Argan (AGX) AI Stock Analysis

• Market Cap: $4.43B
• Dividend Yield: 0.5%
• Average Volume (3M): 387.88K
• Price to Earnings (P/E): 37.6
• Beta (1Y): 1.43
• Revenue Growth: 13.49%
• EPS Growth: 77.73%
• Country: US
• Employees: 1,595
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 2.17
• Shares Outstanding: 13,873,410
• 10 Day Avg. Volume: 461,842
• 30 Day Avg. Volume: 387,881
• PEG Ratio: 0.13
• Price to Book (P/B): 5.23
• Price to Sales (P/S): 2.10
• P/FCF Ratio: 11.43
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 3.95
• Enterprise Value/Gross Profit: 20.55
• Enterprise Value/Ebitda: 28.11
• 1Y Price Target: $365.25
• Price Target Upside: 12.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $363.00 ▲(11.43% Upside)

Argan's strong financial performance and positive earnings call sentiment are the most significant factors contributing to the overall score. The company's robust backlog and strategic focus on growth opportunities in the power sector are key strengths. However, the high P/E ratio and modest dividend yield slightly temper the overall attractiveness of the stock. Technical indicators suggest mixed short-term momentum, which also influences the score.

Positive Factors

Record Backlog

A record backlog of $3 billion indicates robust future revenue potential, showcasing strong demand for Argan's services and enhancing long-term growth prospects.

Strong Financial Health

Argan's strong balance sheet with no debt enhances financial stability, providing flexibility to invest in growth opportunities and weather economic downturns.

Major Contract Win

Securing a major power plant contract strengthens Argan's market position and expands its project portfolio, driving future revenue and operational scale.

Negative Factors

Revenue Decline

A decline in revenue highlights potential challenges in project timing and execution, which could impact short-term cash flow and profitability.

Decline in Power Industry Services Revenue

A decline in power industry services revenue suggests potential market challenges or competitive pressures, affecting Argan's core business segment.

Revenue Growth Challenges

A significant decline in revenue growth rate indicates potential difficulties in maintaining sales momentum, which could hinder long-term growth prospects.

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 generates revenue primarily through its EPC contracts, which involve the construction and development of energy facilities for clients in the public and private sectors. The company earns money by charging fees for its engineering, procurement, and construction services, typically structured as fixed-price contracts or cost-plus contracts. Key revenue streams include project management fees, construction services, and maintenance contracts. Additionally, Argan has established significant partnerships with various energy companies and government agencies, enhancing its market presence and ability to secure large-scale projects. The company also benefits from the increasing demand for renewable energy solutions, positioning it to capitalize on growth opportunities in this sector.

Argan Financial Statement Overview

Summary

Argan demonstrates strong financial health with robust revenue growth and profitability, supported by a solid balance sheet with low leverage. The decline in free cash flow growth is a concern, but overall cash flow management remains strong. The company's financial statements reflect a well-managed business with a positive outlook, although attention to cash flow trends is advisable.

Income Statement

Argan's income statement shows strong profitability with a TTM gross profit margin of 18.79% and a net profit margin of 12.73%. The company has demonstrated impressive revenue growth of 117.9% in the TTM period, indicating robust business expansion. EBIT and EBITDA margins are healthy at 13.35% and 13.70% respectively, reflecting efficient operations. Overall, the income statement reflects strong growth and profitability, with a positive trajectory.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.006, indicating minimal leverage and financial risk. Return on equity is strong at 32.61%, showcasing effective use of shareholder funds. The equity ratio stands at 44.54%, suggesting a stable financial structure. While the balance sheet is strong, the slight decrease in stockholders' equity over time could be a point of concern.

Cash Flow

Argan's cash flow statement reveals a decline in free cash flow growth by 21.42% in the TTM period, which is a concern. However, the operating cash flow to net income ratio of 1.25 indicates strong cash generation relative to net income. The free cash flow to net income ratio remains high at 95.90%, reflecting efficient cash management. Despite the decline in free cash flow growth, the company maintains strong cash flow ratios.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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
EBITDA	93.86M	38.86M	45.38M	56.65M	27.64M
Net Income	85.46M	32.36M	33.10M	38.24M	23.85M
Balance Sheet
Total Assets	836.23M	598.23M	489.49M	553.59M	602.63M
Cash, Cash Equivalents and Short-Term Investments	525.14M	412.40M	325.46M	440.50M	456.73M
Total Debt	2.71M	2.73M	1.57M	1.37M	0.00
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: Neutral
• Last Price: 325.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGX, the sentiment is Neutral. The current price of 325.77 is below the 20-day moving average (MA) of 351.55, above the 50-day MA of 316.10, and above the 200-day MA of 222.28, indicating a neutral trend. The MACD of 4.21 indicates Positive momentum. The RSI at 46.83 is Neutral, neither overbought nor oversold. The STOCH value of 41.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AGX.

Argan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ECG	77 Outperform	$4.67B	27.17	35.26%	―	28.20%	24.27%
MYRG	76 Outperform	$3.51B	36.59	16.22%	―	-0.64%	168.51%
PRIM	75 Outperform	$7.13B	26.07	18.56%	0.24%	21.45%	67.31%
AGX	73 Outperform	$4.43B	37.63	32.05%	0.50%	13.49%	77.73%
GVA	70 Outperform	$4.30B	28.95	16.87%	0.47%	6.87%	64.56%
TPC	65 Neutral	$3.62B	―	-2.31%	0.09%	19.22%	78.83%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Argan Corporate Events

Argan Declares Quarterly Cash Dividend of $0.50

On December 11, 2025, Argan, Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.50 per share of common stock, payable on January 30, 2026, to stockholders of record as of January 22, 2026. This decision reflects Argan’s commitment to returning value to shareholders and follows a 33% increase in the quarterly dividend in September 2025. The increase in dividends underscores Argan’s success in executing projects and confidence in its project pipeline, amidst a robust demand environment for critical energy infrastructure.

Argan’s Subsidiary Secures Major Power Plant Contract

Argan, Inc.’s subsidiary, Gemma Power Systems, has secured a contract for an 860 MW natural gas-fired power plant in the ERCOT market, with the project value to be added to the company’s backlog for the quarter ending October 31, 2025. This development signifies a significant addition to Argan’s project portfolio, potentially enhancing its market position and operational scale within the energy sector.

Argan’s Gemma Power Systems to Build Texas Power Plant

Argan, Inc.’s subsidiary, Gemma Power Systems, has received full notice to proceed with an engineering, procurement, and construction contract for the CPV Basin Ranch Energy Center in Ward County, Texas. The 1,350 MW power plant, featuring GE turbines and potential carbon capture capabilities, is set to begin construction this fall with completion expected in 2028. This project is a significant investment in local power infrastructure, expected to create thousands of jobs during construction and provide long-term benefits to the community by powering 850,000 homes. It underscores Gemma’s expertise in delivering complex power generation facilities and strengthens its partnership with Competitive Power Ventures.