A.O. Smith Stock Makes 52 Week Low as Earnings Fail To Spark

A.O. Smith Corporation (NYSE: AOS) has seen its stock hit a new 52-week low during yesterday's session, hitting $65.53 per share before stabilising slightly to close at $67.31. With a 13.27% over the past year, the company's market cap now stands at $8 billion, with a price-to-earnings (P/E) ratio just shy of 18.

Earnings came in light, with an EPS of $0.85 against analysts consensus of $0.89, coming on the back of a revenue miss ($912.4 million vs $953.9 million expected). The company pointed to weakened demand in China impacting consumer demand, alongside North American water heater demand.

The guidance also failed to impress, with the firm seeing FY25 revenue between $3.8 to $3.9 billion, with markets expecting $3.86 billion.

“We expect our full-year EPS to be between $3.60 and $3.90, slightly higher than 2024 at the mid-point. In North America, we anticipate water heater industry unit volumes to be flat year-over-year with less first half versus second half volatility compared to 2024.”

Kevin Wheeler, chairman and chief executive officer

The company continues to look for new ways to drive revenue, and is set to acquire Pureit from Unilever for $120 million, aiming to expand its water treatment portfolio in South Asia. In the last reported period, A.O. Smith achieved $3.89 billion in revenue and maintained a healthy profit margin of 38.2%.

Zooming out a little gives a different perspective on the stock, with 2 very strong years from September 2022 to late September 2024 brining an increase in share price of 86%. Since then however the stock has shed more than 25%, as the company looks to readjust and deal with current economic conditions.

Analysts remain on-side for the time being, with the consensus of $78.72 more than 12% above current price action. The current low mark of $60, and high of $95 go some way to showing the lines of separation between bulls and bears when it comes to AOS. New 52 week lows are not typically considered a great signal, with the bulls looking to find a support level that can hold firm.