Astec (ASTE) AI Stock Analysis

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Astec

(NASDAQ:ASTE)

Rating:66Neutral

Price Target:―

Astec's overall stock score reflects a strong balance sheet and positive earnings call outlook, tempered by significant profitability challenges and high valuation. The technical analysis indicates a lack of strong momentum, and while earnings call guidance is optimistic, existing operational inefficiencies and high interest rates pose risks.

Positive Factors

Construction Market Demand

Management highlighted that the infrastructure construction market remains strong with healthy demand for asphalt and concrete plant deliveries.

Infrastructure Solutions Performance

Management noted strong demand in Infrastructure Solutions, particularly for asphalt and concrete plants.

Negative Factors

Declining Backlog

Backlog declined 23% year/year.

Domestic Backlog Challenges

Domestic backlog decreased by 26.0% year/year, indicating ongoing challenges.

Interest Rates Impact

Higher interest rates continue to impact demand from dealers and contractors in the segment.

Astec (ASTE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$886.10M

Dividend Yield1.34%

Average Volume (3M)131.00K

Price to Earnings (P/E)58.9

Beta (1Y)1.05

Revenue Growth1.99%

EPS Growth-39.02%

CountryUS

Employees4,148

SectorIndustrials

Sector Strength92

IndustryAgricultural - Machinery

Share Statistics

EPS (TTM)0.88

Shares Outstanding22,866,970

10 Day Avg. Volume119,958

30 Day Avg. Volume130,998

Financial Highlights & Ratios

PEG Ratio0.23

Price to Book (P/B)1.33

Price to Sales (P/S)0.00

P/FCF Ratio12.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$45.00

Price Target Upside12.73% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Astec Business Overview & Revenue Model

Company DescriptionAstec Industries, Inc. (ASTE) is a prominent American manufacturer focused on the infrastructure, mining, and energy sectors. The company designs and manufactures equipment and components used in road building, aggregate processing, oil, gas, and water well drilling, wood processing, and recycling. Astec's core products include hot mix asphalt plants, concrete plants, and their components, as well as rock crushers, conveyors, and asphalt pavers.

How the Company Makes MoneyAstec Industries generates revenue through the sale of its diverse range of equipment and components to customers in the road building, mining, and energy sectors. Its revenue model is predominantly based on direct sales of machinery and equipment, supplemented by aftermarket parts and service offerings. The company also engages in long-term contracts with various construction and infrastructure companies, contributing to a steady income stream. Strategic partnerships and acquisitions further bolster Astec’s market position and revenue potential, allowing it to expand its product portfolio and reach within these critical industries.

Astec Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 13.54%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

Astec Industries reported strong financial results for Q1 2025 with significant improvements in EBITDA and earnings per share. The acquisition of TerraSource is a strategic move expected to enhance the company's Materials Solutions segment. However, challenges such as moderated backlog, high interest rates affecting capital equipment sales, and tariff uncertainties present risks. Overall, the highlights slightly outweigh the lowlights, indicating a cautiously positive outlook.

Q1-2025 Updates

Positive Updates

Strong Q1 Financial Performance

Adjusted EBITDA of $35.2 million, an increase of $16.3 million or 86.2% over the first quarter of 2024. Adjusted EBITDA margin increased by 460 basis points to 10.7%. Adjusted earnings per share was $0.88, compared to $0.34 in Q1 2024.

Record Free Cash Flow

Free cash flow of $16.6 million, representing 116% of net income, driven by increased profitability and working capital management.

Acquisition of TerraSource

Astec announced a definitive agreement to acquire TerraSource for $245 million, expected to enhance the Materials Solutions segment and provide EBITDA margin expansion.

Infrastructure Segment Success

Infrastructure Solutions segment experienced strong net sales driven by domestic capital equipment performance, with EBITDA margins positively affected by volume, pricing, and operational excellence initiatives.

Improved Implied Orders

Consolidated implied orders rose on a quarter-over-quarter and sequential basis, with the Infrastructure Solutions segment generating solid numbers and Materials Solutions segment posting an increase for the second consecutive quarter.

Negative Updates

Moderated Backlog

Backlog of $402.6 million moderated sequentially by 4.1%, with softness in demand for mobile paving and forestry units.

Materials Solutions Challenges

Capital equipment sales in the Materials Solutions segment were challenged by high interest rates and dealer inventory destocking, though aftermarket part sales remained stable.

Tariff Uncertainty

Uncertainty surrounding tariffs may impact customer decisions and costs, with potential impacts on margins and sales if not managed proactively.

Company Guidance

During Astec Industries' first quarter 2025 earnings call, the company reported strong financial performance with key metrics indicating substantial growth. Adjusted EBITDA reached $35.2 million, representing an 86.2% increase over the first quarter of 2024, with an adjusted EBITDA margin improvement of 460 basis points to 10.7%. Adjusted earnings per share also showed significant improvement, standing at $0.88 compared to $0.34 in the previous year. Despite a 4.1% sequential moderation in backlog to $402.6 million, the company noted improved implied orders and strong demand in its Infrastructure Solutions segment. The company maintained its full-year 2025 adjusted EBITDA guidance in the range of $105 million to $125 million, excluding the impact of tariffs, and highlighted strong free cash flow generation of $16.6 million, which was 116% of net income. Astec also announced a definitive agreement to acquire TerraSource, a move expected to strengthen its Materials Solutions segment with significant synergies anticipated.

Astec Financial Statement Overview

Summary

Astec demonstrates solid revenue growth and a strong balance sheet with low leverage, underpinning its financial stability. Despite thin profit margins, the company's efficient cash flow management stands out. Improvement in profitability could further enhance its financial health.

Income Statement

Positive

Astec shows stable revenue growth with a TTM increase compared to the previous year. Gross profit margin is healthy at 25.9% for TTM, indicating efficient cost management. However, net profit margin remains thin at 1.1%, suggesting limited profitability. The EBIT margin of 5.2% and EBITDA margin of 4.4% reflect moderate operational efficiency. Overall, there is room for improvement in profitability.

Balance Sheet

Positive

The company maintains a strong equity position with an equity ratio of 61.9%, suggesting financial stability. The debt-to-equity ratio is low at 0.15, indicating conservative leverage. ROE stands at 2.3%, which is modest and suggests potential for better returns on equity. Overall, a solid balance sheet with low financial risk.

Cash Flow

Positive

Astec's free cash flow has rebounded significantly, with a strong growth rate from the previous year. The operating cash flow to net income ratio of 5.96 indicates robust cash generation relative to earnings. Free cash flow to net income ratio is high at 4.99, showing effective cash flow management. Overall, cash flow is a strong point for Astec.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.33B	1.31B	1.34B	1.27B	1.10B	1.02B
	Gross Profit
343.60M	327.90M	330.80M	264.10M	251.70M	240.10M
	EBIT
69.50M	23.20M	48.60M	15.90M	22.10M	43.00M
	EBITDA
65.60M	51.40M	77.30M	71.10M	61.30M	76.00M
	Net Income Common Stockholders
15.20M	4.30M	33.50M	-600.00K	15.80M	46.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
63.80M	91.30M	68.90M	69.90M	143.00M	162.90M
	Total Assets
1.12B	1.04B	1.06B	1.01B	911.30M	848.20M
	Total Debt
134.60M	118.30M	83.10M	87.70M	200.00K	400.00K
	Net Debt
76.50M	30.00M	23.30M	21.70M	-134.20M	-158.20M
	Total Liabilities
472.50M	406.00M	405.60M	387.50M	256.50M	205.20M
	Stockholders Equity
650.30M	637.80M	653.40M	626.90M	654.80M	643.00M
Cash Flow		Free Cash Flow
72.00M	2.50M	-6.30M	-114.60M	-12.70M	126.10M
	Operating Cash Flow
90.60M	23.00M	27.80M	-73.90M	7.40M	141.50M
	Investing Cash Flow
-16.30M	-18.00M	-12.90M	-53.20M	-18.40M	-20.90M
	Financing Cash Flow
-39.00M	24.40M	-18.30M	60.10M	-12.10M	-10.40M

Astec Technical Analysis

Technical Analysis Sentiment

Positive

Last Price39.92

Price Trends

50DMA

36.51

Positive

100DMA

35.14

Positive

200DMA

34.25

Positive

Market Momentum

MACD

1.20

Positive

RSI

56.51

Neutral

STOCH

15.49

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASTE, the sentiment is Positive. The current price of 39.92 is above the 20-day moving average (MA) of 39.66, above the 50-day MA of 36.51, and above the 200-day MA of 34.25, indicating a bullish trend. The MACD of 1.20 indicates Positive momentum. The RSI at 56.51 is Neutral, neither overbought nor oversold. The STOCH value of 15.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ASTE.

Astec Risk Analysis

Astec disclosed 28 risk factors in its most recent earnings report. Astec reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

We may not be able to adequately manage the risks associated with our products and systems, including increased warranty costs. Q4, 2024

Astec Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSK	76 Outperform	$6.51B	10.80	15.24%	1.93%	5.95%	-10.59%
HY	74 Outperform	$701.12M	7.05	21.56%	3.54%	-0.32%	-35.10%
ASTE	66 Neutral	$886.10M	58.92	2.33%	1.34%	1.99%	-39.02%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
SHYF	63 Neutral	$365.50M	809.30	0.18%	2.04%	-4.08%	―
TWI	61 Neutral	$446.57M	―	-2.65%	―	5.64%	-124.05%

* Industrials Sector Average

Performance Comparison

ASTE

Astec

39.92

7.64

23.67%

OSK

Oshkosh

101.06

-9.26

-8.39%

SHYF

Shyft Group

10.44

-1.90

-15.40%

TWI

Titan International

7.25

-1.01

-12.23%

Hyster-Yale Materials Handling

41.49

-32.45

-43.89%

Astec Corporate Events

M&A TransactionsFinancial Disclosures

Astec Announces Q1 Results and TerraSource Acquisition

Positive

Apr 29, 2025

On April 29, 2025, Astec Industries announced its first-quarter financial results, reporting net sales of $329.4 million and a net income of $14.3 million. The company also revealed a definitive agreement to acquire TerraSource Holdings, LLC for $245 million, aiming to enhance its market position and expand its product offerings in material processing equipment. This acquisition aligns with Astec’s growth strategy, promising to increase scale, improve margins, and provide accretive earnings from day one.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.