Alamo Group (ALG) AI Stock Analysis

• Market Cap: $2.61B
• Dividend Yield: 0.52%
• Average Volume (3M): 110.05K
• Price to Earnings (P/E): 22.5
• Beta (1Y): 0.93
• Revenue Growth: -6.43%
• EPS Growth: -14.68%
• Country: US
• Employees: 3,750
• Sector: Industrials
• Sector Strength: 88
• Industry: Agricultural - Machinery
• EPS (TTM): 2.64
• Shares Outstanding: 12,089,957
• 10 Day Avg. Volume: 72,024
• 30 Day Avg. Volume: 110,047
• PEG Ratio: -55.44
• Price to Book (P/B): 2.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.46
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 6.69
• Enterprise Value/Ebitda: 2.95
• 1Y Price Target: $212.50
• Price Target Upside: -1.45% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 72 Outperform
• Price Target: $247.00 ▲(14.55%Upside)

Alamo Group's solid financial health and strong corporate governance are significant strengths. However, the stock's technical indicators suggest caution due to potential overvaluation and overbought conditions. The earnings call highlighted growth areas and challenges, with corporate events reflecting shareholder support. Overall, the stock is well-positioned but faces short-term valuation and revenue growth challenges.

Positive Factors

Earnings Recovery

Significant restructuring efforts should keep a lid on decremental margins, with the segment set to bottom and drive higher incremental margins on future volume recovery.

Industrial Sales

Industrial sales $211.2 million (+22.3% year/year, +22.4% organic) just above consensus.

Mergers and Acquisitions

M&A remains a potential catalyst, further augmenting earnings recovery.

Negative Factors

Demand Weakness

Orders and backlog have decreased year over year, suggesting weaker future demand.

Earnings Risk

There is a risk of flat or declining earnings for two years, partly due to potential future impacts from tariffs or material cost increases.

Profitability Pressure

The company's operating margin fell short of expectations, indicating pressure on profitability.

Alamo Group Business Overview & Revenue Model

Company Description

Alamo Group (ALG) is a leading global manufacturer and distributor of high-quality equipment for infrastructure maintenance, agriculture, and other industrial applications. The company operates across several sectors, including agricultural machinery, industrial equipment, and infrastructure maintenance. Its core products and services include mowers, snow removal equipment, street sweepers, and vacuum trucks, among others, catering to both governmental and private sector clients.

How the Company Makes Money

Alamo Group makes money through the manufacturing and sale of specialized equipment and machinery across its diverse product lines. Key revenue streams include direct sales to government entities and commercial businesses, as well as through a network of dealers and distributors. The company benefits from its strong market presence and brand reputation, which help drive consistent demand for its products. Additionally, strategic acquisitions and partnerships enhance its product offerings and geographical reach, contributing to revenue growth.

Alamo Group Financial Statement Overview

Summary

Alamo Group demonstrates strong financial health with solid profitability and excellent balance sheet stability. However, revenue growth has been a challenge, as evidenced by a slight decline in TTM revenue.

Income Statement

Alamo Group's income statement shows solid profitability with a stable gross profit margin. However, revenue has seen a slight decline in the TTM (Trailing-Twelve-Months) compared to the previous year, which affects the revenue growth rate adversely. The net profit margin remains healthy but slightly decreased. Overall, the company's income statement reflects strong profitability but with a need to address revenue growth challenges.

Balance Sheet

The balance sheet displays strong equity levels with a favorable debt-to-equity ratio, indicating prudent financial management. The equity ratio is robust, suggesting a stable capital structure. However, the return on equity has slightly decreased, pointing to potential efficiency improvements in generating profit from equity. Overall, the balance sheet demonstrates excellent financial stability with manageable leverage.

Cash Flow

Cash flow analysis shows a significant improvement in free cash flow growth, driven by strong operating cash flows. The operating cash flow to net income ratio is favorable, indicating efficient cash generation from operations. The company maintains a healthy free cash flow to net income ratio, highlighting effective cash management. Overall, cash flow metrics are strong, supporting operational and financial resilience.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.63B	1.69B	1.51B	1.33B	1.16B
Gross Profit	412.49M	453.64M	376.52M	334.51M	292.11M
EBITDA	223.26M	249.19M	195.28M	161.42M	143.43M
Net Income	115.93M	136.16M	101.93M	80.25M	57.80M
Balance Sheet
Total Assets	1.45B	1.41B	1.31B	1.21B	1.11B
Cash, Cash Equivalents and Short-Term Investments	197.27M	51.92M	47.02M	42.12M	50.20M
Total Debt	226.93M	251.88M	301.95M	269.55M	285.39M
Total Liabilities	432.02M	476.62M	523.15M	500.08M	483.69M
Stockholders Equity	1.02B	932.76M	785.36M	705.66M	625.64M
Cash Flow
Free Cash Flow	184.78M	93.41M	-16.77M	24.36M	166.46M
Operating Cash Flow	209.78M	131.15M	14.53M	49.67M	184.33M
Investing Cash Flow	-22.18M	-52.62M	-31.74M	-33.44M	-14.17M
Financing Cash Flow	-31.97M	-76.88M	24.45M	-23.00M	-164.24M

Alamo Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 215.62
• 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 ALG, the sentiment is Neutral. The current price of 215.62 is below the 20-day moving average (MA) of 220.58, above the 50-day MA of 213.46, and above the 200-day MA of 190.57, indicating a neutral trend. The MACD of 0.84 indicates Positive momentum. The RSI at 48.17 is Neutral, neither overbought nor oversold. The STOCH value of 53.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALG.

Alamo Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REVG	78 Outperform	$2.42B	26.57	34.41%	0.48%	-9.50%	-54.36%
HY	78 Outperform	$743.98M	7.48	21.56%	3.36%	-0.32%	-35.10%
TEX	75 Outperform	$3.21B	18.25	9.45%	1.39%	-0.35%	-63.44%
LNN	73 Outperform	$1.48B	19.61	15.06%	1.05%	9.46%	5.91%
ALG	72 Outperform	$2.61B	22.46	11.48%	0.52%	-6.43%	-14.68%
ASTE	65 Neutral	$866.89M	57.64	2.33%	1.37%	1.99%	-39.02%
Sector *	64 Neutral	$10.64B	16.52	6.24%	2.15%	3.01%	-28.89%

Alamo Group Corporate Events

Alamo Group Stockholders Approve Key Proposals at Annual Meeting

On May 8, 2025, Alamo Group held its annual meeting of stockholders where several key proposals were voted on. Stockholders approved the election of all eight director nominees, the compensation of named executive officers, the 2025 Incentive Stock Option Plan, and the appointment of KPMG LLP as the independent auditor for the fiscal year 2025. These approvals indicate strong stockholder support for the company’s leadership and strategic plans, potentially bolstering its operational stability and investor confidence.