Alamo Group (ALG) AI Stock Analysis

• Market Cap: $2.13B
• Dividend Yield: 0.69%
• Average Volume (3M): 84.52K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.85
• Revenue Growth: -2.73%
• EPS Growth: -2.91%
• Country: US
• Employees: 3,750
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 1.28
• Shares Outstanding: 12,121,294
• 10 Day Avg. Volume: 111,508
• 30 Day Avg. Volume: 84,518
• PEG Ratio: -1.79
• Price to Book (P/B): 1.76
• Price to Sales (P/S): 1.26
• P/FCF Ratio: 13.73
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 1.27
• Enterprise Value/Gross Profit: 5.14
• Enterprise Value/Ebitda: 8.23
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 10.66
• Revenue Forecast (FY): $1.67B

• Rating: 70 Outperform
• Price Target: $240.00 ▲(15.22% Upside)
• Action: Upgraded Date: 03/03/26
• Date: Action: Upgraded 03/03/26

The score is driven primarily by a strong financial foundation (especially conservative leverage) offset by a weakening near-term earnings/margin trajectory, supported by bullish technical trends. Valuation is reasonable but not compelling given a moderate P/E and low dividend yield, while earnings-call commentary is constructive long term but acknowledges meaningful near-term pressure in Vegetation Management and gradual recovery.

Positive Factors

Conservative, improving leverage

Alamo's materially lower leverage and steadily building equity create durable financial flexibility. Low net leverage supports capital allocation (dividends, tuck-ins), limits refinancing risk in down cycles and gives the company capacity to absorb Vegetation volatility while pursuing organic and M&A growth.

Strong free cash flow & liquidity

Sustained multi-year free cash flow and large available liquidity are structural strengths: they enable capex support for product expansion, fund acquisitions like Petersen, and underwrite a 13% dividend raise while providing buffer against working-capital swings and industry cyclicality.

Industrial Equipment division strength

The Industrial segment provides durable earnings power: above-company-average margins, double-digit order growth and a large backlog reduce revenue concentration risk from Vegetation. Its operational momentum and product diversity underpin steadier cash generation and margin resiliency over the medium term.

Negative Factors

Vegetation Management collapse

Vegetation represents ~41% of sales and experienced severe volume and margin deterioration, creating structural earnings drag. Inverse operating leverage, dealer hesitancy and consolidation inefficiencies mean recovery may be gradual, pressuring company-wide margins and cash conversion over the next several quarters.

Recent revenue & margin weakness company‑wide

A reversal from earlier growth to multi-year revenue contraction and margin compression weakens operating leverage and return metrics. If end-market softness persists, sustained lower volumes could pressure ROE, pricing power and the firm's ability to hit its through‑the‑cycle margin targets without further structural fixes.

Operational consolidation & one-time charges

Consolidation and restructuring are creating near-term inefficiencies and non-recurring charges that depress margins and operating cash flow. These integration costs and inventory reserves can persist into early 2026, slowing margin recovery and complicating the timing of expected synergies from recent acquisitions.

Alamo Group Business Overview & Revenue Model

Company Description

Alamo Group Inc. designs, manufactures, distributes, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural uses worldwide. Its Vegetation Management Division segment offers hydraulically-powered and tractor-mounted mowers, other cutters and replacement parts for heavy-duty and intensive uses and heavy duty applications, tractor- and truck-mounted mowing and vegetation maintenance equipment, and replacement parts. This segment also provides rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts, zero turn radius mowers, cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts, heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment, replacement parts, tractor attachments, agricultural implements, hydraulic and boom-mounted hedge and grass cutters, tractor attachments and implements, hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators, self-propelled sprayers and multi-drive load-carrying vehicles, cutting blades, and hydraulic and mechanical boom mowers. The company's Industrial Equipment Division segment offers truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers, leaf collection equipment and replacement brooms, parking lot and street sweepers, excavators, catch basin cleaners, and roadway debris vacuum systems, as well as truck-mounted vacuum machines, combination sewer cleaners, and hydro excavators. This segment also offers ice control products, snowplows and heavy duty snow removal equipment, hitches, attachments, and graders; and public works and runway maintenance products, parts, and services, and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas.

How the Company Makes Money

Alamo Group generates revenue primarily through the sale of its manufactured products, which include road maintenance equipment, agricultural machinery, and various attachments. Key revenue streams include direct sales to municipalities for road maintenance and to agricultural businesses for land management. The company also benefits from aftermarket sales, including parts and services for the equipment it sells, which provides a recurring revenue source. Additionally, Alamo Group may engage in strategic partnerships or collaborations with other manufacturers and distributors, enhancing its market reach and operational efficiency. Factors contributing to its earnings include strong demand in the municipal and agricultural sectors, a focus on product innovation, and a growing need for infrastructure maintenance and development.

Alamo Group Financial Statement Overview

Summary

Solid underlying profitability and a notably strong balance sheet (low and improving leverage) support resilience, but recent operating results have softened with 2025 revenue and earnings declines, margin compression, and uneven cash-flow conversion despite still-positive multi-year free cash flow.

Income Statement

Revenue expanded strongly in 2021–2023, but momentum reversed with modest contraction in 2024 and a sharper drop in 2025. Profitability remains solid with consistently healthy gross margins (~25%–27%) and net margins (~5%–8%), though 2025 shows clear margin compression versus 2023–2024 as earnings fell faster than sales. Overall, the income statement reflects a profitable operator with recent cyclical/volume pressure and a weakening near-term trajectory.

Balance Sheet

Leverage looks conservative and improving: debt-to-equity declines from ~0.46 (2020) to ~0.18 (2025) while equity steadily builds. Returns on equity were strong in 2022–2024 (low-teens to mid-teens) but eased in 2025 alongside lower earnings, signaling some efficiency pressure. Overall balance sheet quality is a key strength, with low financial risk and good capacity to navigate softer demand.

Cash Flow

Cash generation is generally positive, with strong free cash flow in 2023–2025 and healthy conversion of earnings into free cash flow in most years. However, cash flow is somewhat uneven: 2022 was a clear weak spot with negative free cash flow, and 2025 shows operating cash flow covering earnings by less than 1x, indicating more working-capital or timing headwinds despite still-positive free cash flow. Overall, cash flow supports the business, but volatility and the 2025 dip in operating cash conversion temper the score.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.60B	1.63B	1.69B	1.51B	1.33B
Gross Profit	397.82M	412.49M	453.64M	376.52M	334.51M
EBITDA	198.02M	223.26M	249.19M	195.36M	164.51M
Net Income	103.80M	115.93M	136.16M	101.93M	80.25M
Balance Sheet
Total Assets	1.61B	1.45B	1.41B	1.31B	1.21B
Cash, Cash Equivalents and Short-Term Investments	309.66M	197.27M	51.92M	47.02M	42.12M
Total Debt	220.29M	226.93M	240.57M	306.64M	274.21M
Total Liabilities	457.91M	432.02M	476.62M	523.15M	500.08M
Stockholders Equity	1.15B	1.02B	932.76M	785.36M	705.66M
Cash Flow
Free Cash Flow	146.92M	184.78M	93.41M	-16.77M	24.36M
Operating Cash Flow	177.54M	209.78M	131.15M	14.53M	49.67M
Investing Cash Flow	-46.19M	-22.18M	-52.62M	-31.74M	-33.44M
Financing Cash Flow	-30.79M	-31.97M	-76.88M	24.45M	-23.00M

Alamo Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 208.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 208.3 is above the 20-day moving average (MA) of 198.59, above the 50-day MA of 193.45, and above the 200-day MA of 196.01, indicating a bearish trend. The MACD of -7.03 indicates Positive momentum. The RSI at 36.70 is Neutral, neither overbought nor oversold. The STOCH value of 20.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALG.

Alamo Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALG	70 Outperform	$2.13B	19.44	9.32%	0.69%	-2.73%	-2.91%
LNN	70 Outperform	$1.31B	18.89	14.61%	1.24%	11.41%	13.05%
ASTE	67 Neutral	$1.29B	25.56	5.79%	1.14%	6.66%	―
TEX	67 Neutral	$7.11B	15.89	11.16%	1.24%	4.60%	-65.73%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CMCO	52 Neutral	$467.88M	20.66	0.66%	1.59%	-2.36%	-73.77%

Alamo Group Corporate Events

Alamo Group Completes Strategic Acquisition of Petersen Industries

On January 26, 2026, Alamo Group Inc. completed its previously announced acquisition of Petersen Industries, a manufacturer of specialized truck-mounted grapple loader equipment serving municipal and industrial customers, for approximately $166.5 million on a cash-free, debt-free basis, following the signing of a definitive purchase agreement on December 10, 2025. The deal is intended to reinforce Petersen’s market-leading position and broaden its sales reach by leveraging Alamo’s established distribution channels, signaling a strategic expansion of Alamo’s product portfolio in infrastructure and waste-handling equipment and underscoring its focus on long-term value creation for customers and other stakeholders.

The most recent analyst rating on (ALG) stock is a Buy with a $210.00 price target. To see the full list of analyst forecasts on Alamo Group stock, see the ALG Stock Forecast page.

Alamo Group Announces Acquisition of Petersen Industries

On December 10, 2025, Alamo Group Inc. announced its plan to acquire Petersen Industries, a leader in truck-mounted grapple loader equipment, for approximately $166.5 million. This strategic acquisition, expected to close in the first quarter of 2026, aims to integrate Petersen into Alamo’s Industrial Equipment Division, enhancing its product offerings and market reach. The acquisition is anticipated to be accretive to Alamo Group’s growth and margins, providing solid recurring revenue from aftermarket parts and services, while unlocking significant cost savings and revenue growth opportunities.

The most recent analyst rating on (ALG) stock is a Hold with a $176.00 price target. To see the full list of analyst forecasts on Alamo Group stock, see the ALG Stock Forecast page.