You can read about some so-called "stock-split stocks" that conducted stock splits over a year ago. But the real stocks investors should watch are the ones that are splitting their stocks in the present, not the past.

AAON (AAON 1.10%) is a great example. The heating, ventilation, and air conditioning (HVAC) solutions leader conducted a 3-for-2 stock split on Aug. 16, 2023.  This stock-split stock has soared nearly 25% so far this year. And Wall Street thinks it can go a lot higher.

Heating up

Stock splits are a relatively common occurrence for AAON. The company has conducted eight of them through the years, including a reverse stock split in 1993. 

However, AAON's impressive gains in 2023 have nothing to do with its latest stock split. Instead, the stock has heated up because of a booming HVAC market.

For example, AAON announced record second-quarter results earlier this month. Its net sales jumped 36% year over year to an all-time high of $284 million. The company's earnings skyrocketed nearly 187% higher, helped a little by a one-time income tax benefit. 

More room to run 

The consensus 12-month price target for AAON reflects an upside potential of close to 18%. The most optimistic Wall Street analyst thinks that the stock can jump nearly 27%. Even the most pessimistic price target for the company is higher than the current share price.

We only have to look at AAON's Q2 update to understand, in part, why analysts think that stock has more room to run. The company's profit margins increased significantly. CEO Gary Fields said that management "anticipate[s] continued margin improvement."

The HVAC leader's investments in new manufacturing capacity are also paying off. AAON's backlog fell 12.3% sequentially in Q2. The company expects to work down the backlog even more in the second half of 2023.

Meanwhile, the demand for AAON's HVAC units is rising. Fields noted, "Our sales channel has never been stronger and our new marketing efforts will help continue to strengthen market penetration." The company also plans to launch its new Alpha Class air-source heat pumps in the third quarter, which should boost overall revenue. 

What could cool AAON down

There are two key things that could potentially get in the way of AAON hitting Wall Street's consensus price target. None of them are within the company's control. 

First, a big overall stock market pullback would likely weigh heavily on AAON's share price. The stock has a beta of 0.81 over the last five years, which means it's less volatile than the market, as a whole. However, the company would have a much harder time rising another 18% if the broader stock market is declining.

Second, AAON's valuation could make investors less eager to buy the stock. Currently, its shares trade at 31.4x projected 2023 earnings. By comparison, the S&P 500's forward earnings multiple is 18.8. 

Wall Street seems to recognize that there could be some near-term risks. In July, three of the four analysts who cover AAON were surveyed by Refinitiv and rated the stock as a buy or strong buy, with only one recommending it as a hold. This month, all of the analysts surveyed by Refinitiv rate AAON as a hold -- despite having optimistic 12-month price targets.

Over the long term, analysts' views and stock splits don't matter for AAON. What does matter is the company's growth prospects. With factors such as climate change and the increased demand for data centers (which require significant cooling) serving as tailwinds, I predict that AAON will keep up its winning ways in the future.