ARGAN SA (ARG) AI Stock Analysis

• Market Cap: €1.69B
• Dividend Yield: 5.11%
• Average Volume (3M): 27.51K
• Price to Earnings (P/E): 5.7
• Beta (1Y): 0.56
• Revenue Growth: 7.53%
• EPS Growth: 189.00%
• Country: FR
• Employees: 28
• Sector: Industrials
• Sector Strength: 72
• Industry: REIT - Industrial
• EPS (TTM): 5.32
• Shares Outstanding: 25,737,688
• 10 Day Avg. Volume: 51,056
• 30 Day Avg. Volume: 27,506
• PEG Ratio: -0.03
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 6.24
• P/FCF Ratio: 8.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €70.00
• Price Target Upside: 6.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 5.16
• Revenue Forecast (FY): €181.61M

• Rating: 73 Outperform
• Price Target: €72.00 ▲(9.92% Upside)

ARGAN SA's overall stock score is driven by its strong financial performance and attractive valuation. The company's robust revenue growth and profitability, coupled with a low P/E ratio and high dividend yield, make it a compelling investment. However, mixed technical indicators suggest caution in the short term.

Positive Factors

Revenue Growth

The consistent revenue growth indicates expanding market presence and effective business strategies, supporting long-term financial health.

Profit Margins

Strong profit margins reflect efficient operations and pricing power, which can sustain profitability and competitive advantage over time.

Cash Flow Improvement

Improving cash flow enhances financial flexibility, enabling the company to invest in growth opportunities and manage debt effectively.

Negative Factors

Debt Levels

High debt levels can strain financial resources and limit strategic options, posing a risk to long-term stability if not managed carefully.

Debt Monitoring

While the capital structure is balanced, ongoing monitoring is crucial to prevent debt from undermining financial health and growth potential.

Past Volatility

Historical volatility suggests potential risks in maintaining consistent performance, necessitating strategies to mitigate future fluctuations.

ARGAN SA Business Overview & Revenue Model

Company Description

ARGAN SA (ARG) is a prominent player in the construction and engineering sector, specializing in the development and management of energy and infrastructure projects. The company operates primarily in the power generation sector, focusing on the construction and maintenance of power plants and related facilities. With a commitment to sustainability and innovation, ARGAN SA also engages in renewable energy projects, thereby enhancing its portfolio and contributing to the transition towards cleaner energy solutions.

How the Company Makes Money

ARGAN SA generates revenue through several key streams, primarily focusing on contracting services for the construction of power facilities. The company earns significant income from long-term contracts with governmental and private sector clients for the development of energy infrastructure projects. Additionally, ARGAN SA capitalizes on maintenance and operational services for power plants, providing ongoing support and ensuring efficient operations. The company has established strategic partnerships with various stakeholders in the energy sector, which enhances its project pipeline and can lead to lucrative joint ventures. Furthermore, ARGAN SA's investments in renewable energy projects not only diversify its portfolio but also tap into the growing demand for sustainable energy solutions, contributing to its overall revenue growth.

ARGAN SA Financial Statement Overview

Summary

ARGAN SA shows strong revenue growth and profitability with a stable balance sheet. The company has effectively managed to recover from past financial challenges, displaying resilience and strategic management. Continued focus on debt management and maintaining cash flow strength will be crucial for sustaining growth.

Income Statement

ARGAN SA's income statement shows strong revenue growth, with a 8.2% increase from 2023 to 2024 and consistent profit margins. The gross profit margin stands at 84%, and the net profit margin has recovered significantly to 102.8% in 2024 after a challenging 2023. The EBIT and EBITDA margins are robust at 77.7% and 123.6%, respectively, reflecting efficient operations. Despite past volatility, the company has shown resilience and potential for stable future performance.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 0.84, indicating a balanced capital structure. The equity ratio is strong at 52.2%, demonstrating a solid equity base. Return on equity has improved significantly to 11% in 2024, highlighting efficient use of equity. However, the company should be cautious about its total debt level, which remains substantial.

Cash Flow

Cash flow analysis reveals a positive trajectory, with free cash flow growth rate improving significantly after a dip in previous years. The operating cash flow to net income ratio is healthy at 0.71, and the free cash flow to net income ratio is strong at 0.71, indicating good cash conversion from profits. Continued focus on maintaining positive free cash flow will be key for future stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	246.94M	238.97M	220.78M	197.92M	185.67M	171.04M
Gross Profit	203.33M	200.89M	180.63M	161.10M	153.63M	138.56M
EBITDA	193.34M	295.55M	-222.97M	150.25M	147.41M	134.55M
Net Income	290.70M	245.70M	-263.45M	95.09M	668.11M	278.86M
Balance Sheet
Total Assets	4.31B	4.26B	4.07B	4.44B	4.50B	3.39B
Cash, Cash Equivalents and Short-Term Investments	32.27M	85.69M	51.96M	169.25M	523.16M	37.47M
Total Debt	1.83B	1.87B	2.01B	2.04B	2.21B	1.77B
Total Liabilities	1.97B	2.00B	2.15B	2.18B	2.34B	1.92B
Stockholders Equity	2.30B	2.23B	1.89B	2.22B	2.13B	1.48B
Cash Flow
Free Cash Flow	192.72M	173.52M	186.15M	135.76M	48.20M	-151.06M
Operating Cash Flow	192.91M	173.68M	186.29M	135.92M	172.19M	132.78M
Investing Cash Flow	-23.48M	-34.77M	-161.19M	-246.29M	-68.95M	-227.86M
Financing Cash Flow	-200.40M	-105.16M	-142.45M	-243.58M	382.49M	115.73M

ARGAN SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 65.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:ARG, the sentiment is Negative. The current price of 65.5 is below the 20-day moving average (MA) of 66.59, below the 50-day MA of 65.90, and above the 200-day MA of 63.54, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 40.54 is Neutral, neither overbought nor oversold. The STOCH value of 18.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:ARG.

ARGAN SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARG	73 Outperform	€1.69B	5.74	13.30%	5.11%	7.53%	189.00%
BASS	73 Outperform	€790.29M	8.57	11.53%	2.04%	23.50%	76.81%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%