A. O. Smith Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
A.
O. Smith remains a hold: the valuation case has grown more compelling as the stock has fallen to $55.34 (as of 7 Oct), trading at a PE of 15.85 versus a peer median of 31.11 and an EV/EBITDA of 11.42 versus 18.62, while generating $546M in FY2025 free cash flow with just $192M of total debt against $1.86B in equity. However, the growth case is still absent — FY2025 revenue of $3.83B grew only 0.3% YoY, and the first two quarters of 2026 show continued slight revenue declines (Q1 -1.9% YoY, Q2 -0.7% YoY), with RSI at 33.6 and the stock trading below both its 50-day ($59.79) and 200-day ($64.19) moving averages. The upcoming Q3 2026 earnings call on October 29 is the next real catalyst to assess whether North America boiler strength can offset persistent China weakness and stabilize the top line.
What could go wrong
- Revenue stagnation persists. Revenue has been range-bound at $3.75–3.85B for five years (FY2021–FY2025), and H1 2026 quarterly revenue is still declining slightly YoY (-1.9% in Q1, -0.7% in Q2).
- China/Rest of World deterioration. Prior verdict noted Rest of World sales fell 19% in Q2 2026 on continued China consumer weakness; news flow consistently cites China weakness as an ongoing headwind.
- Technical breakdown. Stock at $55.34 is below both 50-day MA ($59.79) and 200-day MA ($64.19) with RSI at 33.6, suggesting bearish momentum though approaching oversold territory.
- Insider selling. Over the trailing 24 months, insiders net sold 43,494 shares worth ~$3.1M with zero open-market purchases; recent activity is dominated by RSU grants rather than discretionary buying.
What would change my mind
Where this comes from: peer comparison · FY25 fundamentals · Q1–Q2 FY26 results · technicals, 7 Oct. Orin's read on AOS; not advice.
How has the share price moved?
Down 9.5% over twelve months, from $68.61 on 27 Oct 2025 to $62.06 at the Tue 27 Oct 2026 close. Its highest close in that time was $80.47 on 10 Feb 2026; the last close is 22.9% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 4.6M, on 30 Apr 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All AOS filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| FMR | $653.4M | 0.0% |
| BlackRock | $505.3M | 0.0% |
| Vanguard Capital Management | $457.0M | 0.0% |
| Vanguard Portfolio Management | $442.3M | 0.0% |
| State Street | $412.8M | 0.0% |
| Invesco | $347.2M | 0.0% |
| Geode Capital Management | $233.7M | 0.0% |
| Morgan Stanley | $170.4M | 0.0% |
| Earnest Partners | $123.7M | 0.4% |
| Bank of America | $97.2M | 0.0% |
73 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 87 Form 4 filings; open-market trades net −$3.1M. Of the 50 on hand, 0 were open-market purchases and 2 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about AOS
Orin answers questions about AOS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 17.3× its last 12 months of profit (Tue 27 Oct close) — lower than in all 5 of its last 5 fiscal years (middle 22.2×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 17.3×below usual | 22.2× | 33.7× |
| P/S | 2.22×below usual | 2.63× | — |
| EV/EBITDA | 11.8×below usual | 14.8× | — |
| P/B | 4.7×below usual | 5.3× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $67 (from $59 to $72) — 8% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$67
$59 – $72 · +8% against the last close
- 1 buy or overweight
- 5 hold
- 2 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 17.3× its last 12 months of profit; the middle P/E of the 5 companies it is compared to that made a profit is 21.8×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| AOSA. O. Smith Corporation | $8B | 17.3× | 11.8× | 38.6% | 13.1% | 27% |
| FELEFranklin Electric Co., Inc. | $4B | 21.8× | 14.6× | 35.4% | 8.8% | 14% |
| PNRPentair plc | $10B | 16.4× | 12.7× | 41.2% | 15.4% | 16% |
| WTSWatts Water Technologies, Inc. | $12B | 26.0× | 17.0× | 50.5% | 16.0% | 21% |
| XYLXylem Inc. | $22B | 20.5× | 16.9× | 39.3% | 15.7% | 10% |
| ZWSZurn Elkay Water Solutions Corporation | $8B | 28.2× | 21.1× | 47.1% | 16.3% | 18% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 17.3× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now17.3×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $82 a share — 33% above the $61.86 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $82 | 33% above $61.86 |
| Levered | $57 | 8% below $61.86 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.