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AIT

NEUTRAL
$280.14 Live
Applied Industrial Technologies, Inc. · NYSE
Target $304.17 (+8.6%)
$199.96 52W Range $286.66

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AI Analysis

AI-powered fundamental assessment

Confidence
72%
The Advanced Deterministic Scorecard reveals a mixed fundamental picture: the Piotroski F-Score of 4/9 indicates stable but not robust financial health, while the absence of an Altman Z-Score prevents a clear distress risk assessment. Despite strong profitability metrics like ROE of 22.10% and solid earnings growth of 11.4%, the stock trades at a premium valuation (P/E 27.17 vs. sector avg 50.40) with weakening technical momentum (Technical Trend: 10/100). Insider selling worth $11.22M over the last six months raises caution, even as analysts maintain a strong_buy recommendation. The stock is priced above both the Graham defensive value ($107.64) and intrinsic estimate ($248.47), suggesting limited margin of safety.

Key Strengths

Consistent earnings beat streak with 3 out of last 4 quarters exceeding estimates and an average surprise of 6.42%
Strong return metrics: ROE of 22.10% and ROA of 10.42% significantly outperform sector averages
Healthy balance sheet with low Debt/Equity of 0.30 and strong liquidity (Current Ratio: 3.55)
Solid year-over-year revenue and earnings growth at 9.20% and 11.40%, respectively
Low dividend payout ratio of 16.84% provides room for future increases despite modest current yield

Key Risks

Piotroski F-Score of 4/9 suggests only moderate financial health, limiting downside protection
Absence of Altman Z-Score creates uncertainty in bankruptcy risk assessment
Valuation appears stretched with P/E of 27.17 and Price/Book of 5.61, especially relative to Graham Number of $107.64
Insider activity is bearish with $11.22M in net selling by executives over the past six months
Technical trend is weak at 10/100, indicating near-term price pressure despite long-term gains
AI Fair Value Estimate
Based on comprehensive analysis
$248.47
-11.3% below current price

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