# Applied Industrial Technologies (AIT.US)

Canonical: https://gigainvestors.com/s/AIT

Analysis as of: 2026-10-16T07:26:20.222Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $333.83 per share; close as of 2026-10-15.

Estimated value: low $181.37 per share, central $264.23 per share, high $310.44 per share. Buy at or below the central value $264.23 per share. Valuation as of 2026-10-16T07:26:20.222Z; scenarios are not confidence intervals.

Expected annual return: 8.6% at the stated quote. About 8.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.32×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.07×

- FY2018: 0.07×

- FY2019: 0.07×

- FY2020: 0.03×

- FY2021: 0.06×

- FY2022: 0.09×

- FY2023: 0.11×

- FY2024: 0.11×

- FY2025: 0.11×

- FY2026: 0.11×

### moat: pass

- ROIC, median of available years: 21.3%

- ROIC, second-lowest year: 14.5%

- Typical minus recent gross margin: -1.3 pp

- Typical gross margin (annual median): 29.0%

- Recent gross margin (lower of latest and 3-year median): 30.3%

- Years with nonpositive capital: 0

- Capital spending / revenue: 0.6%

- ROIC including acquisitions, ten-year median: 15.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 19.3%

- FY2018: 14.5%

- FY2019: 16.0%

- FY2020: 6.0%

- FY2021: 16.2%

- FY2022: 23.2%

- FY2023: 31.5%

- FY2024: 28.6%

- FY2025: 29.4%

- FY2026: 27.7%

### economics: pass

- Owner earnings / net income, 5-yr: 1.09×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.0B

- Net income, five-year total: $1.8B

- Return on incremental invested capital: 239.3%

- Working capital / revenue, annual change: -0.1 pp

- Working capital / revenue, change between three-year averages: -0.8 pp

- Working capital / revenue, final three-year average: 21.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.14×

- FY2023: 1.08×

- FY2024: 1.07×

- FY2025: 1.08×

- FY2026: 1.10×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 16.0% vs 28.6%

- Per-share earnings: 3.40 to 10.12 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.4%

- Ordinary dilution, 5-year annual growth: -0.7%

- Market cap gain: $10B

- Cumulative retained earnings: $1.8B

- Diluted shares, 10-year annual growth: -0.4%

- Diluted shares, 5-year annual growth: -0.7%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 14.6%

- Per-share value change: $6.73

- Per-share value, starting three-year median: $3.40

- Per-share value, ending three-year median: $10.12

- Buybacks concentrated in cheaper years (correlation): -0.90

- Average buyback yield: 0.9%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $947M

- Cumulative net income, 10 years: $2.4B

- ROIC, first three-year median: 16.0%

- ROIC, last three-year median: 28.6%

Chart: Earnings per share; fiscal year observations.

- FY2017: $3.40

- FY2018: $3.61

- FY2019: $3.68

- FY2020: $0.62

- FY2021: $3.68

- FY2022: $6.58

- FY2023: $8.84

- FY2024: $9.83

- FY2025: $10.12

- FY2026: $10.95

### accounting: pass

- Sloan accruals: -2.3%

- Receivables to sales index (DSRI): 1.03×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 2.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.17×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.55×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -2.2%

- FY2018: -0.2%

- FY2019: -1.6%

- FY2020: -11.9%

- FY2021: -4.3%

- FY2022: 2.8%

- FY2023: 0.1%

- FY2024: 0.5%

- FY2025: -3.1%

- FY2026: -2.3%

## Holders

- [Henry Ellenbogen](https://gigainvestors.com/DCP): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 10.4% a year for ten years · sales +8.8%

Story as of 2026-10-16T09:58:15.842Z; price observation 2026-10-15.

Price needs cash profits to grow 10.4% a year for ten years

- 2026-04-28: Applied Industrial Boosts FY26 Outlook; Declare Dividend; Authorizes $3 Mln Share Buyback - Update ([nasdaq.com](https://www.nasdaq.com/articles/applied-industrial-boosts-fy26-outlook-declare-dividend-authorizes-3-mln-share-buyback))

### Sales · FY2025–2026

sales +8.8%; source https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm; observed 2026-08-13.

- FY2017: $2.6B 

- FY2018: $3.1B 

- FY2019: $3.5B 

- FY2020: $3.2B 

- FY2021: $3.2B 

- FY2022: $3.8B 

- FY2023: $4.4B 

- FY2024: $4.5B 

- FY2025: $4.6B 

- FY2026: $5.0B 

### Gross margin · FY2026

gross margin 30.3%; source https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm; observed 2026-08-13.

- FY2017: 28.4% 

- FY2018: 28.8% 

- FY2019: 29.0% 

- FY2020: 28.9% 

- FY2021: 28.9% 

- FY2022: 29.0% 

- FY2023: 29.2% 

- FY2024: 29.8% 

- FY2025: 30.3% 

- FY2026: 30.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in industrial distribution; annual sales are USD 5 billion.

- Source: https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm (filed 2026-08-13); FY2026: revenue 4966686000; grossProfit 1506785000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AIT.US: Applied Industrial Technologies, Inc. distributes industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies in the United States, Canada, Mexico, Australia, New Zealand, Singapore, and Costa Rica. It operates in two segments, Service Center and Engineered Solutions. The Service Center segment distributes industrial bearings, power transmission, fluid power components and systems, specialty flow control, and advanced factory automation solutions, as well as general maintenance products; and motors, belting, drives, couplings, pumps, linear motion, hydraulic and pneumatic components, filtration supplies, hoses, and other related supplies. It also installs, modifies, and repairs conveyor belts and rubber linings, as well as hose assemblies. The Engineered Solutions segment is involved in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic fluid power technologies, engineered flow control products and services, and automation technologies; and provision of fluid power and industrial flow control products. Its fluid power products and solutions are used in off-highway mobile equipment, stationary industrial equipment and machines, marine and offshore equipment, factory automation, food processing equipment, packaging operations, and downstream energy process systems. This segment also offers pumps, valves, fittings, hoses, process instrumentation, actuators, and filtration supplies; and advanced automation technologies for the design, engineering, assembly, integration, and distribution of machine vision, collaborative robots, mobile robots, radio-frequency identification, industrial networking, motion control, and machine learning technologies for OEMs, machine builders, integrators, and other industrial and technology sectors. The company was formerly known as Bearings, Inc. and changed its name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.

### Why customers stay

Margins ranged from 29.8% to 30.3% during 2024–26; it earns 21.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2024: grossProfit / revenue = 29.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2025: grossProfit / revenue = 30.3%.

- Source: https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm (filed 2026-08-13); FY2026: grossProfit / revenue = 30.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); 10-year return on capital observations [[2017,0.19296517070061173],[2018,0.14494103522693805],[2019,0.15957791001554317],[2020,0.05974353068521958],[2021,0.16233409472852006],[2022,0.23239644895783088],[2023,0.3149446217999415],[2024,0.2857572249812307],[2025,0.2942565506905259],[2026,0.2765242499787789]]; median 0.2126808098292213. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 29% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm (filed 2026-08-13); Gross margin observations: [[2021,0.28910612410261194],[2022,0.2904775950513767],[2023,0.29164402417153396]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 317.2 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2017: growth capex 0; upkeep 17045000; owner earnings 156542000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2018: growth capex 0; upkeep 23230000; owner earnings 168258000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2019: growth capex 0; upkeep 18970000; owner earnings 187142000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2020: growth capex 0; upkeep 20115000; owner earnings 66676000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2021: growth capex 0; upkeep 15852000; owner earnings 184050000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2022: growth capex 0; upkeep 18124000; owner earnings 292845000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2023: growth capex 0; upkeep 26476000; owner earnings 373334000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2024: growth capex 0; upkeep 24864000; owner earnings 413252000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); FY2025: growth capex 0; upkeep 27187000; owner earnings 426281000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm (filed 2026-08-13); FY2026: growth capex 0; upkeep 23565000; owner earnings 456907000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); Dividend observations: [[2017,44619000],[2018,45858000],[2019,47266000],[2020,48873000],[2021,50664000],[2022,51805000],[2023,53446000],[2024,55879000],[2025,63702000],[2026,72598000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm (filed 2026-08-13); FY2026: cash repurchases 317218000 USD.

### Are managers owners

Insiders own 0.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AIT.US SharesStats.PercentInsiders = 0.791 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10.4% yearly over ten years; actual growth was 23.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-13); Ten-year compound average after fade. Initial solved rate 0.17956119310225. Price 333.83; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2016 owner earnings/share 1.4694420513860031 → FY2026 12.069287053913412. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $50.80 per share

- 2016-11: $59.85 per share

- 2016-12: $59.40 per share

- 2017-01: $60.45 per share

- 2017-02: $63.05 per share

- 2017-03: $61.85 per share

- 2017-04: $64.00 per share

- 2017-05: $61.75 per share

- 2017-06: $59.05 per share

- 2017-07: $56.50 per share

- 2017-08: $57.00 per share

- 2017-09: $65.80 per share

- 2017-10: $63.65 per share

- 2017-11: $63.95 per share

- 2017-12: $68.10 per share

- 2018-01: $73.75 per share

- 2018-02: $70.40 per share

- 2018-03: $72.90 per share

- 2018-04: $63.95 per share

- 2018-05: $69.75 per share

- 2018-06: $70.15 per share

- 2018-07: $74.65 per share

- 2018-08: $77.05 per share

- 2018-09: $78.25 per share

- 2018-10: $65.73 per share

- 2018-11: $65.23 per share

- 2018-12: $53.94 per share

- 2019-01: $59.01 per share

- 2019-02: $58.14 per share

- 2019-03: $59.47 per share

- 2019-04: $59.94 per share

- 2019-05: $54.33 per share

- 2019-06: $61.53 per share

- 2019-07: $60.84 per share

- 2019-08: $53.39 per share

- 2019-09: $56.80 per share

- 2019-10: $59.84 per share

- 2019-11: $63.85 per share

- 2019-12: $66.69 per share

- 2020-01: $64.57 per share

- 2020-02: $58.99 per share

- 2020-03: $45.72 per share

- 2020-04: $52.39 per share

- 2020-05: $58.00 per share

- 2020-06: $62.39 per share

- 2020-07: $63.12 per share

- 2020-08: $60.21 per share

- 2020-09: $55.10 per share

- 2020-10: $61.05 per share

- 2020-11: $78.43 per share

- 2020-12: $77.99 per share

- 2021-01: $70.39 per share

- 2021-02: $85.37 per share

- 2021-03: $91.17 per share

- 2021-04: $95.66 per share

- 2021-05: $97.96 per share

- 2021-06: $91.06 per share

- 2021-07: $89.70 per share

- 2021-08: $88.81 per share

- 2021-09: $90.13 per share

- 2021-10: $97.48 per share

- 2021-11: $95.04 per share

- 2021-12: $102.70 per share

- 2022-01: $97.98 per share

- 2022-02: $101.10 per share

- 2022-03: $102.66 per share

- 2022-04: $104.69 per share

- 2022-05: $103.41 per share

- 2022-06: $96.17 per share

- 2022-07: $100.59 per share

- 2022-08: $106.02 per share

- 2022-09: $102.78 per share

- 2022-10: $124.38 per share

- 2022-11: $132.49 per share

- 2022-12: $126.03 per share

- 2023-01: $143.21 per share

- 2023-02: $142.86 per share

- 2023-03: $142.13 per share

- 2023-04: $135.66 per share

- 2023-05: $122.96 per share

- 2023-06: $144.83 per share

- 2023-07: $144.99 per share

- 2023-08: $154.37 per share

- 2023-09: $154.61 per share

- 2023-10: $153.51 per share

- 2023-11: $160.07 per share

- 2023-12: $172.69 per share

- 2024-01: $176.46 per share

- 2024-02: $189.89 per share

- 2024-03: $197.55 per share

- 2024-04: $183.25 per share

- 2024-05: $193.00 per share

- 2024-06: $194.00 per share

- 2024-07: $218.19 per share

- 2024-08: $205.12 per share

- 2024-09: $223.13 per share

- 2024-10: $231.59 per share

- 2024-11: $274.72 per share

- 2024-12: $239.47 per share

- 2025-01: $260.03 per share

- 2025-02: $250.58 per share

- 2025-03: $225.34 per share

- 2025-04: $243.28 per share

- 2025-05: $226.52 per share

- 2025-06: $232.45 per share

- 2025-07: $271.50 per share

- 2025-08: $263.58 per share

- 2025-09: $261.05 per share

- 2025-10: $257.09 per share

- 2025-11: $258.82 per share

- 2025-12: $256.77 per share

- 2026-01: $260.41 per share

- 2026-02: $282.58 per share

- 2026-03: $265.32 per share

- 2026-04: $305.75 per share

- 2026-05: $303.81 per share

- 2026-06: $338.15 per share

- 2026-07: $345.21 per share

- 2026-08: $323.98 per share

- 2026-09: $332.29 per share

- 2026-10: $333.83 per share

## Annual estimated value (USD per share)

- FY2017: low $40.58 per share, central $48.34 per share, high $56.07 per share

- FY2018: low $46.35 per share, central $55.15 per share, high $64.20 per share

- FY2019: low $57.20 per share, central $70.08 per share, high $81.56 per share

- FY2020: low $54.24 per share, central $61.00 per share, high $70.00 per share

- FY2021: low $56.55 per share, central $66.63 per share, high $76.78 per share

- FY2022: low $64.93 per share, central $78.42 per share, high $90.94 per share

- FY2023: low $83.09 per share, central $102.32 per share, high $118.34 per share

- FY2024: low $115.28 per share, central $143.08 per share, high $165.49 per share

- FY2025: low $125.50 per share, central $153.61 per share, high $177.92 per share

- FY2026: low $175.99 per share, central $256.39 per share, high $301.23 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/109563/000010956326000033/ait-20260630.htm); period 2026-06-30, filed 2026-08-13.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.