Why Argan Stock Was a Winner This Week
Key Points
It missed on revenue for the period, but investors clearly didn't mind.
One analyst was sufficiently impressed to upgrade his recommendation on the stock.
An impressive earnings report published late Thursday was the news item propelling Argan (NYSE: AGX) stock well higher on a week-over-week basis. According to data compiled by S&P Global Market Intelligence, the industrial company's shares rose by almost 20% over the five-day period.
Double-digit gains in key metrics
Argan, which specializes in a range of services for the construction, power, and industrial sectors, published both its fourth-quarter and full-year fiscal 2026 results. For the quarter, revenue rose nearly 13% year over year to slightly more than $262 million.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Bottom-line profitability rose more impressively. Net income under generally accepted accounting principles (GAAP) zoomed to $49.2 million ($3.47) from the year-ago profit of $31.4 million.
This shook out into a mixed quarter for Argan, as it obliterated the $2.13 per share consensus analyst estimate for per-share GAAP profitability, but fell short of those pundits' collective $271 million revenue forecast.
Much of the improvement in those key fundamentals came purely from volume -- Argan said it took in $2.5 billion in new contract value over the course of the year.
A pundit gets more bullish
Any time a company posts strong gains well in the double digits, analysts are likely to reconsider their stances on its future. This was the case with Michael Fairbanks of JPMorgan Chase unit JPMorgan, who upgraded his recommendation on Argan to overweight (read: buy) from his preceding neutral. He set a price target of $550 per share.
Like other smart players in the industrial and construction fields, Argan has been capitalizing on the build-out of data centers to better accommodate artificial intelligence (AI) technology. I think that trend has much more room to run, and consequently Argan and its peers should continue to do well in the coming quarters... and even years.
JPMorgan Chase is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.