AAON, Inc. (NASDAQ:AAON) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on AAON too, with the stock up 54% to US$142 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, AAON's five analysts are now forecasting revenues of US$2.0b in 2026. This would be a major 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 61% to US$2.33. Before this latest update, the analysts had been forecasting revenues of US$1.7b and earnings per share (EPS) of US$1.98 in 2026. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

It will come as no surprise to learn that the analysts have increased their price target for AAON 11% to US$137 on the back of these upgrades.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AAON's past performance and to peers in the same industry. It's clear from the latest estimates that AAON's rate of growth is expected to accelerate meaningfully, with the forecast 31% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 21% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AAON is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, AAON could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with AAON, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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.