Alamo Group (ALG) AI Stock Analysis

• Market Cap: $2.73B
• Dividend Yield: 0.53%
• Average Volume (3M): 136.61K
• Price to Earnings (P/E): 23.6
• Beta (1Y): 0.95
• Revenue Growth: -6.43%
• EPS Growth: -14.68%
• Country: US
• Employees: 3,750
• Sector: Industrials
• Sector Strength: 89
• Industry: Agricultural - Machinery
• EPS (TTM): 2.64
• Shares Outstanding: 12,089,957
• 10 Day Avg. Volume: 126,272
• 30 Day Avg. Volume: 136,613
• PEG Ratio: 0.62
• Price to Book (P/B): 2.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -100.26
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 4.85
• Enterprise Value/Ebitda: 2.14
• 1Y Price Target: $212.50
• Price Target Upside: -6.28% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 72 Outperform
• Price Target: $247.00 ▲(8.94%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 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 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 across income, balance sheet, and cash flow statements. The company maintains solid profitability and cash generation capabilities, although revenue growth presents a challenge in recent periods. With a solid balance sheet structure and efficient cash management, Alamo Group is well-positioned in the Agricultural - Machinery industry, but attention to revenue growth strategies is essential.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.59B	1.63B	1.69B	1.51B	1.33B	1.16B
Gross Profit	399.64M	412.49M	453.64M	376.52M	334.51M	292.11M
EBITDA	220.47M	223.26M	249.19M	195.28M	161.42M	143.43M
Net Income	115.61M	115.93M	136.16M	101.93M	80.25M	57.80M
Balance Sheet
Total Assets	1.50B	1.45B	1.41B	1.31B	1.21B	1.11B
Cash, Cash Equivalents and Short-Term Investments	200.27M	197.27M	51.92M	47.02M	42.12M	50.20M
Total Debt	216.80M	226.93M	251.88M	301.95M	269.55M	285.39M
Total Liabilities	447.63M	432.02M	476.62M	523.15M	500.08M	483.69M
Stockholders Equity	1.06B	1.02B	932.76M	785.36M	705.66M	625.64M
Cash Flow
Free Cash Flow	198.27M	184.78M	93.41M	-16.77M	24.36M	166.46M
Operating Cash Flow	222.85M	209.78M	131.15M	14.53M	49.67M	184.33M
Investing Cash Flow	-22.17M	-22.18M	-52.62M	-31.74M	-33.44M	-14.17M
Financing Cash Flow	-118.37M	-31.97M	-76.88M	24.45M	-23.00M	-164.24M

Alamo Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 226.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALG, the sentiment is Positive. The current price of 226.73 is above the 20-day moving average (MA) of 218.88, above the 50-day MA of 203.98, and above the 200-day MA of 187.87, indicating a bullish trend. The MACD of 6.25 indicates Positive momentum. The RSI at 72.02 is Negative, neither overbought nor oversold. The STOCH value of 76.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALG.

Alamo Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNN	79 Outperform	$1.58B	20.89	15.06%	0.99%	9.46%	5.91%
REVG	78 Outperform	$2.42B	26.64	34.41%	0.48%	-9.50%	-54.36%
TEX	75 Outperform	$3.36B	14.56	13.85%	1.33%	-2.78%	-51.72%
HY	74 Outperform	$751.95M	7.59	21.56%	3.39%	-0.32%	-35.10%
ALG	72 Outperform	$2.73B	23.62	11.48%	0.53%	-6.43%	-14.68%
ASTE	71 Outperform	$933.20M	62.54	2.33%	1.27%	1.99%	-39.02%
Sector *	68 Neutral	€3.60B	22.93	11.11%	3.81%	1.25%	-23.50%

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.