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Astec (ASTE)
NASDAQ:ASTE

Astec (ASTE) AI Stock Analysis

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Astec

(NASDAQ:ASTE)

Rating:66Neutral
Price Target:
$47.00
▲(10.33%Upside)
Astec Industries scores a 70.6, driven by strong financial performance and strategic acquisitions. The company's solid cash flow and balance sheet underpin its financial stability, while technical indicators suggest positive momentum. The high P/E ratio raises valuation concerns, but the positive earnings call and acquisition of TerraSource support a cautiously optimistic outlook.
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)

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 solutions to construction and mining companies. The company's key revenue streams include the manufacturing and distribution of asphalt plants, pavers, concrete plants, and rock breaking equipment. Astec also offers equipment financing and leasing options to its clients, which contribute to its earnings. Service and part sales represent additional revenue streams, as the company provides maintenance and parts replacement services for its machinery. Astec's earnings are further boosted by strategic partnerships and acquisitions that expand its product offerings and market reach.

Astec Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 21.16%|
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
65
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
70
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
72
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.33B1.31B1.34B1.27B1.10B1.02B
Gross Profit343.60M327.90M330.80M264.10M251.70M240.10M
EBITDA65.60M51.40M77.30M71.10M61.30M76.00M
Net Income15.20M4.30M33.50M-600.00K15.80M46.00M
Balance Sheet
Total Assets1.06B1.04B1.06B1.01B911.30M848.20M
Cash, Cash Equivalents and Short-Term Investments95.40M91.30M68.90M69.90M143.00M162.90M
Total Debt107.50M118.30M83.10M87.70M200.00K400.00K
Total Liabilities402.90M406.00M405.60M387.50M256.50M205.20M
Stockholders Equity653.20M637.80M653.40M626.90M654.80M643.00M
Cash Flow
Free Cash Flow72.00M2.50M-6.30M-114.60M-12.70M126.10M
Operating Cash Flow90.60M23.00M27.80M-73.90M7.40M141.50M
Investing Cash Flow-16.30M-18.00M-12.90M-53.20M-18.40M-20.90M
Financing Cash Flow-39.00M24.40M-18.30M60.10M-12.10M-10.40M

Astec Technical Analysis

Technical Analysis Sentiment
Positive
Last Price42.60
Price Trends
50DMA
39.65
Positive
100DMA
36.91
Positive
200DMA
35.36
Positive
Market Momentum
MACD
0.80
Negative
RSI
62.53
Neutral
STOCH
89.28
Negative
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 42.6 is above the 20-day moving average (MA) of 40.62, above the 50-day MA of 39.65, and above the 200-day MA of 35.36, indicating a bullish trend. The MACD of 0.80 indicates Negative momentum. The RSI at 62.53 is Neutral, neither overbought nor oversold. The STOCH value of 89.28 is Negative, 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 0 New Risks

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
66
Neutral
$974.13M64.772.33%1.22%1.99%-39.02%
65
Neutral
$10.81B15.655.50%1.89%3.10%-27.09%
$221.48M15.21
OSOSK
77
Outperform
$8.00B13.2715.24%1.64%5.95%-10.59%
HYHY
74
Outperform
$753.36M7.5821.56%3.38%-0.32%-35.10%
68
Neutral
$439.02M972.090.18%1.59%-4.08%
TWTWI
66
Neutral
$682.91M-2.65%5.64%-124.05%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ASTE
Astec
42.60
13.99
48.90%
GENC
Gencor
15.11
-3.45
-18.59%
OSK
Oshkosh
124.21
22.00
21.52%
SHYF
Shyft Group
12.54
1.96
18.53%
TWI
Titan International
10.72
3.60
50.56%
HY
Hyster-Yale Materials Handling
42.54
-22.81
-34.90%

Astec Corporate Events

M&A Transactions
Astec Completes Acquisition of TerraSource Holdings
Positive
Jul 1, 2025

On July 1, 2025, Astec completed the acquisition of TerraSource Holdings, LLC for $245 million in cash, aiming to enhance its market presence and shareholder value. The acquisition is expected to improve Astec’s profit margins and earnings per share, with anticipated synergies and a proforma net leverage ratio of approximately 2.0x net debt/adjusted EBITDA by 2025.

The most recent analyst rating on (ASTE) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on Astec stock, see the ASTE Stock Forecast page.

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
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.Date of analysis: Jul 02, 2025