Argan (AGX) AI Stock Analysis

• Market Cap: $1.63B
• Dividend Yield: 1.12%
• Average Volume (3M): 396.65K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.71
• Revenue Growth: 52.47%
• EPS Growth: 161.32%
• Country: US
• Employees: 1,595
• Sector: Industrials
• Sector Strength: 63
• Industry: Engineering & Construction
• EPS (TTM): 6.11
• Shares Outstanding: 13,575,116
• 10 Day Avg. Volume: 519,615
• 30 Day Avg. Volume: 396,650
• PEG Ratio: 0.12
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.03
• Price to Cash Flow (P/CF): 12.90
• P/FCF Ratio: 14.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $150.00
• Price Target Upside: 24.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Argan's strong financial performance, highlighted by impressive revenue growth and a robust balance sheet, forms the backbone of its high score. The upbeat earnings call further supports optimism, despite moderate technical indicators and a fair valuation. Challenges in specific segments and supply chains are noted but managed, reinforcing the company's strong position in its sector.

Positive Factors

Financial performance

Strong Q4 results demonstrated Argan’s ability to drive higher gross margins and EBITDA.

Market demand

The company is benefiting from an increase in demand for electricity use from AI data centers and EVs, as well as investments to replace aging infrastructure.

Project pipeline

Management was increasingly bullish on the new project pipeline and expects several new power plant projects to be awarded, which can significantly increase the backlog.

Negative Factors

Backlog concerns

Despite expecting positive Q3 results and bullish commentary, there is an anticipation of a decline in backlog due to no recent major project announcements.

Valuation concerns

Shares are currently trading at a premium above both historical valuations and peer group multiples, suggesting that current opportunities are fully priced in.

Argan Business Overview & Revenue Model

Company Description

Argan, Inc., through its subsidiaries, provides engineering, procurement, construction, commissioning, operations management, maintenance, project development, technical, and consulting services to the power generation and renewable energy markets. The company operates through Power Industry Services, Industrial Fabrication and Field Services, and Telecommunications Infrastructure Services segments. The Power Industry Services segment offers engineering, procurement, and construction contracting services to the owners of alternative energy facilities, such as biomass plants, wind farms, and solar fields; and design, construction, project management, start-up, and operation services for projects with approximately 15 gigawatts of power-generating capacity. This segment serves independent power project owners, public utilities, power plant equipment suppliers, and energy plant construction companies. The Industrial Fabrication and Field Services segment provides industrial field, and pipe and vessel fabrication services for forest products, industrial gas, fertilizer, and mining companies in southeast region of the United States. The Telecommunications Infrastructure Services segment offers trenchless directional boring and excavation for underground communication and power networks, as well as aerial cabling services; and installs buried cable, high and low voltage electric lines, and private area outdoor lighting systems. It also provides structured cabling, terminations, and connectivity that offers the physical transport for high-speed data, voice, video, and security networks. This segment serves state and local government agencies, regional communications service providers, electric utilities, and other commercial customers, as well as federal government facilities comprising cleared facilities in the mid-Atlantic region of the United States. Argan, Inc. was incorporated in 1961 and is headquartered in Rockville, Maryland.

How the Company Makes Money

Argan, Inc. generates revenue through its subsidiaries by providing engineering, procurement, and construction services to the power generation industry. The company earns money by undertaking large-scale construction projects for natural gas-fired power plants and renewable energy facilities. Its revenue model is primarily based on long-term contracts with utility companies, independent power producers, and industrial customers. Argan benefits from its ability to manage complex projects from conception to completion, which includes securing necessary permits, designing facilities, procuring materials, and managing construction. Additionally, the company may engage in operations and maintenance services for completed projects, providing a steady flow of income post-construction. Significant partnerships with technology providers and industry leaders also enhance Argan's capabilities and competitiveness in the market.

Argan Financial Statement Overview

Summary

Argan presents a solid financial position with significant revenue and profit growth, robust margins, a conservative balance sheet with no debt, and strong cash flow generation. These factors contribute to its high financial scores across the board, indicating a well-managed and financially healthy company.

Income Statement

Argan has demonstrated strong revenue growth, with a 52.4% increase in the latest year. The gross profit margin stands at 16.1%, and the net profit margin is robust at 9.8%. EBIT and EBITDA margins are healthy at 10.1%. This indicates high efficiency and profitability in its operations.

Balance Sheet

Argan maintains a very stable balance sheet, with no total debt and a strong equity position. The equity ratio is 42.1%, which signifies solid financial health and a conservative capital structure. The return on equity is impressive at 24.3%, reflecting strong profitability relative to shareholder equity.

Cash Flow

The company shows excellent cash flow performance, with a free cash flow growth rate of 41.1% and a high operating cash flow to net income ratio of 1.96. The free cash flow to net income ratio is also strong at 1.88, indicating effective cash generation from its operations.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
874.18M	573.33M	455.04M	509.37M	392.21M
	Gross Profit
140.99M	80.83M	86.36M	99.73M	62.07M
	EBIT
88.19M	36.46M	41.67M	44.51M	18.41M
	EBITDA
88.19M	38.86M	45.38M	56.65M	27.64M
	Net Income Common Stockholders
85.46M	32.36M	33.10M	38.24M	23.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
145.26M	412.40M	325.46M	440.50M	456.73M
	Total Assets
836.23M	598.23M	489.49M	553.59M	602.63M
	Total Debt
2.71M	5.32M	1.57M	3.66M	2.11M
	Net Debt
-145.26M	-191.71M	-172.38M	-346.82M	-364.56M
	Total Liabilities
484.37M	307.29M	208.59M	227.99M	280.22M
	Stockholders Equity
351.86M	290.94M	280.90M	326.39M	320.67M
Cash Flow		Free Cash Flow
161.00M	114.10M	-33.43M	26.99M	172.98M
	Operating Cash Flow
167.58M	116.86M	-30.06M	28.41M	174.68M
	Investing Cash Flow
-193.62M	-67.61M	-63.12M	-7.04M	68.30M
	Financing Cash Flow
-26.06M	-26.05M	-82.80M	-34.61M	-45.41M

Argan Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 120.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGX, the sentiment is Negative. The current price of 120.08 is below the 20-day moving average (MA) of 122.32, below the 50-day MA of 131.69, and above the 200-day MA of 116.45, indicating a neutral trend. The MACD of -0.49 indicates Negative momentum. The RSI at 55.10 is Neutral, neither overbought nor oversold. The STOCH value of 55.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGX.

Argan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGX	82 Outperform	$1.63B	19.54	26.59%	1.12%	52.47%	161.32%
EME	77 Outperform	$15.55B	15.90	37.25%	0.29%	15.76%	61.64%
KBR	73 Outperform	$6.17B	17.03	26.45%	1.29%	11.30%	―
FLR	72 Outperform	$5.21B	2.54	72.85%	―	5.43%	2094.12%
PWR	72 Outperform	$35.49B	39.71	13.32%	0.15%	13.36%	20.00%
Sector *	62 Neutral	$7.25B	12.39	3.08%	3.39%	3.63%	-14.32%
DY	61 Neutral	$4.03B	17.55	20.35%	―	12.61%	7.43%