Is AAON, Inc. overvalued or undervalued?

As of 30 July 2025, the valuation grade for AAON, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently considered overvalued, with a P/E ratio of 50, an EV to EBITDA of 30.62, and a Price to Book Value of 9.64, all of which are substantially higher than its peers. For instance, Woodward, Inc. has a P/E of 42.20 and ITT, Inc. has a P/E of 26.26, highlighting AAON's relative overvaluation.
Despite its strong ROE of 19.47% and ROCE of 18.18%, the high valuation ratios suggest that the market may be pricing in excessive growth expectations. Over the past year, AAON's stock has declined by 8.55%, while the S&P 500 has returned 17.14%, reinforcing the notion that the stock may be overvalued given its underperformance relative to the broader market.