What is A. O. Smith Corporation (AOS) DCF Fair Value and Intrinsic Value in 2026?

A. O. Smith Corporation (AOS) intrinsic value is calculated using conservative multi-stage Discounted Cash Flow (DCF) models, 5-year free cash flow trajectories, Graham Numbers, and owner earnings multiples. LocalAlpha tracks real-time margin of safety against live market prices.

What is A. O. Smith Corporation's historical Return on Invested Capital (ROIC) and Moat Rating?

A. O. Smith Corporation operates in the Industrials sector (Building Products & Equipment) with an economic moat rating of WIDE. LocalAlpha tracks 5-year audited quarterly ROIC, operating margin stability, and balance sheet solvency ratios.

What is A. O. Smith Corporation's financial health rating and Piotroski F-Score?

A. O. Smith Corporation's balance sheet quality is evaluated using the 9-point Piotroski F-Score, Altman Z-Score solvency model, debt-to-equity ratio, and quick/current liquidity coverage to guard against financial distress.

How does LocalAlpha monitor A. O. Smith Corporation (AOS) for quarterly SEC filing thesis breaks?

LocalAlpha audits A. O. Smith Corporation's 10-K, 10-Q, and 8-K regulatory filings on SEC EDGAR within 15 minutes of release. If reported metrics breach an investor's custom ROIC floor, operating margin boundary, or qualitative risk criteria, an autonomous breach audit is dispatched immediately.

StocksAOS

AOS

A.O. Smith CorporationIndustrials / Specialty Industrial MachineryINTACT

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, homes, apartments, and condominiums, and other large commercial buildings; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, Impact, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms, as well as offers Aquasana branded products directly to consumers through e-commerce channels; and A. O. Smith branded water treatment products through dealer network and Amazon. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

Share Price

$57.39

52W: $54.16 - $81.87

DCF Fair Value

$95.19

+39.7% MoS

Thesis Hub

P/E (TTM)

16x

ROIC

14.2%

Operating Margin

18.9%

FCF Yield

6.2%

Debt / Equity

0.37x

Piotroski Score

9/9

Altman Z-Score

3.94

Market Cap

$7.8B

Price vs. Intrinsic Value Corridor

Margin of Safety Buy Zone (<25% Discount)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)

—()

Period Range

$— - $—

DCF Fair Value

$95.19

MOS Buy Target (-25%)

$71.39

Valuation Overlays: DCF Fair Value ($95.19) 25% MOS Buy Target ($71.39) Revised Graham ($74.70) Graham Number ($33.09)

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price

$57.39

DCF Fair Value

$95.33

+39.8% MoS

Starting Free Cash Flow ($M)$485M

$100M$485M (Reported)$50,000M

Stage 1 Growth (Years 1-5)9.5%

-5%10% (Target)35%

Stage 2 Growth (Years 6-10)4.5%

0%5%20%

Discount Rate (WACC / Hurdle)9.0%

6%9% (Standard)15% (High Risk)

Terminal Perpetual Growth2.5%

1% (GDP Floor)2.5% (Inflation)4.0%

Net Debt ($M)$500M

-$100B CashBalance Sheet+$150B Debt

10-Yr PV of Cash Flows

$4.6B

PV of Terminal Value

$6.3B

Implied Enterprise Value

$11.0B

Implied Equity Value

$10.5B

Year	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr 8	Yr 9	Yr 10
Projected FCF ($M)	$531	$582	$637	$697	$764	$798	$834	$871	$910	$951
Present Value (PV)	$487	$489	$492	$494	$496	$476	$456	$437	$419	$402

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-73.5% Premium

$33.08

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $3.59BVPS: $13.55

Revised Graham Formula+23.2% MoS

$74.70

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Growth Rate (g%)

Bond Yield (Y%)

Buffett Owner Earnings7.3% Yield

$4.19 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $0.5BYield: 7.3%

Reverse DCF: Market Growth Expectation

EXTREMELY LOW BARRIER

-0.1% CAGR (Next 10 Yrs)

At the current price of $57.39, the market is assuming the business will compound Free Cash Flow at -0.1% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict

✓ Low market hurdle: Easy for a wide-moat compounder to beat.

Autonomous Thesis Underwriting

Surveil AOS with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for A.O. Smith Corporation. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 18.9% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

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Frequently Asked Questions: A.O. Smith Corporation (AOS) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for A.O. Smith Corporation.

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, A.O. Smith Corporation has an estimated DCF intrinsic fair value of $95.19 per share compared to its current market price of $57.39. This represents an estimated 39.7% margin of safety (trading below fair value). Additionally, its classic Benjamin Graham Number stands at $33.09.