Applied Industrial Technologies Inc (AIT) stock analysis

P/E above its 5-year median

Applied Industrial Technologies's P/E of 26.7 is above its own 5-year median of 20.9.

P/E above the industry

Applied Industrial Technologies's P/E of 26.7 is above the Wholesale Trade-durable Goods median of 20.3.

EV/EBITDA above its 5-year median

Applied Industrial Technologies's EV/EBITDA of 19.8 is above its 5-year median of 16.3.

P/B above the industry

Applied Industrial Technologies's price-to-book of 5.84 is above the Wholesale Trade-durable Goods median of 2.15.

Trading above fair value

The share price of $301.48 is above our fair value estimate of $212.37.

Margin of safety under 20%

The price is 42.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 7.4% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 5.6% over the last twelve months, against a 5-year average of 23.4% a year.

Growing faster than the industry

Revenue grew 8.5% over the last twelve months; the Wholesale Trade-durable Goods median is 7.5%.

Guidance raised

Applied Industrial Technologies raised its fiscal 2026 year Total sales growth outlook on Apr 28, 2026.

Gross margin slipping

Gross margin was 30.4% over the last twelve months, against 30.4% a year earlier.

Return on equity over 15%

Return on equity was 22.5% over the last twelve months and averaged 24.1% over five years.

Return on capital over 10%

Return on invested capital was 21.0%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Applied Industrial Technologies's return on equity of 22.5% is above the Wholesale Trade-durable Goods median of 17.2%.

Earnings grew over 5 years

Net income grew 23.4% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 8.4% over the last twelve months, against a 5-year average of 8.0%.

Net margin above the industry

Applied Industrial Technologies's net margin of 8.4% is above the Wholesale Trade-durable Goods median of 5.0%.

Low debt

Debt is 15.0% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 88.8% five years ago to 15.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 160% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.89 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 10.10; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Applied Industrial Technologies paid dividends worth 0.7% of the share price over the last twelve months.

Yield below Treasuries

The 0.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Applied Industrial Technologies yields 0.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 17.4% of net income.

Covered by free cash flow

Dividends take 17.5% of free cash flow.