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what it is
Argan builds and starts up power plants and related industrial projects for customers in the U.S., Ireland, and the U.K.
how it gets paid
Last year Argan made $874M in revenue. Power Services was the main engine at $690M, or 79% of sales.
why it's growing
Revenue grew 52.5% in FY2025 (year ended Jan. 31, 2025). Forward EPS/revenue views (~$9.20 EPS on ~6–7% revenue growth) are analyst-style estimates—re-verify against current FY2026 guidance and filings before you treat them as facts.
what just happened
Q3 FY2026 (ended Oct. 31, 2025): revenue ~$251.2M (−2.3% YoY); diluted EPS $2.17 vs. $2.00 prior-year quarter. The old $683M figure is nine-month revenue, not the quarter.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
15/100 earnings predictability — expect surprises
52.9x trailing p/e — you're paying up for this one
0.6% dividend yield — cash in your pocket every quarter
32.0% return on capital — every dollar works hard here
xvary composite: 64/100 — average
What they do
Argan builds and starts up power plants and related industrial projects for customers in the U.S., Ireland, and the U.K.
Power Services is 79% of revenue. Industrial Services is 19%. Telecom Services is 2%. You are not buying a random contractor mix; you are buying one crew that handles engineering, procurement, construction, and commissioning → building, buying, assembling, and starting up power plants → so the client hands the whole mess to one contractor. That focus shows up in the numbers, with a $874M revenue base and a 32.0% return on capital.
How they make money
$874M
annual revenue · their business grew +52.5% last year
Power Services
$690M
Industrial Services
$166M
Telecom Services
$17M
The products that matter
builds and services power projects
Power Services
$690M · 79% of revenue
this is the thesis in one line: $690M of revenue tied to power plant construction and related work. When you buy AGX, this is mostly what you are buying.
core segment
industrial field services
Industrial Services
$166M · 19% of revenue
big enough to help, not big enough to rescue the story. At $166M, this segment matters, but Power Services still sets the tone.
secondary driver
telecom infrastructure services
Telecom Services
$17M · 2% of revenue
$17M is 2% of revenue. It exists. It does not drive valuation, and it does not save the thesis if the power business wobbles.
small contributor
Key numbers
$874M
revenue
That is the size of the whole machine. A 10% swing is about $87M, so small execution misses become loud.
52.9x
trailing p/e
You are paying $52.90 for $1 of trailing earnings. That leaves little room if growth stumbles.
17.0%
operating margin
A 17.0% operating margin means $17 of every $100 of sales stays after running the business.
32.0%
return on capital
A 32.0% return on capital means each $100 invested has been earning about $32 in profit. That is strong, and the price already knows it.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- net profit margin 15.5% — keeps 16 cents of every dollar in revenue
- return on equity 32% — $0.32 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in AGX 3 years ago → it's now worth $115,930.
The index would have given you $13,880.
source: institutional data · total return
What just happened
mixed vs. whisper
Q3 FY2026 revenue ~$251M (quarter) · nine-month revenue ~$683M (YTD). Diluted EPS $2.17 vs. ~$2.20 consensus (small miss).
Gross margin on the quarter was 18.7% (46.9M / 251.2M). Net income ~$30.7M. Backlog ~$3.0B as of Oct. 31, 2025 vs. ~$1.36B at Jan. 31, 2025 (Business Wire, Dec. 4, 2025).
$251M
Q3 FY2026 revenue
$2.17
Q3 diluted EPS
18.7%
Q3 gross margin
the number that mattered
Labeling $683M as “the quarter” was the failure mode—nine-month YTD vs. ~$251M actual Q3 revenue is how the filing reads.
-
our profit forecasts suggest argan's double-digit profit growth continues.
-
in the recently completed fiscal 2025, we lowered our profit forecast to $8.35 per share, from $8.60.
-
even as argan's bottom-line advances moderated in the year's second half, our estimate implies a 35% profit increase for 2025.
-
this year, we expect a 10% rise in earnings per share, to $9.20, driven by a 6% to 7% increase in revenues and a modest boost to the profit margin. Growth rate moderated in the october period.
-
the top line of $251 million in the fiscal third quarter (ended october 31, 2025) fell about 2% from the prior-year level.
sources: Business Wire (Dec. 4, 2025) · arganinc.com/investor-center
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What could go wrong
the main risk is not abstract. it is what happens when a concentrated power-project backlog meets real-world delays, cost pressure, or weaker bidding discipline.
high
large-project concentration
Argan is a contractor, not a subscription model. When a small number of large jobs drive results, one delay, cancellation, or cost overrun can hit revenue and margins at the same time.
most exposed area: Power Services at $690M, or 79% of revenue
high
backlog timing is not the same as backlog cash
A $6B backlog sounds like certainty. It is not. It is committed work that still has to move through permits, customer schedules, equipment delivery, and site execution before it becomes revenue.
what's exposed: the jump from $874M revenue to the $990M fiscal 2026 estimate
high
margin normalization
A 14.4% net margin is unusually strong for a contractor. If project mix gets worse or bidding gets tighter, the stock loses the earnings cushion that helps justify a premium multiple.
why it matters: AGX trades at 52.9x trailing earnings and about 48x forward earnings
med
valuation already discounts a lot of good news
The stock sits above the $391 analyst midpoint target after a huge three-year run. That does not make it wrong. It does mean execution has to stay clean for the price to keep making sense.
price tension: $441.71 current price versus $391 midpoint target
one business line at 79% of revenue and one valuation at 52.9x earnings is a simple setup: if execution stays sharp, the stock can keep looking justified. If it slips, there is not much room for sentiment to be generous.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
backlog conversion next quarter
watch whether the $6B backlog starts showing up in revenue fast enough to support the $990M fiscal 2026 estimate. backlog is the promise. revenue is the proof.
risk
major project awards, delays, or cancellations
this is a concentrated project business. one big award can move the year. one delayed job can do the same thing in reverse.
metric
margin durability
14.4% net margin is the unusual part of the story. if that number starts fading, the valuation argument gets much tougher.
trend
whether the stock keeps outrunning analyst targets
AGX already trades above the $391 midpoint target. if estimates rise, the market was early. if they do not, you are relying on multiple expansion that already happened.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they still think the tape has not fully cooled.
risk profile
average
stability score 3 — middle-of-the-road risk. not especially defensive. not chaos either.
chart momentum
average
technical score 3 — no heroic signal here beyond a stock that already had an extraordinary run.
earnings predictability
15 / 100
low predictability means quarter-to-quarter numbers swing with project timing. if you own AGX, you need to tolerate that noise.
source: institutional data
Institutional activity
150 buyers vs. 156 sellers in 4q2025. total institutional holdings: 13.2M shares.
source: institutional data
Price targets
3-5 year target range
$147
$635
$442
current price
$391
target midpoint · 11% from current · 3-5yr high: $605 (+35% · 9% ann'l return)
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