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Is A. O. Smith Stock Underperforming the S&P 500?

Wed Jun 25, 2025
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Neha Panjwani

2 min read

In This Article:

A_O_ Smith Corp_ logo on phone and website-by T_Schneider via Shutterstock

A_O_ Smith Corp_ logo on phone and website-by T_Schneider via Shutterstock

A. O. Smith Corporation (AOS), headquartered in Milwaukee, Wisconsin, manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products. With a market cap of $9.1 billion, the company specializes in offering innovative and energy-efficient solutions and products, which are developed and sold on a global platform.

Companies worth $2 billion or more are generally described as “mid-cap stocks,” and AOS perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty industrial machinery industry. AOS’ strengths include its diversified portfolio, which hedges against market downturns, and its large scale, driving cost efficiencies. The company's strong brand equity, built on decades of reliability and innovation, translates into pricing power and customer loyalty. AOS’ financial resilience provides strategic flexibility, while its focus on R&D and innovation positions it well for emerging trends in energy-efficient and eco-friendly products. Its efficient supply chain and performance-driven culture further solidify its competitive edge.

Despite its notable strength, AOS slipped 29.7% from its 52-week high of $92.45, achieved on Jul. 18, 2024. Over the past three months, AOS stock declined 2.2%, underperforming the S&P 500 Index’s ($SPX) 5.6% rise during the same time frame.

www.barchart.com

www.barchart.com

In the longer term, shares of AOS dipped 4.8% on a YTD basis and fell 23.1% over the past 52 weeks, underperforming SPX’s YTD gains of 3.6% and 11.8% returns over the last year.

To confirm the bearish trend, AOS has been trading below its 50-day moving average over the past year, with small fluctuations. The stock is trading below its 200-day moving average since early August, 2024.

www.barchart.com

www.barchart.com

AOS’ underperformance can be linked to lower water heater volumes in North America and sluggish sales in China.

On Apr. 29, AOS shares closed up more than 3% after reporting its Q1 results. Its EPS of $0.95 topped Wall Street expectations of $0.90. The company’s revenue was $963.9 million, beating Wall Street forecasts of $947.3 million. AOS expects full-year adjusted EPS in the range of $3.60 to $3.90, and expects revenue in the range of $3.8 billion to $3.9 billion.