized 2025, so the market is correctly pricing some cyclical and China risk, but not so much that a high-teens free-cash-flow yield on enterprise value is erased.
The story the raw data tell is therefore a fortress mature earner trading at a discount to the quality of its capital returns, not a growth story that has disappointed. Replacement-driven North American water-heater demand and a still-profitable (if slower) international footprint continue to throw off cash that management returns via a 2.4% dividend at a conservative 36% payout. Insider activity is pure award noise; there is no selling signal. Relative to the valuation synthesis fair-value anchor near $72, the roughly 18% gap is real and is explained almost entirely by the market’s refusal to pay up for flat top-line rather than by any deterioration in the earnings power itself. I weigh the ROIC durability and net-cash position more heavily than the growth drought: businesses that earn thirty cents on every incremental dollar of capital and convert nearly all of it to free cash rarely stay at 15.8× forever unless the franchise is structurally impaired, and the data do not yet show impairment—only stagnation.
The strongest case against this read is straightforward and quantitative. Revenue has gone nowhere for three years, FCF is declining at a mid-single-digit rate, and the latest quarter’s 12.5% net margin is the weakest print in the eight-quarter stack outside the 2024 year-end trough. If China remains a multi-year drag and U.S. housing turnover stays depressed, the “steady compounder” narrative collapses into a slow bleed, and 15.8× trailing earnings becomes a value trap rather than a bargain—especially once any multiple compression from further margin erosion is layered on. A smart opponent would also note that 2022 already demonstrated how quickly operating profit can halve (from $682M to $362M) when the cycle turns, so the current 19% operating margin is not a floor. I discount that bear case because the balance sheet can absorb a downturn without stress, the payout ratio leaves ample room to defend the dividend, and the stock already embeds low-growth expectations; the downside is therefore more about time and opportunity cost than permanent capital loss. Still, the absence of any re-acceleration catalyst keeps conviction from rising above moderate.
What would flip the verdict is two consecutive quarters of positive organic revenue growth above 3% together with net margins re-expanding through 14%, which would confirm the cycle trough and justify a re-rating toward the high-teens P/E; conversely, another quarter of sub-13% net margin or a full-year revenue decline greater than 2% would push the stock into fairly-valued-to-expensive territory at $60 and force a lower target.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
AOS throws off consistent free cash flow ($546M in the latest year, $321-598M range over five years) on a stable ~$3.8B revenue base. Operating margins have re-set into the high-teens/low-20s (19.3, 9.6, 21.0, 18.5, 19.0) after a 2022 dip, gross margin has actually improved to 38.8% from 37%, and net income has recovered and stabilized near $535-556M. Earnings quality checks are clean: OCF/NI 1.28x, accruals -3.3% of assets, Beneish M at -2.52, and Altman Z of 7.76 firmly in the safe zone. Balance sheet is a fortress-lite: $193M cash, $38M net cash, no external funding needs. Capital return discipline is a real strength - diluted shares fell from 161.3M to 141.9M (-3.2% CAGR, ~12% cumulative shrink over four years), so per-share value is being concentrated rather than diluted. Insider tape is neutral: essentially all activity is routine awards and tax withholding, with only one small $82K open-market sale - no directional signal either way. The clear soft spot is growth: revenue has been $3.75-3.85B for four straight years - this is a mature, cyclical water-heater/boiler franchise, not a compounder. The 2022 operating margin collapse to 9.6% also shows the business is not immune to input-cost/demand shocks.
Verify before trusting this (5)
- Segment mix and China exposure in water heater/boiler business - key to durability read
- Working capital drivers behind the 2024 FCF dip to $474M
- Whether the 10-K flags any material customer concentration or channel risk
- Details of the 2022 margin compression (steel costs vs. price/volume) to gauge pricing power
- Pension and warranty liability trends not visible in the summary financials
The e2e composite fair value of $72.26 implies ~18% upside, but that number is dragged up by an anchored-PE method spitting out $163.97, which is not credible for a flat-topline mature industrial and should be heavily discounted. The two grounded methods - DCF at $43.43 and EPV floor at $38.21 - actually sit ~30-37% BELOW the current $60.73 price, suggesting the cash-flow math alone does not support today's quote. Splitting the difference and giving credit for the Strong quality lens (clean earnings, low leverage, ~3%/yr buyback) gets me to a deserved value in the mid-$50s to low-$60s. That is essentially where the stock trades.
Verify before trusting this (4)
- China water treatment segment growth trajectory in next 1-2 quarters
- North America water heater volume vs price mix - is growth purely price?
- Capital return pace - buyback authorization utilization and any M&A that would change the per-share math
- Any one-time items in recent EPS that inflate the anchored-PE input
AOS sits in the sentiment dead zone: a steady-compounder archetype with minimal narrative intensity and low cult coefficient. There is no bull mania to unwind and no bear thesis being aggressively pressed - the market is letting fundamentals do the talking, which is exactly what happens to mature industrials without a story. The tape is mildly constructive (regime score +22, VIX 16, S&P near highs), so at beta 1.15 there is a whisper of tailwind from risk-on flow, but nothing sector-specific is rotating into specialty industrial machinery. Recent news flow is genuinely mixed and cancels out: Q2 beat revenue expectations, buyback lifted, full-year outlook updated - all modest positives - offset by Oppenheimer flagging near-term earnings risk, margin compression, and continued China weakness. Analyst tone is cautious-constructive rather than euphoric or capitulatory. Net: this is a name being priced on numbers, not narrative, so sentiment pressure is close to neutral with a very slight positive lean from the dividend-grower income narrative getting a passing mention.
Verify before trusting this (4)
- Whether China water treatment demand stabilizes in H2 or worsens - a real crack there flips sentiment negative
- Any sell-side upgrades or target revisions post-Q2 that could shift analyst tone from cautious to constructive
- Rotation into defensive industrials or dividend growers if the tape turns risk-off
- Guidance revisions on the next print given the 'near-term earnings risk' framing
This lens hasn't been run for this ticker yet.
When we made this prediction on Aug 4, 2026, AOS was $60.73. We expect it to be $65.10 by Feb 2027, and we consider it great value under $52.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 4, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.