Applied Industrial Technologies (AIT) has just posted Q2 2026 results with revenue of US$1.2b and basic EPS of US$2.54, set against trailing twelve month EPS of US$10.65 on revenue of US$4.8b as the company extends its recent earnings run. Over the past six quarters, revenue has moved from US$1,073.0m in Q2 2025 to US$1,163.0m in Q2 2026, while quarterly EPS has ranged from US$2.40 to US$2.84 over that stretch, giving investors a clearer view of how the top and bottom lines have tracked together. With net profit margin at 8.5%, the latest print keeps the focus firmly on how durable these margins look over time.

See our full analysis for Applied Industrial Technologies.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the widely followed narratives around growth, quality, and risk for the stock.

TTM earnings growth steadies at 4.6%

• Over the last twelve months, earnings rose 4.6% to US$403.8 million on US$4.8b of revenue, with trailing EPS at US$10.65.
• What stands out for the bullish view that AIT is an "automation enabled industrial backbone" is how a 4.6% earnings increase and US$4.8b of revenue sit on top of a 5 year earnings growth rate of 22.7% per year, which:
  • Supports the idea of a long operating history translating into consistently positive earnings, not just a one off spike.
  • Lines up with the narrative that exposure to maintenance, repair and automation projects can help keep profit growing even as growth expectations are more modest at about 6.2% per year.

To see how this recent earnings run fits into the bigger growth story that bulls talk about, have a look at the full narrative and valuation breakdown for AIT. 📊 Read the full Applied Industrial Technologies Consensus Narrative.

Margins hold at 8.5% amid slower growth

• Net profit margin is 8.5% on the latest numbers, only slightly below last year’s 8.6%, while trailing revenue growth is expected at about 5.1% per year and earnings at roughly 6.2% per year.
• Critics who worry that an industrial distributor could see pressure on profitability get a mixed picture here, because:
  • The margin shift from 8.6% to 8.5% is small, yet it comes at a time when yearly earnings growth has moderated to 4.6% after running at 22.7% per year over five years.
  • Forecast revenue growth of 5.1% per year being below the wider US market’s 10.6% suggests that even with stable margins, AIT may not be growing as quickly as broad market expectations.

Premium valuation versus peers and DCF fair value

• The shares trade at US$262.34, with a P/E of 24.5x compared with a peer average of 20.9x and industry average of 22.9x, and a DCF fair value reference of US$240.64.
• Bears arguing that the stock is priced for perfection point straight to this setup, because:
  • The current price sits above the DCF fair value of US$240.64, even though forecast earnings growth of about 6.2% per year is not especially high compared with the broader market.
  • Paying a 24.5x P/E when peers sit closer to 20.9x and the industry around 22.9x means investors are accepting a premium while margins at 8.5% are only slightly different from last year’s 8.6%.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Applied Industrial Technologies's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

AIT combines an 8.5% net margin, 4.6% earnings growth and a 24.5x P/E, which sits above both peer and DCF reference levels.

If paying up for slower growth and a premium multiple makes you cautious, use our these 880 undervalued stocks based on cash flows to quickly focus on companies where pricing looks more conservative.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.