Applied Industrial Technologies Inc. (AIT) · Q2 2026 results and valuation

At 4.0% growth a year (3-year revenue growth), the model's fair value is $194.49 a share — the stock trades 55% above it. Today's price assumes 10.1% growth a year.

1. Guidance

   AIT now expects higher-margin flow control sales to contribute more in fiscal 2026, which could lift profits as overall growth slows.

   Source quote

   “In addition, following a more muted growth backdrop, in fiscal 2026, we expect potentially greater contribution from higher margin flow control sales.”

2. Guidance

   AIT's strongest sales growth came from automation, where organic sales rose over 20% year-over-year.

   Source quote

   “Sales growth in the quarter was strongest in automation where organic sales increased over 20% year-over-year.”

Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 89% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.

Sentences that drove the tone

“Improved organic sales growth was primarily driven by stronger volume growth across our US service center operations reflecting more favorable end market demand and benefits from our internal sales initiatives...”

“The strong EBITDA growth and EBITDA margin performance in the quarter primarily reflects solid underlying incremental margins and more robust sales growth combined with ongoing cost accountability, partially offset by...”

“As a percentage of sales, SG&A expense improved 94 basis points year over year to 18.6% highlighting strong operating leverage in the quarter and a solid improvement from trends last...”