Argan (AGX): Evaluating Valuation After Strong Profit Growth Despite Softer Quarterly Sales
Argan (AGX) just posted another jump in profits for its third quarter and nine month results, even as quarterly sales slipped slightly. That mix of margin strength and discipline is what has investors leaning in.
See our latest analysis for Argan.
Even with a recent pullback, including a 7 day share price return of negative 7.21 percent, Argan’s 90 day share price return of 40.06 percent and three year total shareholder return of 868.35 percent suggest momentum is still firmly in its corner as management talks up an active pipeline and potential acquisitions.
If Argan’s run has you thinking about what else could surprise to the upside, this might be a good moment to explore fast growing stocks with high insider ownership.
With earnings surging faster than sales and management eyeing acquisitions, Argan now trades just below analyst targets. This raises the key question: is this a fresh buying window, or is future growth already priced in?
Most Popular Narrative: 10.2% Overvalued
Argan’s most followed narrative pegs fair value below the last close of $325.77, creating a valuation gap that hinges on long term project execution.
Record backlog and continued project wins across gas, renewables, water treatment, and recycling plants provide multi year revenue visibility, indicating potential for increased operating leverage and higher gross margins as larger projects are executed successfully.
Curious how sustained double digit growth, resilient margins, and a richer future earnings multiple can still point to downside from here? Unpack the full narrative math.
Result: Fair Value of $295.75 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, concentrated exposure to large gas projects and lumpy margins means any delays or cost overruns could quickly challenge today’s upbeat valuation story.
Find out about the key risks to this Argan narrative.
Build Your Own Argan Narrative
If you see Argan’s story differently or want to dig into the numbers yourself, you can build a custom view in minutes: Do it your way.
A great starting point for your Argan research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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