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Argan Inc (AGX)
NYSE:AGX
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Argan (AGX) AI Stock Analysis

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AGX

Argan

(NYSE:AGX)

Rating:77Outperform
Price Target:
$244.00
▲(8.75%Upside)
Argan's strong financial performance and positive earnings call sentiment are the most significant factors driving its stock score. The technical analysis shows positive momentum, though valuation concerns slightly dampen the overall outlook. The recent board appointment adds a strategic advantage, albeit minor.
Positive Factors
Earnings Margins
Argan's Q4 gross margins of 20.5% significantly surpassed estimates, highlighting strong execution and a favorable project mix.
Market Position
The company is strategically positioned to capitalize on increasing demand for electricity from AI data centers and EVs, alongside infrastructure investments.
Project Pipeline
Argan's backlog has exceeded $2 billion, showcasing a robust pipeline and increasing confidence in future project awards.
Negative Factors
Stock Volatility
AGX stock has experienced volatility within the AI data center theme, impacting investor confidence despite growing future visibility.
Tariff Risks
Tariffs pose a potential risk to new project activity, although management considers these risks to be low.

Argan (AGX) vs. SPDR S&P 500 ETF (SPY)

Argan Business Overview & Revenue Model

Company DescriptionArgan, Inc. (AGX) is a publicly traded holding company primarily engaged in the engineering, procurement, and construction (EPC) services through its subsidiaries. The company's core focus is on power industry projects, including natural gas-fired power plants and renewable energy facilities. Argan operates through its subsidiaries, such as Gemma Power Systems, which are recognized for their expertise in project management, plant design, and construction services.
How the Company Makes MoneyArgan, Inc. generates revenue predominantly through its subsidiaries by providing EPC services to the power generation industry. The company earns money by designing, building, and commissioning power plants, which often involve long-term contracts with utilities and independent power producers. Key revenue streams include project management fees, construction work, and equipment procurement services. Argan's earnings are substantially influenced by the successful acquisition and execution of large-scale power projects, and maintaining partnerships with industry leaders, which help to secure new contracts and ensure steady revenue flows.

Argan Earnings Call Summary

Earnings Call Date:Jun 04, 2025
(Q1-2026)
|
% Change Since: 3.21%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Positive
The earnings call indicated a strong start to fiscal 2026 with significant revenue growth, record backlog, and increased net income. However, there were challenges with the industrial construction services segment and increased SG&A expenses. Overall, the positives significantly outweigh the negatives, with a robust project pipeline and strong financial position.
Q1-2026 Updates
Positive Updates
Strong Revenue Growth
Consolidated revenue grew by 23% to $193.7 million, with a gross margin of 19% for the first quarter of fiscal 2026.
Record Backlog
Achieved a record backlog of $1.9 billion as of April 30, 2025, with significant projects like the SLEC 1.2-gigawatt ultra-efficient combined cycle natural gas-fired plant in Texas.
Increased Net Income and Earnings
Net income increased to approximately $23 million or $1.60 per diluted share, up $1.02 year over year.
Robust Project Pipeline
The company expects to exceed $2 billion in backlog later this year, driven by strong demand for power industry services.
Strong Balance Sheet
The company reported $546.5 million in cash and investments, net liquidity of $315 million, and no debt as of April 30, 2025.
Power Industry Services Growth
Revenues for the power industry services segment increased 45% to $160 million, representing 83% of first-quarter revenues.
Negative Updates
Decline in Industrial Construction Services Revenue
Revenue for the industrial construction services segment decreased to $29 million from $44 million in the first quarter of fiscal 2025.
Increased SG&A Expenses
Selling, general, and administrative expenses increased to $12.5 million for the first quarter of fiscal 2026, up from $11.4 million in the prior year.
Company Guidance
During the Argan, Inc. earnings call for the first quarter of Fiscal 2026, CEO David Watson and CFO Joshua Baugher reported strong financial performance, highlighted by a 23% increase in consolidated revenue to $193.7 million and a gross margin of 19%. Net income rose to approximately $23 million, equating to $1.60 per diluted share, while EBITDA reached $30.3 million, representing 15.6% of revenue. The company reported a record backlog of $1.9 billion, driven by a significant project with Sand O'Lakes Energy Company. Argan's balance sheet remains robust with $546.5 million in cash and investments, net liquidity of $315 million, and no debt. The power industry services segment led revenue, contributing 83% of first-quarter revenues with a 45% increase year-over-year. The industrial construction services segment experienced a decrease in revenue to $29 million due to project timing, while telecommunications infrastructure services contributed 2% of revenues. The company emphasized its strategic focus on leveraging its capabilities in natural gas and renewable energy projects to address the rising demand for reliable power infrastructure.

Argan Financial Statement Overview

Summary
Argan demonstrates strong financial health with robust revenue growth and solid profitability margins. The balance sheet is characterized by minimal leverage and a conservative capital structure, and cash flows show effective cash conversion from operations. Attention should be given to fluctuations in non-operational cash flows.
Income Statement
85
Very Positive
Argan demonstrates robust financial health with strong revenue growth and solid profitability margins. The TTM revenue growth rate is impressive, with a notable increase from the previous year. Gross and net profit margins are healthy at 17.57% and 11.00%, respectively, reflecting efficient cost management. The EBIT margin of 11.65% and EBITDA margin of 11.88% further highlight operational efficiency. Overall, the income statement reflects a strong growth trajectory and profitability.
Balance Sheet
80
Positive
Argan's balance sheet is strong, characterized by a low debt-to-equity ratio of 0.007, indicating minimal leverage and a conservative capital structure. The company maintains a high equity ratio of 45.94%, suggesting a solid financial position and significant asset ownership. Return on equity is also commendable at 27.52%, showcasing efficient utilization of shareholder funds. The stability of Argan's balance sheet provides a buffer against potential risks.
Cash Flow
78
Positive
Argan's cash flow statement reflects robust cash generation capabilities, with free cash flow showing significant growth. The free cash flow to net income ratio is strong, indicating effective conversion of earnings into cash. Operating cash flow surpasses net income, demonstrating the company's ability to generate cash from its core operations. However, fluctuations in investing and financing cash flows may warrant monitoring.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue874.18M573.33M455.04M509.37M392.21M
Gross Profit140.99M80.83M86.36M99.73M62.07M
EBITDA93.86M38.86M45.38M56.65M27.64M
Net Income85.46M32.36M33.10M38.24M23.85M
Balance Sheet
Total Assets836.23M598.23M489.49M553.59M602.63M
Cash, Cash Equivalents and Short-Term Investments525.14M412.40M325.46M440.50M456.73M
Total Debt5.30M5.32M1.57M3.66M2.11M
Total Liabilities484.37M307.29M208.59M227.99M280.22M
Stockholders Equity351.86M290.94M280.90M326.39M320.67M
Cash Flow
Free Cash Flow161.00M114.10M-33.43M26.99M172.98M
Operating Cash Flow167.58M116.86M-30.06M28.41M174.68M
Investing Cash Flow-193.62M-67.61M-63.12M-7.04M68.30M
Financing Cash Flow-26.06M-26.05M-82.80M-34.61M-45.41M

Argan Technical Analysis

Technical Analysis Sentiment
Positive
Last Price224.37
Price Trends
50DMA
208.88
Positive
100DMA
172.33
Positive
200DMA
157.37
Positive
Market Momentum
MACD
2.02
Negative
RSI
59.92
Neutral
STOCH
59.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGX, the sentiment is Positive. The current price of 224.37 is above the 20-day moving average (MA) of 211.46, above the 50-day MA of 208.88, and above the 200-day MA of 157.37, indicating a bullish trend. The MACD of 2.02 indicates Negative momentum. The RSI at 59.92 is Neutral, neither overbought nor oversold. The STOCH value of 59.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGX.

Argan Risk Analysis

Argan disclosed 39 risk factors in its most recent earnings report. Argan reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Argan Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$1.56B47.543.79%8.65%-22.72%
79
Outperform
$4.84B23.7715.30%0.33%12.45%42.45%
77
Outperform
$3.06B30.3530.48%0.67%45.08%158.43%
72
Outperform
$3.52B23.1732.91%11.92%8.94%
70
Neutral
$2.96B87.525.71%-7.33%-57.86%
63
Neutral
$2.55B-12.28%8.95%-41.32%
58
Neutral
HK$14.94B4.62-2.78%5.07%3.80%-54.55%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AGX
Argan
224.37
147.53
192.00%
MYRG
MYR Group
195.34
45.25
30.15%
PRIM
Primoris Services
89.93
34.03
60.88%
TPC
Tutor Perini
48.29
22.22
85.23%
NVEE
NV5 Holdings
23.28
-2.63
-10.15%
ECG
Everus Construction Group, Inc.
69.00
19.00
38.00%

Argan Corporate Events

Shareholder MeetingsDividends
Argan Holds Annual Meeting, Announces Dividend
Neutral
Jun 17, 2025

On June 17, 2025, Argan, Inc. held its Annual Meeting of Stockholders, where several key resolutions were passed. These included the election of nine board members, advisory votes on executive compensation and its frequency, an amendment to limit personal liability of certain officers, and the ratification of Grant Thornton LLP as the company’s auditors for the fiscal year ending January 31, 2026. Additionally, Argan announced a regular quarterly cash dividend of $0.375 per share, payable on July 31, 2025, to stockholders of record as of July 23, 2025.

The most recent analyst rating on (AGX) stock is a Buy with a $150.00 price target. To see the full list of analyst forecasts on Argan stock, see the AGX Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 25, 2025