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Cementos Argos SA (CMTOY)
OTHER OTC:CMTOY
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Cementos Argos SA
(OTC:CMTOY)
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Rating:68Neutral
Price Target:
$17.00
▲(11.99% Upside)
Action:ReiteratedDate:03/05/26
The score is led by very strong valuation (very low P/E and high dividend yield) and improving financial footing (lower leverage and solid free cash flow). Offsetting factors are weak near-term technical momentum and earnings-quality/top-line concerns, while the earnings call was supportive on guidance and shareholder returns but highlighted execution risk for the U.S. growth plan.
Positive Factors
Improved balance sheet
Material deleveraging to ~0.28–0.30 D/E supports durable financial flexibility: lower default and refinancing risk, greater capacity to fund maintenance capex, dividends and strategic investments, and more resilience through construction cycles without needing urgent external financing.
Consistent free cash flow
Sustained positive operating and free cash flow (notably a ~38% rise in 2025) underpins funding for dividends, buybacks and capex from operations. Reliable cash generation reduces dependence on markets and supports capital allocation for growth and shareholder returns over multiple years.
Margin expansion and operational gains
Broad margin improvement and operational gains (higher gross and EBITDA margins) indicate enduring unit economics improvement. Combined with process and sustainability advances, this supports structural margin resilience even if volumes fluctuate, improving long‑term cash earnings power.
Negative Factors
Volatile revenue and earnings quality
Declining revenue and erratic net income reduce predictability of future profits and undermine confidence in reported earnings. This complicates planning, weakens forecasting reliability, and raises the risk that margins and ROCE may revert in adverse cycles despite good cash flow history.
High capital intensity and U.S. execution risk
The U.S. aggregates plan requires very large upfront capital and multi‑year roll-out; permitting, port/build logistics and integration risk create execution uncertainty. Capital intensity slows return timing and could pressure cash or strategic priorities if targets slip.
Regional market headwinds and one-offs
Regional demand softness, kiln shutdowns and nonrecurring impairments signal structural and idiosyncratic pressures that can persist. These reduce volume visibility, raise working‑capital and inventory risks, and can depress returns in specific markets for multiple quarters.
Cementos Argos SA (CMTOY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.07B
Dividend Yield19.86%
Average Volume (3M)1.75K
Price to Earnings (P/E)1.2
Beta (1Y)0.30
Revenue Growth-27.86%
EPS Growth88.08%
CountryUS
Employees4,235
SectorBasic Materials
Sector Strength58
IndustryConstruction Materials
Share Statistics
EPS (TTM)0.34
Shares Outstanding260,374,240
10 Day Avg. Volume0
30 Day Avg. Volume1,753
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.27
Price to Sales (P/S)0.59
P/FCF Ratio6.34
Enterprise Value/Market Cap591.29
Enterprise Value/Revenue0.47
Enterprise Value/Gross Profit1.73
Enterprise Value/Ebitda2.85
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.79
Revenue Forecast (FY)$1.43B
Cementos Argos SA Business Overview & Revenue Model
Company DescriptionCementos Argos S.A. produces and markets cement, ready-mix concrete, clinker, aggregates, and related products in Colombia, the Caribbean, Central America, and the United States. The company also engages in the operation of seaports; and maritime transport and property management businesses. In addition, it exports its products. The company was founded in 1934 and is headquartered in Barranquilla, Colombia. Cementos Argos S.A. is a subsidiary of Grupo Argos S.A.
How the Company Makes MoneyCementos Argos generates revenue primarily through the sale of cement, concrete, and aggregates. The company operates several production plants and distribution facilities, allowing it to effectively serve a wide range of construction projects. Key revenue streams include direct sales to contractors, builders, and retailers, as well as exports to international markets. The company also benefits from long-term contracts with major construction firms and government projects, which provide stable cash flow. Additionally, Cementos Argos invests in technological advancements and sustainability initiatives, which enhance operational efficiency and reduce costs, thus contributing positively to its profitability.
Cementos Argos SA Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive message: strong full-year financial results with margin expansion, robust cash generation, record shareholder returns, tangible regional recoveries (notably Colombia and parts of Central America & the Caribbean), and early but meaningful progress on the U.S. aggregates strategy. Management also introduced a disciplined SPRINT 4.0 with clear distribution and growth milestones. Key challenges were acknowledged — ready-mix volume declines, export impacts from a Cartagena kiln shutdown, one-off impairments and inventory write-downs, political and labor risks, and the sizable capital and execution timeline required for the U.S. expansion. Overall, the positives (record profitability, cash returns, sustainability and operational improvements, and a clear growth framework) materially outweigh the manageable and mostly nonrecurring negatives.Q4-2025 Updates
Positive Updates
Record Profitability and Margin Expansion
Adjusted EBITDA for 2025 was ~COP 1.3 trillion (management cited COP 1.28T / COP 1.3T), expanding 6.6% year-over-year, with an adjusted EBITDA margin of ~25% (215 basis points expansion vs. prior year). Q4 EBITDA was COP 347 billion with a 27% margin. Management reported achieving a 25% margin one year ahead of schedule.
Strong Revenue and Cash Generation
Full-year revenues reached COP 5.2 trillion. Colombia segment revenues were COP 2.8 trillion with adjusted EBITDA COP 812 billion (up 3.6% YoY) and a record Q4 EBITDA/ton of $53. Free cash flow conversion reached 76% of EBITDA in Colombia, highlighting strong cash generation.
Exceptional Shareholder Returns and SPRINT Progress
Cumulative total shareholder return since SPRINT launch (Feb 2023) was reported between 700%–764% in USD; shareholder distributions exceeded COP 3.5 trillion (Felipe cited $1.2 billion distributed), including dividends, buybacks and a spin-off. SPRINT 4.0 introduced an ordinary dividend of COP 430/share (+11% vs. 2025 ordinary dividend), an extraordinary dividend of COP 150/share, and a buyback rollover topped to COP 450 billion.
U.S. Aggregates Strategic Entry and Early Milestones
Reentered U.S. via aggregates platform: first shipment of 47,000 tonnes arrived in Tampa; two additional Southeastern U.S. positions secured; Jason Teter appointed CEO of Argos Materials. Targets include building a U.S. business earning >$200M over time; company disclosed a Phase 1 investment plan of ~$500 million expected to generate ~USD 150M EBITDA by 2030. Near-term EBITDA drag for the U.S. business in 2026 estimated at only $6 million.
Regional Volume Recovery and Performance
Consolidated dispatched cement volumes were 9.3 million tons (flat vs. 2024). Colombia industry demand recovered to 12.7 million tons (+5% YoY). Central America & Caribbean cement volumes reached 4.3 million tons (+8.6% YoY for the year; Q4 regional volumes +12.6% YoY). Dominican Republic and Puerto Rico delivered record or materially improved profitability (Dominican Republic volumes +7%, Puerto Rico EBITDA +20%).
Operational Efficiency and Sustainability Achievements
Company scored 86/100 in the 2025 S&P Corporate Sustainability Assessment, positioning it among top industry performers. Operational improvements included reducing clinker usage to 45% in certain operations, kiln OEE above 90%, and carbon emissions reductions of nearly 20% in referenced operations. A 30% capacity expansion in the Dominican Republic was completed early in the year.
Strong Market and Liquidity Metrics
Share price performance and liquidity improved: stock closed January at COP 13,820 (a 30% YTD return reported) and average daily trading volume increased ~13% vs. 2025 average. Management expects potential inclusion in MSCI Emerging Markets Standard Index in the near term and plans a dual market maker model to further support liquidity.
Concrete 2026 Guidance with Moderate Growth Expectations
2026 guidance: maintain EBITDA margin 24%–26%, ROCE >16% over next two years, adjusted EBITDA guidance COP 1.3–1.4 trillion (midpoint ≈ +6% vs. 2025), CapEx of $80–100 million in LatAm (≈$65M maintenance) and ~$80–100M for the U.S. growth plan in 2026, and a midterm net debt/EBITDA target of 2x within 3–5 years.
Negative Updates
Ready-Mix Volume Decline
Ready-mix dispatched 2.3 million m3 for 2025, down 12% year-over-year, driven by slowdown in the housing segment in Colombia, lack of housing subsidies, and strategic transformation of the Panama ready-mix business.
Export Declines from Colombia and Kiln Shutdown
Exports from Colombia declined materially, driven by a decision to shut down Kiln #3 in Cartagena (Aug 2024) and weaker U.S. demand; consolidated cement dispatches were flat YoY at 9.3 million tons, masking mixed regional performances and lower export volumes.
Impairments and Inventory Write-Downs
Nonrecurring impairments were recorded in Q4: a Puerto Rico impairment (management indicated a cash tax benefit) and a write-down of clinker inventory in Panama because its book cost exceeded current market price. Management expects these to be nonrecurring and not to materially affect future cash flow generation.
Political and Labor Uncertainties Could Pressure Margins
Management flagged potential short-term margin pressure from presidential transitions in key markets (Honduras and Colombia) and a higher-than-usual minimum wage increase in Colombia, which could have short-term cost and demand impacts despite mitigation initiatives.
U.S. Expansion Requires Significant Capital with Timing Risk
The U.S. aggregates strategy requires heavy upfront investment (Phase 1 cited at ~$500 million to reach ~USD 150M EBITDA by 2030). While long-term upside is targeted, there is execution and permitting risk (DOT certifications, port construction) and multi-year cadence of capital deployment (majority of import-platform capital expected in H2 2027–2029).
Panama Market Contraction
Panama experienced industry volume and price declines contributing to slight regional revenue decreases; some inventory impairment reflects weaker local market economics.
Uncertainties Around Market Listings and Timing
Potential ADR listing and MSCI index inclusion are contingent on execution/progress of the U.S. business plan and liquidity/market cap thresholds; management expects readiness for ADR in ~2–3 years and hopes for MSCI upgrade in 2026, but timing is uncertain.
Company Guidance
The company’s guidance calls for 2026 adjusted EBITDA of COP 1.3–1.4 trillion (≈$350 million) — a midpoint ~6% above 2025 — with an EBITDA margin of 24–26% and ROCE sustained above 16% over the next two years; 2026 CapEx is targeted at $80–100 million in Latin America (with at least $65 million for maintenance) plus ~$80–100 million for the U.S. growth plan, while the mid‑term target is to reach ~2.0x net debt/EBITDA within 3–5 years. Under SPRINT 4.0 the company proposes shareholder returns including an ordinary dividend of COP 430/share (an 11% increase vs. 2025) paid in four installments, an extraordinary COP 150/share in April, and a COP 450 billion buyback program rolled over for two years; strategic U.S. targets include achieving positive EBITDA by end‑2027 for the aggregates/imports platform, building to >$200 million EBITDA in ~5 years (Phase‑1 investment ~$500 million to reach ~$150 million EBITDA by 2030), organic EBITDA upside of ~$100–150 million by 2030 with <$500 million investment, and inorganic bolt‑ons adding ~$100–200 million EBITDA by 2030.Cementos Argos SA Financial Statement Overview
Summary
Balance sheet strength has improved materially (debt-to-equity down to ~0.28–0.30) and the company remains consistently free-cash-flow positive. Offsetting this, revenue has recently declined and net income is highly erratic versus cash generation, reducing confidence in earnings quality.Income Statement
Revenue has been volatile and recently declining (2025 down ~7.5% after a slight decline in 2024), which is a near-term headwind. Underlying operating profitability is fairly steady with gross margin improving over time (2020 ~18% to 2025 ~26%) and mid-teens to low-20s EBITDA margins. However, net income and net margin are extremely erratic (notably outsized net profit margins in 2024–2025), which reduces confidence in earnings quality and makes the trend harder to underwrite.58
Neutral
Balance Sheet
Leverage has improved materially versus earlier years, with debt-to-equity moving from high levels in 2020–2023 to a much more conservative ~0.28–0.30 in 2024–2025, supported by higher equity. Returns on equity are strong in 2024–2025, but they also swing sharply across the period, consistent with volatile net income. Overall, the balance sheet trajectory looks healthier and less risky than it did a few years ago, though profitability stability remains a watch item.66
Positive
Cash Flow
The company consistently generates positive operating cash flow and free cash flow across the period, with 2025 free cash flow up strongly (~38%). Free cash flow conversion versus net income is moderate (~0.60–0.65 in 2024–2025), suggesting earnings are not fully translating into cash. Operating cash flow is also low relative to net income in 2024–2025 (coverage ~0.36), reinforcing the view that recent net income strength may be less cash-backed, even though absolute cash generation remains solid.62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.80T | 5.30T | 12.72T | 11.68T | 9.82T |
| Gross Profit | 1.26T | 1.33T | 2.86T | 2.06T | 1.91T |
| EBITDA | 1.02T | 722.90B | 2.64T | 2.15T | 2.14T |
| Net Income | 2.33T | 5.52T | 319.94B | 142.29B | 431.13B |
Balance Sheet | |||||
| Total Assets | 17.19T | 19.94T | 19.51T | 23.27T | 19.57T |
| Cash, Cash Equivalents and Short-Term Investments | 3.59T | 1.07T | 1.01T | 1.26T | 483.39B |
| Total Debt | 2.99T | 3.90T | 7.27T | 8.21T | 7.06T |
| Total Liabilities | 5.83T | 6.00T | 10.44T | 11.20T | 9.36T |
| Stockholders Equity | 10.52T | 13.14T | 8.36T | 11.02T | 9.25T |
Cash Flow | |||||
| Free Cash Flow | 446.43B | 565.91B | 1.30T | 701.98B | 904.44B |
| Operating Cash Flow | 696.35B | 867.83B | 2.16T | 1.42T | 1.36T |
| Investing Cash Flow | 5.03T | 445.81B | -128.93B | -735.05B | 329.95B |
| Financing Cash Flow | -3.07T | -2.33T | -1.65T | -476.37B | -1.86T |
Cementos Argos SA Technical Analysis
Neutral
15.18
Price Trends
16.43
Negative
15.07
Positive
13.24
Positive
Market Momentum
-0.39
Positive
42.20
Neutral
12.88
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMTOY, the sentiment is Neutral. The current price of 15.18 is below the 20-day moving average (MA) of 16.85, below the 50-day MA of 16.43, and above the 200-day MA of 13.24, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 42.20 is Neutral, neither overbought nor oversold. The STOCH value of 12.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CMTOY.
Cementos Argos SA Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.09B | 12.05 | ― | 0.94% | 0.28% | -1.57% | |
71 Outperform | $17.41B | 1.73 | 3.14% | 0.74% | -6.34% | 210.97% | |
70 Outperform | $6.72B | 16.19 | 28.77% | 0.47% | 1.50% | -4.44% | |
68 Neutral | $4.07B | 1.21 | 1.41% | 19.86% | -27.86% | 88.08% | |
64 Neutral | $939.29M | 20.64 | 16.04% | 5.46% | 9.24% | 24.01% | |
63 Neutral | $1.23B | -35.03 | 5.06% | ― | -33.99% | -61.41% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
CMTOY
Cementos Argos SA
15.69
5.71
57.16%
CPAC
Cementos Pacasmayo SAA
10.60
5.29
99.62%
CX
Cemex SAB
11.94
5.75
92.86%
EXP
Eagle Materials
211.45
-8.42
-3.83%
LOMA
Loma Negra Compania Industrial Argentina Sociedad Anonima
10.09
-0.68
-6.31%
TTAM
Titan America SA
17.19
2.05
13.54%
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.