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Astec Industries, Inc. (ASTE)
NASDAQ:ASTE
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Astec
(NASDAQ:ASTE)
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Rating:67Neutral
Price Target:
$63.00
▲(43.18% Upside)
Action:ReiteratedDate:02/25/26
Score is driven primarily by improved TTM profitability and cash generation, tempered by higher leverage and uneven multi-year cash conversion. Technicals are supportive with a clear uptrend, while valuation is a moderate headwind due to a higher P/E and low yield. Earnings-call tone and 2026 EBITDA guidance are constructive but include identifiable end-market and execution risks.
Positive Factors
Aftermarket Parts & Service Recurring Revenue
A sizable and growing parts & service business (30.7% of revenue) provides recurring, higher-margin revenue and supports steadier cash flow across equipment cycles. Over 2–6 months this installed-base monetization cushions revenue volatility from project-driven equipment sales and strengthens customer stickiness.
Strong Backlog & Order Momentum
A healthy backlog and >1.0 book-to-bill give multi-month revenue visibility and better production planning. This supports steadier manufacturing utilization, parts demand, and margin sustainability over the near term, reducing revenue downside from short-term order fluctuations.
Margin Expansion and Improved Cash Generation
Trailing results show meaningful margin recovery and materially better free cash flow versus 2024, indicating operational leverage and tighter cost control. Improved profitability and rising FCF increase ability to fund capex, acquisitions, and deleveraging, supporting durable financial health if sustained.
Negative Factors
Rising Leverage
Leverage has increased substantially, reducing financial flexibility and raising interest and refinancing risk if cyclical demand weakens. Higher debt levels can constrain strategic options, limit ability to absorb working-capital swings, and pressure margins during industry downturns.
Uneven Cash Conversion and Cyclical Earnings
Profitability gains have not consistently translated into cash over multiple years, exposing the company to timing-driven liquidity swings. In a capital-intensive, cyclical industry, uneven cash conversion heightens risk to capex funding, debt servicing and shareholder returns if order momentum falters.
Operational Pockets of Weakness & Funding Dependence
Segment-specific downturns and integration work at TerraSource create operational drag and execution risk. Additionally, reliance on continued public infrastructure funding and specific end-market recoveries makes performance sensitive to policy and sector cycles, limiting predictable growth.
Astec (ASTE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.34B
Dividend Yield1.14%
Average Volume (3M)169.40K
Price to Earnings (P/E)34.8
Beta (1Y)1.42
Revenue Growth6.66%
EPS GrowthN/A
CountryUS
Employees4,148
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)1.06
Shares Outstanding22,875,841
10 Day Avg. Volume156,291
30 Day Avg. Volume169,403
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)1.45
Price to Sales (P/S)0.70
P/FCF Ratio46.13
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue1.17
Enterprise Value/Gross Profit4.36
Enterprise Value/Ebitda14.44
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)3.28
Revenue Forecast (FY)$1.47B
Astec Business Overview & Revenue Model
Company DescriptionAstec Industries, Inc. designs, engineers, manufactures, and markets equipment and components used primarily in road building and related construction activities in the United States and internationally. The company operates in two segments, Infrastructure Solutions and Materials Solutions. The Infrastructure Solutions segment offers asphalt plants and related components, heaters, concrete dust control systems, asphalt pavers, vaporizers, concrete material handling systems, screeds, heat recovery units, paste back-fill plants, asphalt storage tanks, hot oil heaters, bagging plants, fuel storage tanks, industrial and asphalt burners and systems, custom batch plants, material transfer vehicles, soil stabilizing-reclaiming machinery, blower trucks and trailers, milling machines, soil remediation plants, wood chippers and grinders, pump trailers, concrete batch plants, control systems, liquid terminals, storage equipment and related parts, construction and retrofits, polymer plants, and concrete mixers, as well as engineering and environmental permitting services. This segment provides its products to asphalt producers, highway and heavy equipment contractors, ready mix concrete producers, contractors in the construction and demolition recycling markets, and governmental agencies. The Materials Solutions segment designs and manufactures crushing equipment, mobile plants, bulk material handling solutions, vibrating equipment, screening equipment, electrical control centers, modular plants and systems, conveying equipment, plant automation products, portable plants, and mineral processing equipment, as well as offers consulting and engineering services. Astec Industries, Inc. was incorporated in 1972 and is headquartered in Chattanooga, Tennessee.
How the Company Makes MoneyAstec generates revenue primarily through the sale of its equipment and machinery, along with aftermarket parts and services. The company's revenue model is diversified across several key streams, including direct sales of machinery to contractors and construction companies, as well as service contracts and parts sales that provide ongoing support and maintenance for their products. Significant partnerships with major construction firms and infrastructure projects enhance Astec's market presence and contribute to its earnings. Additionally, the company benefits from cyclical demand in the construction industry, which can lead to increased sales during periods of infrastructure development and investment.
Astec Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call communicated multiple positive operating and financial developments: record quarterly sales, strong full-year adjusted EBITDA at the high end of guidance, significant adjusted EPS growth, robust parts growth, meaningful backlog increase, accretive acquisitions, margin expansion across segments, and a solid liquidity position. Challenges were acknowledged—most notably softness in forestry and mobile paving equipment, TerraSource inventory/fill-rate work, working capital timing, and reliance on continued infrastructure funding—but management provided clear remediation plans, integration progress, and conservative 2026 guidance that factors in risks. On balance, the positive results, guidance lift, strategic acquisitions, and tangible margin/cash generation improvements outweigh the near-term operational headwinds.Q4-2025 Updates
Positive Updates
Record Quarterly and Full-Year Net Sales
Recorded a company-high fourth-quarter net sales of $400.6 million; full-year net sales increased 8.1% year-over-year driven by organic growth and acquisitions (TerraSource).
Strong Adjusted EBITDA and Margin Expansion
Reported Q4 adjusted EBITDA of $44.7 million (Q4 adj. EBITDA margin 11.2%) and full-year adjusted EBITDA of $140.7 million (at the high end of guidance). Full-year adjusted EBITDA margin expanded to 10.0%, an increase of 140 basis points versus prior year.
Adjusted EPS Growth
Adjusted earnings per share: $1.06 in the fourth quarter; full-year adjusted EPS of $3.33, up 28.6% year-over-year.
Parts & Aftermarket Growth
Parts sales rose 19.7% versus the prior-year fourth quarter; full-year parts sales totaled $432.7 million, an 11.5% increase and representing 30.7% of total 2025 net sales. Company continues to prioritize recurring parts and service revenue.
Backlog, Book-to-Bill and Order Momentum
Backlog increased to roughly $504–514 million, representing sequential growth of ~14.4% and year-over-year growth of ~22.5%. Consolidated book-to-bill ratio was 116%, with implied orders up $46 million (11%) from the prior quarter referenced.
Strategic Acquisitions and Integration Progress
Closed acquisitions of TerraSource and CWMF (collectively > $200 million of annual revenue). CWMF reported accretive from day one; TerraSource integration progressing (brand consolidation ahead of CONEXPO), with expected benefits realized in 2026.
Segment-Level Recoveries and Margin Gains
Material Solutions showed recovery late in the year. Segment-level results: Material Solutions net sales increased ~18.2% to ~$553 million with adjusted EBITDA up ~49.5% to $55.6 million (adj. margin improved to 10.1%, +210 bps); Infrastructure Solutions delivered strong margin expansion (full-year adj. EBITDA margin noted at ~15.7%, +120 bps).
Strong Balance Sheet and 2026 Financial Guidance
Quarter-end liquidity of $314.7 million (cash $70 million, available credit $244.7 million). Net debt to adjusted EBITDA ~2x. 2026 guidance: adjusted EBITDA $170–$190 million, effective tax rate 25–28%, capex $40–$50 million, D&A $55–$65 million.
Market Tailwinds (Infrastructure & Data Centers)
Company cites favorable multiyear demand drivers: federal and state infrastructure funding, healthy state/local budgets, and accelerating demand tied to data center construction. Cited industry aggregate market CAGR of 3.41% through 2033.
Digital & Commercial Initiatives
Rolling out digital platforms (Signal and MyAstec) to improve equipment utilization, service and parts penetration; several new/substantially upgraded products and digital offerings to be showcased at CONEXPO, aimed at driving parts, service and product differentiation.
Negative Updates
Softness in Forestry and Mobile Paving Equipment
Forestry and mobile paving equipment were challenged during 2025, with forestry notably down during the last 12–18 months due to weaker paper & pulp demand and limited storm-related activity; backlog for these categories remains at the lower end of historical ranges despite recent Q4 increases.
TerraSource Fill-Rate and Inventory Work
TerraSource required inventory and fill-rate improvements after acquisition; management expects to reach desired fill-rate/inventory targets within 3–6 months and views remaining work as an operational focus to realize synergies.
Segment Timing and Mixed Quarterly Performance
Some segment-level quarter comparisons were mixed (e.g., Infrastructure Solutions Q4 dynamics showed offsetting strength in asphalt/concrete plants and softness in mobile paving/forestry), indicating pockets of near-term variability across product lines.
Dependence on External Funding and Market Uncertainty
Guidance and upside are partially contingent on continued infrastructure spending (future highway/infrastructure bills) and execution; while 2026 funding was approved, further legislative developments remain an upside risk to hitting the high end of guidance.
Working Capital and Year-End Timing Risks
Working capital management remains an area of focus; year-end inventory and receivables timing can create volatility in cash conversion, although management expects modest improvement in 2026.
Unquantified Data Center Exposure Near Term
Company sees accelerating demand from data center projects but has not provided a precise contribution figure; management expects the quoting pipeline to support guidance but has not quantified near-term revenue attribution.
Company Guidance
Astec guided full-year 2026 adjusted EBITDA of $170–$190 million, an effective tax rate of 25–28%, capital expenditures of $40–$50 million, depreciation & amortization of $55–$65 million, and quarterly adjusted SG&A of $70–$80 million. For context, 2025 results included adjusted EBITDA of $140.7M (10.0% margin, +140 bps YoY), Q4 net sales of $400.6M and Q4 adjusted EBITDA of $44.7M (11.2% margin), full-year net sales +8.1%, adjusted EPS of $3.33 for the year and $1.06 in Q4, parts sales of $432.7M (+11.5% YoY; 30.7% of sales) with Q4 parts +19.7% YoY, backlog ~ $514M (seq. +14.4%, YoY +22.5%) with a book‑to‑bill of 116%, total liquidity of $314.7M (cash $70M, available credit $244.7M) and net debt/adjusted EBITDA of ~2x.Astec Financial Statement Overview
Summary
TTM operating rebound is solid (higher revenue, stronger margins, and meaningfully better free cash flow versus 2024), but the multi-year profile is cyclical and cash conversion is uneven. Balance-sheet risk increased as debt rose sharply and leverage is higher than prior years, reducing flexibility if demand softens.Income Statement
Profitability has meaningfully improved in TTM (Trailing-Twelve-Months): revenue rose to ~$1.41B with stronger margins (gross margin ~27.2%, EBIT margin ~7.2%, net margin ~3.5%) versus a very weak 2024 (near-breakeven net margin ~0.3%). The multi-year picture is volatile—2022 posted a slight loss and 2024 saw a sharp profit compression—so earnings quality looks cyclical, but the latest TTM rebound is a clear positive.71
Positive
Balance Sheet
The balance sheet shows a notable increase in leverage in TTM, with debt up to ~$319.6M and debt-to-equity at ~0.53 (well above 2021–2024 levels). Equity has grown (to ~$681.6M) and returns improved in TTM (return on equity ~7.3%) from 2024’s very low level, but the faster debt build adds risk and reduces financial flexibility if end-market demand softens.58
Neutral
Cash Flow
Cash generation improved in TTM with operating cash flow of ~$61.4M and free cash flow of ~$45.5M (free cash flow up ~22%), a major step up from 2024’s ~$2.5M free cash flow. However, cash flow conversion remains uneven across years (notably negative operating and free cash flow in 2022), and in TTM free cash flow covers only ~73% of net income, suggesting profitability is not fully translating into cash.62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.41B | 1.31B | 1.34B | 1.27B | 1.10B |
| Gross Profit | 374.20M | 327.90M | 331.10M | 264.10M | 249.50M |
| EBITDA | 67.20M | 51.40M | 115.00M | 69.90M | 61.30M |
| Net Income | 38.80M | 4.30M | 33.50M | -100.00K | 15.80M |
Balance Sheet | |||||
| Total Assets | 1.37B | 1.04B | 1.06B | 1.01B | 905.80M |
| Cash, Cash Equivalents and Short-Term Investments | 72.00M | 91.30M | 68.90M | 66.70M | 142.70M |
| Total Debt | 319.60M | 118.30M | 83.10M | 87.70M | 2.90M |
| Total Liabilities | 685.60M | 406.00M | 405.60M | 387.50M | 254.50M |
| Stockholders Equity | 681.60M | 637.80M | 653.40M | 626.90M | 650.80M |
Cash Flow | |||||
| Free Cash Flow | 21.50M | 2.50M | -6.30M | -114.60M | -12.70M |
| Operating Cash Flow | 61.40M | 23.00M | 27.80M | -73.90M | 7.40M |
| Investing Cash Flow | -287.80M | -18.00M | -12.90M | -53.20M | -18.40M |
| Financing Cash Flow | 206.10M | 24.40M | -18.30M | 60.10M | -12.10M |
Astec Technical Analysis
Positive
44.00
Price Trends
50.45
Positive
47.99
Positive
45.19
Positive
Market Momentum
2.76
Negative
72.72
Negative
55.88
Neutral
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 44 is below the 20-day moving average (MA) of 55.69, below the 50-day MA of 50.45, and below the 200-day MA of 45.19, indicating a bullish trend. The MACD of 2.76 indicates Negative momentum. The RSI at 72.72 is Negative, neither overbought nor oversold. The STOCH value of 55.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ASTE.
Astec Risk Analysis
Astec disclosed 30 risk factors in its most recent earnings report. Astec reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Astec Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $1.42B | 20.10 | 14.61% | 1.24% | 11.41% | 13.05% | |
67 Neutral | $1.34B | 34.83 | 7.37% | 1.14% | 6.66% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $551.51M | 92.97 | 0.44% | 1.59% | -2.36% | -73.77% | |
58 Neutral | $674.05M | -108.80 | -1.05% | ― | -2.75% | 22.20% | |
58 Neutral | $429.43M | 2.10 | 84.07% | 3.59% | -22.95% | ― | |
51 Neutral | $679.92M | 260.29 | 0.51% | 4.61% | -8.30% | -98.18% |
* Industrials Sector Average
ASTE
Astec
61.31
26.27
74.97%
CMCO
Columbus Mckinnon
19.54
2.07
11.84%
LNN
Lindsay
134.20
3.07
2.34%
TWI
Titan International
10.51
1.78
20.39%
WNC
Wabash National
10.21
-1.21
-10.60%
HY
Hyster-Yale Materials Handling
38.18
-13.09
-25.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.