AGX

United Rentals, Inc. URI reported third-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year. Strong rental demand and operating efficiencies supported the results. Fleet productivity, which combines rental rates, time utilization and mix, improved 6.5% year over year. URI stock inched up 1% in yesterday's after-hours trading, following the earnings release. URI's adjusted earnings of $15.55 per share topped the Zacks Consensus Estimate of $13.83 by 12.4% and grew 32.9% year over year from $11.70 per share. Total revenues rose 15.7% year over year to $4.89 billion and surpassed the consensus estimate of $4.69 billion by 4.3%. United Rentals, Inc. price-consensus-eps-surprise-chart | United Rentals, Inc. Quote Rental revenues increased 17.8% year over year to a quarterly record of $4.32 billion. Average fleet size, measured at original equipment cost, rose 7.9%. Owned equipment rental revenues grew 12.9% to $3.32 billion. Revenues from re-renting equipment sourced from other vendors surged 76.7% to $129 million, while ancillary and other rental revenues climbed 33% to $871 million. Used equipment sales rose 4.5% to $348 million, with an adjusted gross margin of 46.3% compared with 45.9% a year earlier. New equipment sales fell 11.6% to $84 million. Contractor supplies sales and service and other revenues increased 9.3% to $47 million and 5.4% to $98 million, respectively. General Rentals segment rental revenues increased 8.8% year over year to $2.61 billion. Rental gross profit grew 13.8% to $1 billion, while gross margin expanded 170 basis points (bps) to 38.4%. Specialty rental revenues surged 34.7% to $1.7 billion. Rental gross profit increased 42.3% to $811 million, with gross margin expanding 250 bps to 47.6%. Both segments benefited from efficiencies in depreciation, labor and benefits, repairs and maintenance, and delivery. Faster growth in lower-margin ancillary and re-rent revenues partly offset these gains. Gross profit increased 22.9% to $2.05 billion, with gross margin improving to 41.8% from 39.4%. Selling, general and administrative expenses rose 15.6% to $511 million but declined to 10.4% of revenues from 10.5%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 19.8% to a quarterly record of $2.33 billion. Its margin expanded 160 bps to 47.6%, supported partly by a higher proportion of revenues from equipment rentals. Operating income grew 26.5% to $1.41 billion, with operating margin increasing to 28.8% from 26.3%. For the first nine months of 2026, operating cash flow rose 25.4% to $4.93 billion. Free cash flow increased 19.2% to $1.42 billion, including $27 million of restructuring-related payments. United Rentals ended September 2026 with liquidity of $2.62 billion, including $153 million in cash and equivalents. Net leverage, or net debt divided by trailing 12-month adjusted EBITDA, improved to 1.8x from 1.9x at the end of 2025. Total debt increased to $14.67 billion from $14.23 billion over that period. URI returned $1.496 billion to shareholders during the first nine months of 2026, comprising $1.125 billion in share repurchases and $371 million in dividends. It completed its prior $2 billion repurchase program and began its new $5 billion authorization. The company still expects $1.5 billion of share repurchases in 2026. It declared a quarterly dividend of $1.97 per share, payable Nov. 25, 2026, to shareholders of record Nov. 11, 2026. Management raised its revenue outlook to $18-$18.2 billion from $17.5-$17.8 billion. Adjusted EBITDA is now projected at $8.3-$8.4 billion compared with $7.98-$8.13 billion previously. Operating cash flow is expected at $6.25-$6.85 billion, up from $5.85-$6.65 billion. The free cash flow outlook, excluding restructuring-related payments, remains $2.15-$2.45 billion. Net rental capital expenditures are projected at $3.75-$4.05 billion after gross purchases of $5.2-$5.5 billion compared with $3.4-$3.8 billion after gross purchases of $4.85-$5.25 billion previously. Management cited customer confidence, backlogs and large-project momentum as support for the raised outlook. United Rentals currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat. Sterling Infrastructure, Inc. STRL has an Earnings ESP of +0.80% and a Zacks Rank of 2 at present. Sterling's earnings beat estimates in each of the last four quarters, the average surprise being 27.2%. The company's earnings for the third quarter of 2026 are expected to grow 74.4% year over year. AAON, Inc. AAON currently has an Earnings ESP of +2.66% and a Zacks Rank #3 (Hold). AAON's earnings beat estimates in three of the last four quarters and missed on the remaining occasion, the average surprise being 21.6%. The company's earnings for the third quarter of 2026 are expected to increase 54.1% year over year. Argan, Inc. AGX has an Earnings ESP of +4.79% and a Zacks Rank of 3. Argan's earnings beat estimates in each of the last four quarters, the average surprise being 44.2%. The company's earnings for the third quarter of fiscal 2027 are expected to increase 53.9% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Rentals, Inc. (URI) : Free Stock Analysis Report AAON, Inc. (AAON) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report Argan, Inc. (AGX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

PulteGroup Inc. PHM is scheduled to report its third-quarter 2026 results on Oct. 22, before the opening bell. In the last reported quarter, earnings per share (EPS) were $2.48, beating the Zacks Consensus Estimate of $2.38 by 4.2%. Earnings declined 18.2% from $3.03 in the prior-year quarter. Total revenues (Homebuilding & Financial Services) of $3.983 billion edged past the consensus mark of $3.980 billion by 0.1% but fell 9.6% year over year. PulteGroup's earnings topped the consensus mark in three of the trailing four quarters and missed on one occasion, with an average surprise of 2.7%. The Zacks Consensus Estimate for PHM's third-quarter EPS has decreased to $2.62 from $2.63 over the past 30 days. The estimated figure indicates an 11.5% decrease from the year-ago EPS of $2.96. The consensus mark for total revenues is pegged at $4.13 billion, implying a 6.2% year-over-year decline. PulteGroup, Inc. price-eps-surprise | PulteGroup, Inc. Quote Topline: PulteGroup's third-quarter 2026 revenues are likely to have been weighed down by persistent affordability challenges, mortgage-rate volatility and cautious homebuyer sentiment. Elevated home prices and borrowing costs have continued to constrain purchasing power, particularly among first-time buyers. Intense competition across the housing market likely compelled the company to offer pricing incentives and mortgage-rate buydowns to stimulate demand, putting pressure on average selling prices (ASPs). Furthermore, softer housing demand in Western markets, including California and the Pacific Northwest, likely constrained sales momentum, while uneven demand conditions across regions may have affected the mix of home closings. The company's ongoing transition toward a higher build-to-order mix and a disciplined approach to speculative inventory could also have limited near-term deliveries, as build-to-order homes generally require more time to complete. Although expanding community count and relatively resilient demand in Florida, the Midwest and select Southeast markets likely provided some support, these positives may not have fully offset the broader housing market challenges. Our model predicts home closings to decline 2.9% year over year to 7,308 units, while ASP is expected to decrease 2.4% to $550,426, weighing on third-quarter home sale revenues. Management guided for 7,000-7,400 home closings, with ASPs of $550,000-$560,000. Community count is expected to increase 3-5% year over year. Margins: Margins are likely to have remained under pressure amid elevated incentives, higher land costs and competitive pricing. Management expects third-quarter home sale gross margin of 24.5-25%. Our model projects home sale gross margin of 24.6%, down from 26.2% in the year-ago period. SG&A expenses, as a percentage of home sale revenues, are expected to be 8.9%, down 50 basis points year over year. Lower construction costs and disciplined inventory management are likely to have provided some relief. Orders & Backlogs: Our model expects net new orders to increase 7% year over year to 7,102 units. Total backlog is projected to rise 8.8% to 10,760 units, while backlog value is expected to increase 8% to $6.73 billion. Our proven model does not conclusively predict an earnings beat for PulteGroup this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. PHM's Earnings ESP: The company has an Earnings ESP of -0.51%. You can uncover the best stocks before they're reported with our Earnings ESP Filter. Zacks Rank of PHM: The stock currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank stocks here. Here are other companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to post an earnings beat. Argan, Inc. AGX has an Earnings ESP of +4.79% and a Zacks Rank of 3 at present. Argan's earnings beat estimates in all of the last four quarters, the average surprise being 44.2%. The company's earnings for the third quarter of 2026 are expected to grow 53.9% year over year. United Rentals URI currently has an Earnings ESP of +1.17% and a Zacks Rank of 2. United Rentals' earnings beat estimates in two of the last four quarters and missed on the other two occasions, the average surprise being 1%. The company's earnings for the third quarter are expected to increase 18.2% year over year. Quanta Services PWR has an Earnings ESP of +2.66% and a Zacks Rank of 3. Quanta Services' earnings beat estimates in all of the last four quarters, the average surprise being 17%. The company's earnings for the third quarter of 2026 are expected to grow 50.5% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PulteGroup, Inc. (PHM) : Free Stock Analysis Report Quanta Services, Inc. (PWR) : Free Stock Analysis Report United Rentals, Inc. (URI) : Free Stock Analysis Report Argan, Inc. (AGX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

United Rentals, Inc. URI is scheduled to report its third-quarter 2026 results on Oct. 21, after market close. In the last reported quarter, the company's adjusted earnings per share (EPS) and total revenues topped the Zacks Consensus Estimate by 9.3% and 4.1%, respectively. Year over year, the metrics also grew 21.9% and 11.8%, respectively. URI's earnings surpassed estimates in two of the trailing four quarters and missed on the other two occasions, with an average surprise of 1%. The Zacks Consensus Estimate for third-quarter EPS has moved upward to $13.75 from $13.64 over the past 30 days. However, the estimated figure indicates a 17.5% increase from the year-ago quarter's earnings of $11.70 per share. The consensus estimate for total revenues is pegged at $4.67 billion, indicating growth of 10.4% from the prior-year quarter's level. United Rentals, Inc. price-eps-surprise | United Rentals, Inc. Quote Revenues The top-line performance of United Rentals is expected to have improved year over year from favorable secular trends in non-residential construction, infrastructure modernization, power, manufacturing, mining and data center development. These are likely to have resulted in healthy equipment rental demand, thus boosting the contributions from the General Rentals business segment (which contributed 54.8% to second-quarter 2026 total revenues) and the Specialty business segment (which contributed 32.4% to second-quarter 2026 total revenues). Specialty rentals, which offer higher margins and remain central to United Rentals' expansion strategy, are expected to have supported revenue growth both organically and through cold starts that added capacity in new markets. Moreover, URI's extensive and diverse fleet allows it to manage its rental fleet through a life-cycle approach that focuses on satisfying customer demand and optimizing utilization levels. This business approach is expected to have enabled the company to serve large customers that require a wide range of equipment. Also, acquisitions and joint ventures are likely to have catalyzed the growth trends in the to-be-reported quarter. For the third quarter, the Zacks Consensus Estimate for revenues from General Rentals and Specialty business segments is pegged at $3.02 billion and $1.69 billion, reflecting year-over-year growth of 6.9% and 20.4%, respectively. The consensus mark for revenues from equipment rentals is $4.07 billion, up from $3.67 billion reported a year ago. Earnings & Margins United Rentals is expected to report year-over-year earnings growth in the third quarter, attributable to higher fleet productivity and disciplined rate management. These factors, along with continued cost control, are likely to have contributed to improved profitability and earnings performance. Although inflationary pressures and elevated delivery costs are likely to have partly offset these gains, the ongoing in-house initiatives by URI and elevated top-line leverage are expected to have more than overpowered the headwinds. The consensus estimate for equipment rentals gross profit under the General Rentals and Specialty business segments is pegged at $957 million and $640 million, indicating year-over-year growth from $881 million and $570 million, respectively. Our proven model conclusively predicts an earnings beat for United Rentals this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. URI's Earnings ESP: URI has an Earnings ESP of +1.79%. You can uncover the best stocks before they're reported with our Earnings ESP Filter. Zacks Rank of URI: The stock currently has a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here. Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat. Sterling Infrastructure, Inc. STRL has an Earnings ESP of +0.80% and a Zacks Rank of 2 at present. Sterling's earnings beat estimates in each of the last four quarters, the average surprise being 27.2%. The company's earnings for the third quarter of 2026 are expected to grow 74.4% year over year. AAON, Inc. AAON currently has an Earnings ESP of +2.66% and a Zacks Rank of 3. AAON's earnings beat estimates in three of the last four quarters and missed on the remaining occasion, the average surprise being 21.6%. The company's earnings for the third quarter of 2026 are expected to increase 54.1% year over year. Argan, Inc. AGX has an Earnings ESP of +4.79% and a Zacks Rank of 3. Argan's earnings beat estimates in each of the last four quarters, the average surprise being 44.2%. The company's earnings for the third quarter of fiscal 2027 are expected to increase 53.9% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Rentals, Inc. (URI) : Free Stock Analysis Report AAON, Inc. (AAON) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report Argan, Inc. (AGX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Argan (AGX) just reported a Q2 fiscal 2027 earnings beat, with both profit and sales coming in ahead of estimates and increasing compared with the same period a year earlier, drawing fresh attention from investors. Argan's share price has moved sharply this year, with a 1-day share price return of 1.12% and a 7-day gain of 5.36% after the Q2 beat and the ValCor Communications acquisition. However, the 90-day share price return is down 45.64%, while the 5-year total shareholder return of 857.81% shows very large compounding for longer term holders. Scan beyond Argan and see how other infrastructure and industrial contractors are setting up for their next move with our curated list of solid balance sheet and fundamentals (26 results). That mix of a sharp Q2 beat, a steep 90 day pullback and a share price sitting well below analyst targets creates real tension around Argan. Is the discount a chance, or is the market's caution grounded in the fundamentals? On the widely followed narrative, Argan's fair value is significantly above the recent $383.83 close. This puts the current sell off in a very different light for investors trying to make sense of the Q2 jump and the 90 day slide. The aging North American power infrastructure and rising electricity demand driven by widespread electrification and the proliferation of AI data centers are resulting in record project backlog and robust pipeline visibility for Argan. This is likely to drive sustained top-line revenue growth for several years. See why 128 investors see Argan as 33% undervalued. Result: Fair Value of $570.50 (UNDERVALUED) Still, the bullish Argan story could crack if heavy reliance on large gas projects collides with a faster energy transition or if crew capacity ceilings restrict new awards. Find out about the key risks to this Argan narrative. Analysts frame Argan as 33% undervalued on their fair value estimate of $570.50, yet the current P/E of 30x sits above the SWS fair ratio of 24.7x and only slightly below the US Construction average of 30.3x and peer average of 32.4x. Is that a margin of safety or a pricing risk if sentiment cools? For a closer look at what those P/E gaps might mean in practice, including where the ratio could gravitate over time, See what the numbers say about this price — find out in our valuation breakdown.. Mixed signals around Argan only matter if you act on them. Step into the numbers yourself, weigh the concerns against the potential upside, and ground your own view in the 3 key rewards and 2 important warning signs. Do not stop with Argan. Use this momentum to scan for other stocks that match your risk, income, and growth preferences before the next move happens. - Target resilient balance sheets by filtering for companies with strong finances through the list of solid balance sheet and fundamentals (26 results). - Hunt for potential mispricing by reviewing the 31 high quality undervalued stocks that meet your quality and valuation thresholds. - Stack your portfolio with income ideas by screening for payout opportunities using the 7 dividend fortresses. 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. Companies discussed in this article include AGX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

It has been about a month since the last earnings report for Argan (AGX). Shares have lost about 7.8% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Argan due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Argan, Inc. before we dive into how investors and analysts have reacted as of late. Argan delivered a sharp beat for the second quarter of fiscal 2027 (ended July 31, 2026), with earnings and revenues topping the Zacks Consensus Estimate and growing year over year. The quarterly results reflected higher activity across all three business segments, led by construction ramp-ups in Power and stronger field services and vessel fabrication in Industrial. Project backlog stood at $2.5 billion as of July 31, 2026. The company's quarterly earnings of $3.76 per share rose 50.4% year over year and topped the Zacks Consensus Estimate of $2.68 by 40.3%. Revenues increased 61.5% year over year to $384 million and surpassed the consensus mark of $298 million by 29%. Consolidated gross profit rose 67.7% to $74.2 million, while gross margin expanded to 19.3% from 18.6%. Selling, general and administrative expenses increased 22.5% to $17.4 million but declined to 4.5% of revenues from 6% in the year-ago period. Adjusted EBITDA climbed to $70 million from $38.49 million year over year, with margin improving to 18.2% from 16.2%. The Power segment generated $301.2 million in quarterly revenues, up 52.9% year over year and representing 78.4% of consolidated revenues. Growth reflected increased construction activity on the 1.4 GW Thermal Project, 700 MW Combined-Cycle Project, 1.2 GW Power Station and 860 MW Thermal Project. Power gross margin improved to 22.4% from 19.6% a year earlier. Management attributed the consolidated gross margin improvement primarily to changing project and contract mix and strong execution in the Power segment. Industrial revenues surged 111.2% to $76.2 million as field-services construction activity and vessel fabrication increased. The segment accounted for 19.8% of consolidated revenues, up from 15.2% in the prior-year quarter. Industrial gross margin, however, fell to 7.3% from 12.5%. Argan is constructing an additional fabrication facility in Farmville, NC, to support a contract for approximately 2,000 horizontal pressure vessels for thermal energy storage and chilled-water cooling systems. Completion is expected in the third quarter of fiscal 2027. Teledata revenues increased 39.5% to $6.6 million. Its gross margin declined to 16.6% from 24.7%, while the segment posted a pretax loss of $0.2 million for the quarter. On July 31, 2026, Argan acquired ValCor Communications for total consideration of approximately $9.4 million. Since the acquisition closed on the final day of the quarter, ValCor contributed no revenues or earnings to the reported period. The deal extends Teledata's reach into New England and adds defense and aerospace customers. Cash, cash equivalents and investments totaled $1.03 billion as of July 31, 2026, up from $895 million as of Jan. 31, 2026. Net liquidity increased to $440.4 million from $421 million, and AGX had no debt. Operating cash flow for the first six months of fiscal 2027 was $210.4 million. Argan used $14 million for dividends, $9.6 million for share repurchases and $8 million, net of cash acquired, for the ValCor transaction during the first half. The quarterly dividend was 50 cents per share, equivalent to an annual rate of $2.00 per share. The presentation characterized the backlog as fully committed by customers and actively being worked on. It showed 91% supporting the electric economy, comprising 80% natural gas and 11% renewable projects, while Industrial represented 8%. The backlog was $411 million below its Jan. 31 level. The company estimates that about 48% of remaining unsatisfied performance obligations will be recognized as revenues over the next 12 months, with substantially all the remainder expected within the following 12 to 24 months. Management cited data centers, electric vehicles and reshoring of manufacturing as demand drivers, while equipment constraints, interconnection delays, specialized labor availability and tariffs could affect project costs and timing. Since the earnings release, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 10.23% due to these changes. At this time, Argan has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Argan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Argan, Inc. (AGX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Argan has delivered very strong multi year share gains, yet the recent pullback now has investors asking whether the current price is still supported by the company’s earnings power. With a fresh set of headline grabbing results and capital return moves on the table, the question has become more urgent for anyone tracking Argan stock. Over the past 5 years the share price has risen about 9x, which puts a lot of weight on whether the underlying earnings can keep carrying that kind of market value. Record revenue and net income, backed by a sizeable gas fired power project backlog and a higher dividend, can influence how durable investors expect Argan’s profit stream to be. The analysts covering Argan have run their own numbers. See what analysts think Argan's shares could be worth. The stock’s next move may depend on whether today’s valuation is adequately explained by Argan’s current and expected earnings base. Argan’s record quarter and long run share gains raise a bigger question for your portfolio as well, so this could be a moment to broaden your watchlist with our screener containing 15 high quality undiscovered gems. The P/E ratio fits Argan because earnings sit at the centre of how investors are framing the recent backlog and dividend story. Right now the stock trades on about 30.7x earnings, which lines up almost exactly with the wider Construction industry average of about 30.7x and sits a bit below the peer group near 33.9x. Against the tailored fair multiple used for Argan, this current P/E screens as overvalued, which means the market is asking you to pay a premium to what that earnings based model would suggest. Because record Q2 revenue and profit have already reset expectations, the present 30.7x multiple implies that a lot of optimism around Argan is already in the price even after the recent pullback. That leaves the stock looking richer than the model implied level, so anyone considering it now needs to judge whether the order book, balance sheet strength and higher dividend justify paying more for each dollar of current earnings than that framework points to. Explore the numbers behind Argan's P/E valuation. Argan’s valuation puzzle only really comes into focus once you spell out the storylines that could push the stock meaningfully higher or lower from here. Simply Wall St Narratives on the Community page do that by mapping out what would need to happen to Argan’s future growth, margins and earnings for the current P/E to look cheap or stretched. Rather than relying on a single multiple or one model output, each narrative lays out the assumptions behind its fair value so you can track those against actual results as they arrive. One of the top community narratives on Argan: 38% undervalued Discover why this Narrative puts Argan at 38% undervalued. Before you stop at the P/E and project backlog, it helps to ask who is steering Argan, how their rewards line up with your interests, and what that reveals about future decisions. See who runs Argan and how they are paid. 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. Companies discussed in this article include AGX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, Sept. 2, 2026 at 5 p.m. ET Chief Executive Officer - David Watson Chief Financial Officer - Josh Baugher Investor Relations - Jennifer Belodeau Operator: Good evening, ladies and gentlemen, and welcome to the Argan Inc. Earnings Conference Call for the Second Quarter of Fiscal year 2027 ended July 31, 2026. This call is being recorded. [Operator Instructions] There is a slide presentation that accompanies today's remarks, which can be accessed via the webcast. At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau of IMS Investor Relations. Please go ahead, ma'am. Jennifer Belodeau: Thank you. Good evening, and welcome to our conference call to discuss Argan's results for the second quarter of fiscal 2027 ended July 31, 2026. On the call today, we have David Watson, Chief Executive Officer; and Josh Baugher, Chief Financial Officer. I'll take a moment to read the safe harbor statement. Statements made during this conference call and presented in the presentation that are not based on historical facts are forward-looking statements. Such statements include, but are not limited to, projections or statements of future goals and targets regarding the company's revenues and profits. These statements are subject to known and unknown factors and risks. The company's actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, and some of the factors and risks that could cause or contribute to such material differences have been described in this afternoon's press release and in Argan's filings with the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements. Earlier this afternoon, the company issued a press release announcing its second quarter fiscal 2027 financial results and filed its corresponding Form 10-Q report with the Securities and Exchange Commission. Okay. With that out of the way, I'll turn the call over to David Watson, CEO of Argan. Please go ahead, David. David Watson: Thanks, Jennifer, and thank you, everyone, for joining today. I'll start by reviewing some highlights of our operations and activities, and Josh Baugher, our CFO, will go over our financial results. Then we'll open up the call for questions. Our strong second quarter built on the momentum we created in the first quarter of fiscal 2027, demonstrating our operational strength across our business. Each of our operating segments recorded substantially improved revenue, contributing to our record consolidated revenue of $384 million for the quarter. Our Power and Industrial segments delivered significant revenue growth of 53% and 111%, respectively, for the quarter, with Teledata revenue growing 40%. Our second quarter highlights include consolidated gross margin of 19.3%, record net income of $53.3 million or $3.76 per diluted share, record adjusted EBITDA of $70 million and adjusted EBITDA margin of 18.2%. We also executed at the end of the quarter on M&A with the purchase of ValCor Communications, a Connecticut-based provider of installation and repair services for information, communication and data networks. We're excited about the addition of ValCor, which strengthens our Teledata segment, giving us a presence in New England and bringing a client base of Fortune 500 technology, defense and aerospace customers from the region. Our balance sheet remains strong with approximately $1 billion of cash and investments, net liquidity of $440 million and no debt at July 31, 2026 and we continued our practice of returning capital to our shareholders through our quarterly dividend of $0.50 per share, which is $2 per share on an annual basis. So a very strong quarter overall with a lot of progress made. Now on to the operational review. We have 3 reportable business segments: Power, Industrial and Teledata. Our Power segment is our largest, building all types of power facilities, including thermal and a variety of renewable, including solar, solar with battery energy storage systems, biofuel and biomass facilities. Power segment revenues grew 53% and contributed $301 million or 78% of total revenue in the second quarter of fiscal 2027 with pretax book income of $66 million. The Industrial segment provides field services supporting new plant construction and additions for industrial facilities and fabricates metal components like piping systems and pressure vessels in its fabrication facility. Revenue increased by 111% to $76 million in the second quarter or 20% of consolidated revenue with pretax book income of approximately $4 million. Backlog for the Industrial segment was $210 million at July 31, 2026, and construction on our second fabrication facility is progressing well. Finally, revenue in our Teledata segment grew 40% to $7 million in the second quarter of fiscal 2027 and contributed 2% of consolidated revenue. Teledata provides project management and construction services across power distribution and information, communications and data networks for commercial and industrial customers. The segment works with data centers as well as with federal government locations and military installations requiring high-level security clearance. As I just mentioned, we expect that our recent acquisition of ValCor will expand and extend our reach as a provider of Teledata services. Turning to our backlog. Our consolidated backlog of fully committed projects is $2.5 billion at July 31, 2026, a decrease from $2.9 billion at the start of fiscal 2027. As you all know, we take a conservative approach to reporting backlog and typically only include the value of the contract in backlog when we've received a notice to proceed. Because of that, our backlog amount will move around from quarter-to-quarter related to the completion of certain projects and start time of pending projects. Our pipeline remains exceptionally strong, reflecting the demand for the reliable 24/7 energy resources needed to power an economy that is increasingly reliant on electrification. Demand for our capabilities across all 3 operating segments is high, particularly in our Power segment, where our current backlog includes 4 gas-fired power plants in the United States totaling over 4.1 gigawatts. Our Industrial segment is also seeing strong demand, highlighted by a data center contract we were awarded in November 2025 for the fabrication of thermal expansion and energy storage tanks. As we discussed on last quarter's call, we are currently building an additional fabrication facility in North Carolina to support this project and to better position the company to address new opportunities. The new facility is on track for completion later this year. As we move forward, we remain confident in our expectation that we will add a handful of new projects over the next 7 to 15 months. With the timing of our projects and the teams we have in place as well as those that are in training, we believe we are well positioned to execute on 10 to 12 jobs simultaneously. There continues to be a great deal of media and industry coverage around the significant increase in power demand due to the electrification of our economy. This dynamic includes the onshoring of domestic manufacturing, the use of EVs and the building of data centers, all of which are driving urgency around the build cycle for additional energy infrastructure to support an already stressed power grid. Gas-fired plants are widely recognized as the ideal solution for delivering reliable, uninterrupted power, and there are a limited number of firms, including Argan, who have the capabilities to successfully execute these complex construction projects. Despite some recent regulatory back and forth around data center development that's been in the news, the demand environment for our services remains very strong, and that, combined with our proven track record, is allowing us to remain selective in pursuing the right projects in the right locations with the right partners. Our backlog is currently composed of approximately 80% natural gas projects, 11% renewable and 8% industrial. With the current demand of natural gas-fired facilities and our core competencies in building these types of projects, we expect complex combined cycle projects, which will represent the majority of our backlog for the near and midterm. Renewable energy still plays an important role as a power resource, and we subscribe to an all-of-the-above approach when it comes to power generation. We plan to maintain our renewable capabilities so that we remain competitively positioned to meet market demand and customer needs, but our core activities will center around natural gas builds. Slide 7 highlights a selection of our major projects currently underway or recently awarded. As you know, during the first quarter, we reached substantial completion ahead of schedule on the final project of our 3-part Midwest solar and battery projects, and now that project has reached final completion. In addition, we expect to reach substantial completion ahead of schedule for our 405-megawatt Midwest solar project later this month. Given the complexity of our projects, our ability to reach early completion milestones shows the high level proficiency of our teams in staying on task and on schedule, delivering excellent execution throughout a multiyear project. In Texas, our 1.2 gigawatt ultra-efficient combined cycle natural gas-fired plant for SLEC is moving forward as expected and construction is ramping at our 2 other gas-fired projects in Texas, the 1.4 gigawatt project with CPV and our 860-megawatt project. We're also making good progress on our 700-megawatt combined cycle natural gas-fired power plant in the U.S. Looking internationally, our 2 projects in Ireland, the Tarbert Next Generation Power Station, a 300-megawatt biofuel plant for SSE Thermal and our 170-megawatt thermal facility are progressing well. As I mentioned earlier, our Industrial segment has a $125 million data center project underway and is also working on a recycling and water treatment plant in Alabama. Our project portfolio is diverse in terms of scope, scale, complexity and location, but all of our teams approach each project with the highest commitment to excellent execution and our reputation as a reliable partner is a testament to that diligent approach. With that, I'll turn the call over to Josh Baugher to take us through the financials for the second quarter and first 6 months of 2027. Go ahead, Josh. Joshua Baugher: Thanks, David, and good evening, everyone. On Slide 8, we present our consolidated earnings for the second quarter and first 6 months of fiscal 2027 ended July 31, 2026. As David mentioned, we delivered record second quarter revenues of $384 million, an increase of 62% as compared to $237.7 million in the second quarter of fiscal 2026. The increase is primarily due to the activity ramp of certain projects in our Power segment. For the second quarter, Argan reported consolidated gross profit of approximately $74.2 million or a gross margin of 19.3%. Consolidated gross profit for the comparative quarter last fiscal year was $44.3 million, representing a gross margin of 18.6%. The increase in gross profit and improvement in gross margin for the recently ended quarter was primarily driven by our Power segment, reflecting a shift in project and contract mix and strong project execution. Gross margins for our Power, Industrial and Teledata segments were 22.4%, 7.3% and 16.6%, respectively, for the second quarter of fiscal 2027. Consolidated gross margin has stepped down over the past 3 quarters from 25% in the fourth quarter of fiscal 2026 to 21% in Q1 of fiscal 2027 and now 19.3% in the second quarter. As you know, our margins will vary from quarter-to-quarter depending on several factors, including project mix and where our projects sit in their construction cycle. When we complete projects early, we typically have the opportunity to realize some margin benefit. We saw that dynamic with the early completion of a couple of our projects in the fourth quarter of fiscal 2026 and Q1 of fiscal 2027, which favorably impacted consolidated margin. In the second quarter, our consolidated margin reflects earlier stage revenues for our current projects in the Power segment. As projects ramp and get into their second and third year of construction, we expect to see higher revenues and with successful execution, we have the opportunity to enhance margin. Selling, general and administration expense of $17.4 million for the second quarter of fiscal 2027 increased as compared to SG&A of $14.2 million for the comparable prior year period. However, as a percentage of revenue, SG&A decreased to 4.5% compared to 6% in the comparable quarter. Other income net for the 3 months ended July 31, 2026, was $10.1 million, which primarily reflected investment income earned during the period. Net income for the second quarter of fiscal 2027 was a record $53.3 million or $3.76 per diluted share compared to $35.3 million or $2.50 per diluted share for last year's comparable quarter. Adjusted EBITDA in the second quarter of fiscal 2027 was $70 million or an adjusted EBITDA margin of 18.2% compared to adjusted EBITDA of $38.5 million or an adjusted EBITDA margin of 16.2%. Looking at our year-to-date performance, revenue for the first 6 months of fiscal 2027 increased by 56.5% to $674.9 million as compared to revenues of $431.4 million for the prior year period. Our consolidated gross margin of 20.1% for the first half of fiscal 2027 increased as compared to gross margin of 18.8% for the first 6 months of fiscal 2026 primarily due to the same reasons described for the quarter. SG&A expenses increased to $33.1 million for the first 6 months of fiscal 2027 as compared to $26.7 million for the first 6 months of fiscal 2026, but decreased as a percentage of revenues to 4.9% as compared to 6.2% in the first half of last fiscal year. Net income for the 6 months of the fiscal year was $99.4 million or $7.01 per diluted share compared to $57.8 million or $4.09 per diluted share for the first 6 months of last fiscal year. Adjusted EBITDA was $126.5 million or an adjusted EBITDA margin of 18.7% for the first half of fiscal 2027 compared with adjusted EBITDA of $70 million or an adjusted EBITDA margin of 16.2% for the first half of fiscal 2026. With that, I'll turn the call back to David. David Watson: Thanks, Josh. Our balance sheet remains strong with approximately $1 billion in cash and investments, generating meaningful investment yields at July 31, 2026. Our net liquidity was $440 million and we had no debt. We believe that our balance sheet is a competitive advantage as it supports our growing operations organically and inorganically, expands bonding capacity and provides customers a reliable and bankable EPC partner. Stockholders' equity was over $0.5 billion at July 31, 2026. This liquidity bridge demonstrates that our business model ordinarily requires a low level of capital expenditures. Our net liquidity of $440 million at July 31, 2026, an increase of $19 million compared to net liquidity of $421 million at January 31, 2026, as we returned $51.7 million of capital to our shareholders during the first 6 months of fiscal 2027. Our capital allocation strategy is disciplined and focused on 4 core areas. First, we invest organically in the business. That means developing and retaining our people and adding headcount to make sure we are staffed to execute on our projects. It also means expanding our capabilities such as building a new fabrication facility in North Carolina to position ourselves for anticipated data center customer demand. Second, the company pays a quarterly dividend, which we increased 33% to $0.50 per common share in September 2025, bringing us to an annual dividend run rate of $2 per share. The increase represented our third consecutive year of raising our quarterly dividend, which cumulatively has increased by 100%, reflecting the strength of our business and our commitment to returning shareholder value. We have had a share buyback program in place since November of 2021. And during the first quarter of this fiscal year, our Board increased the total repurchase authorization to $200 million and extended the expiration date through January 31, 2030. Since the program's inception, we have returned a total of approximately $123.8 million to shareholders through the repurchase program. Finally, we seek M&A opportunities that could be additive or complementary to our current platform. Our acquisition of ValCor Communications is a great illustration of that strategy, giving us a presence in New England and expanding our client base to include the Fortune 500 technology, defense and aerospace companies in that region. We're excited about this addition and its anticipated contributions. We are energized by the demand we're seeing for our capabilities across all 3 business segments. With our skill set and excellent track record of execution, Argan is well positioned to capitalize on the opportunities presented by the urgent need for power infrastructure after a prolonged period of underinvestment and unprecedented increases in demand for power. While we are energy agnostic and believe renewable will always have a role in power generation, gas-fired plants are integral to the reliable delivery of the uninterrupted 24/7 energy needed to power our economy. The demand pipeline for complex combined cycle natural gas-fired plants is substantial and we are one of only a few companies with the construction capabilities and proven track record of exceptional execution in building these facilities. We are excited for what lies ahead and intently focused on leveraging our teams, our solid financial position and our excellent reputation in the marketplace to expand our leadership position as a premier builder of industrial and energy infrastructure. As always, I'd like to thank our entire team for their hard work and dedication to operational excellence. They are the core driver of our company's growth and success. I also thank our shareholders for their continued support and confidence in our company. With that, operator, let's open it up for questions. Operator: [Operator Instructions] The first question is from Rob Brown with Lake Street Capital Markets. Robert Brown: Congratulations on all the progress. First, I wanted to talk a little bit about the pipeline. It looks like your commentary was about maybe a more near-term kind of execution pipeline. But could you kind of characterize the activity there and the number of projects or a sense of the projects that you're looking at? David Watson: Absolutely, Rob, and thanks for the question. We have historically, as you know, been very conservative about predicting where our backlog can go, and we're going to stick with that approach. We did say we expect to add a handful of new projects over the next 7 to 15 months, and that reflects the current demand for natural gas-fired facilities, and we expect these complex buying cycle projects will represent the majority of our backlog for the near and midterm, but there will also be simple cycles as well. As you know, we constantly are evaluating projects that meet the right time, conditions and best fit for our organization, and we have a significant number of inbound requests for our services. So I can't give a precise guideline at this time on new jobs. The reality is our next job could come next quarter or a year from now. And as you know, backlog performance can vary quarter-to-quarter depending on the timing of new projects. We are pleased to keep the backlog over $2.5 billion despite not adding any major power projects in the quarter, given that we generated $675 million of revenue during the first 6 months. And I think it's important to note that we were able to offset some of that backlog burn with $260-plus million of additions through scope increases on existing jobs, adding new smaller jobs across our organization in intra-quarter revenues. Robert Brown: Okay. Great. And then on the new facility build-out, I think you talked about some data center kind of market opportunity that, that opens up to you. Could you give us a sense of what sort of the revenue capacity is of that new facility and maybe some of the markets you're going after with that? David Watson: Absolutely. Just to the construction on that facility is going really well, and we expect to have that complete in Q3, which to me is a pretty significant acceleration and quick time line for building a new fabrication facility. Right now, it's primarily geared towards supporting that $125 million data center project that we're fabricating thermal expansion tanks and energy storage tanks. And we expect a number of follow-on opportunities with that customer and frankly, expect that this facility will position the company for additional demand that we're seeing across our space. So right now, obviously, there isn't any revenue coming out of that facility as it's still in construction phase, but we do expect for it to have a meaningful uptick in revenues for our industrial group later this year and into the next year around $10-plus million a quarter. Operator: The next question comes from Chris Moore with CJS Securities. Christopher Moore: Congrats on another great quarter. So one of the things you've talked about previously with respect to expanding capacity capabilities is just the need for Gemma to keep hiring and training new people. So just trying to get a sense in terms of maybe where you are today from a Gemma employee count perspective versus perhaps a year ago? And where do you expect to be a year from now? David Watson: Chris, I appreciate the question. Gemma is every month breaking new records of the number of employees that they have. It is a constant process to add and train to the organization to train folks in the Gemma way, and we constantly are adding folks. I think one of your questions might relate to what's our capacity of the number of jobs that we can take on. I'm still going to guide that capacity to 10 to 12 jobs at any one time. Keep in mind, a 2-gigawatt job is not the same as, say, a 500-megawatt job. So there could be some variability there ultimately. But we continue to gear towards expanding that organization. Frankly, we're expanding all of our organizations in all of our business segments, and our headcount is at record levels and meaningfully above where they were a year ago. Christopher Moore: Got you. I appreciate that. Industrial gross margin was 7.3%. So maybe you could talk about that and certainly below kind of normal levels. Is there some cost from the expansion that's embedded in there? Or just what happened this quarter and kind of a more normalized level? David Watson: Yes. I mean revenue grew -- it's obviously a record quarter in revenue, north of $70 million. I mean it grew year-over-year 111%. But you're correct. The margin profile was below our expectations. And frankly, there were a couple of projects unrelated to our data center work where the estimates to complete became below where we initially estimated at project inception, which impacted our gross margins during the quarter. We expect to finish these projects over the next 6 months. So industrial margins may run below historical norms for a quarter or 2 as these projects wind down. We're working hard to improve the economics of these projects as we expect strong execution across our teams regardless of the project challenges they face. Beyond that, we see a lot of exciting opportunities in our Industrial segment, similar to what I said to Rob, especially in the data center market and frankly, in the power market for industrial as well as pairing that with our fabrication capabilities. And we'll remain focused on selecting the right projects and executing them profitably. So we're working through a couple. Christopher Moore: Got it. And maybe just the last one for me. I think you kind of referenced this and certainly, demand looks really strong. I mean the Texas Governor, Greg Abbott, recently talked about halting 1,800 data center projects if their grid requests for, I don't know, 5x all-time peak demand. I guess the question is, any impact that you're seeing in Texas and just overall and any impact at all from kind of some more on the political side? David Watson: Chris, there is still an urgency to get data centers and power plants built. And you're correct, there has been a lot of news lately with pauses and pushbacks on data centers. But there has really been no change in terms of developer behavior. It's still a matter of the developer being able to achieve all those milestones that we've talked about, right, such as getting power purchase agreements in place with an end user such as the hyperscaler, air permits, access to gas, water permits, turbines, financing, et cetera. And we continue to work with several developers often through service arrangements on early activities as we anticipate kicking off some new projects over the next 7 to 15 months. So there is news out there, but we're not seeing a change in behavior and expect to be -- obviously expect to add more to our backlog in the future here. Operator: The next question is from Michael Fairbanks with JPMorgan. Mark W. Strouse: This is Mark Strouse on for Michael. David, I believe you said earlier this year, just kind of thinking about revenue sequencing. Earlier this year, I believe you said that you were expecting kind of sequential increases throughout the year. Just given the strength that you saw in 2Q, do you still think that you're going to grow during the second half of the year compared to 2Q? David Watson: Mark, great question. Thanks for jumping on for Michael. It's our -- clearly, it's our expectation that we will be meaningfully higher than fiscal year '26. We were able to achieve greater revenues than anticipated in Q2 across all of our business segments and especially in power. As such, that some of this pull forward in Q2 may result in limited quarter over consecutive quarter growth in Q3, especially since we anticipate decreased industrial revenues compared to Q2 for the rest of the year. So as you know, and as I've mentioned before, our revenues do move around related to where we are in the various construction phases of our projects underway. So we will see an impact from the timing of new project starts, completion of projects and where we are in existing projects. So again, fiscal year '27 is expected to be significantly above fiscal year '26. The pace of revenue growth, it's tough to tell. But you are correct. We did pull forward -- we did have a really strong revenue quarter in Q2. Mark W. Strouse: Okay. And then just as a follow-up, I wanted to ask about your latest thoughts on pricing, specifically within the Gemma business. So the combined cycle gas turbine OEMs are still talking about pricing increasing. Curious what you can say, either specific to your own business or kind of what you're seeing across the industry, that would be helpful? David Watson: It still comes down to the type of contract. It comes down to the location. Certain labor locations are much more significant than others when it comes to cost and getting the labor. So we believe our approach is appropriate as we take into consideration the market. We take in consideration inflation, labor cost, other risk factors in the contract type. And we typically do fixed price contracts, as you know, Mark. So price -- I mean, our margin profile that we've recorded over the last 3 quarters is in power has been north of 22%, and we expect for our contracts in the future to have meaningful pricing based off of the current market. But I wouldn't say that there is an ability to command higher pricing just because the market is evolving. But I do think we're able to get the right prices. Operator: The next question comes from [ Alexa Bruno ] with Goldman Sachs. Unknown Analyst: We wanted to ask on the power margins. The strength we saw this quarter, how should we think about it? Was it driven by project execution milestones? Or is this more normalized baseline expectations? What are some of the moving pieces there? David Watson: Alexa, thanks for the question, and thanks for joining us on the call. Our margins will vary from quarter-to-quarter depending on several factors, including project mix, where we are in projects, where the projects sit in the construction cycle. So we just completed power margins in Q2 of 22.4%. In Q1, they were 23.6%. So again, healthy north of 22% in both of those quarters. And some of that relates to completing some projects early. And so that's been beneficial when you're not incurring additional costs due to the length of the project that can be beneficial. But our overall margin outside of power was a little bit less than we were expecting but we remain confident in our ability to continue executing on our projects and capitalizing on the opportunities in our pipeline to drive continued strong margins. Unknown Analyst: Okay. That's very helpful. And then just a follow-up on the ValCor acquisition. Can you talk about the opportunity set there? And then how should we think about the potential for any further bolt-on M&A? David Watson: Yes. We clearly have not done a lot of M&A over the last 10 years. So we were pleased to get ValCor to the finish line and to enhance our Teledata segment because we believe there will be synergies. And with organic growth and the synergies of ValCor and the progression on our strategic plan, it should result in significant increase in our revenue run rate for Teledata and frankly, which we expect to potentially double revenues from fiscal year '26 and drive EBITDA growth over the next couple of quarters and beyond. There's obviously -- with any M&A, there's a risk of integration and continued execution of the Teledata strategy. And then, of course, as in everything, ensuring execution excellence. But we are excited about that business segment and how it can diversify our revenues and enhance shareholder value. And this success with this, while it's -- albeit that it's a small acquisition, is a reminder to the investing public that Argan does do M&A, though we are very stringent and picky as to when we do that but it is definitely one of our core capital allocation pillars in addition to buybacks and dividends and more importantly, investing in organic growth. Operator: We have no further questions in queue. I would now like to turn the floor back over to David Watson for closing remarks. David Watson: Well, none of this was made possible without all the hard work that all of our teams in the field, all of our teams in the segments and the companies that are doing all this hard work. So I want to again thank each and every one of you for all of your efforts. And I also want to thank all those participating in today's call, and we look forward to speaking with you again when we report third quarter fiscal 2027 results. Have a great evening. Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Argan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Argan wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,459!* Now, it’s worth noting Stock Advisor’s total average return is 960% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Argan (AGX) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

ARLINGTON, Va., September 09, 2026--(BUSINESS WIRE)--Argan, Inc. (NYSE: AGX) ("Argan" or the "Company") today announces that its Board of Directors declared a 40% increase in the quarterly cash dividend, raising it from $0.50 to $0.70 per common share. The dividend will be payable on October 30, 2026, to stockholders of record at the close of business on October 22, 2026. David Watson, President and Chief Executive Officer of Argan, commented, "This is an exciting time for our Company as our industry experiences unprecedented demand for new dispatchable power generation to support the significant load growth driven by datacenters, domestic manufacturing, and the broader electrification of the economy. Argan has consistently achieved strong growth and profitability as we focus on applying a disciplined approach to project selection and excellent execution as we capitalize on the robust pipeline we are seeing. We are pleased to be in the position to raise our quarterly dividend 40% to $0.70 per common share, or $2.80 annually, representing our fourth consecutive annual increase, and reflecting our confidence in converting that demand into profitable, well-executed work. We are energized by the opportunities we are seeing in the marketplace and remain focused on increasing our leadership role as a proven partner in the construction of complex energy infrastructure and committed to delivering value to our shareholders." About Argan Argan’s primary business is providing a full range of construction and related services to the power industry. Argan’s service offerings focus on the engineering, procurement, and construction of natural gas-fired power plants and renewable energy facilities, along with related commissioning, maintenance, project development and technical consulting services, through its Gemma Power Systems and Atlantic Projects Company operations. Argan also owns The Roberts Company, which is a fully integrated industrial construction, fabrication and plant services company, and SMC Infrastructure Solutions, which provides teledata infrastructure services. Safe Harbor Statement Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Reference is hereby made to the cautionary statements made by the Company with respect to risk factors set forth in its most recent reports on Form 10-K, Forms 10-Q and other SEC filings. The Company’s future financial performance is subject to risks and uncertainties including, but not limited to, the successful addition of new contracts to project backlog, the receipt of corresponding notices to proceed with contract activities, and the Company’s ability to successfully complete the projects that it obtains. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to the risk factors highlighted above and described regularly in the Company’s SEC filings. View source version on businesswire.com: https://www.businesswire.com/news/home/20260909068231/en/ Contacts Investor Relations Contacts: John Nesbett/Jennifer BelodeauIMS Investor [email protected]

Argan, Inc. AGX reported strong second-quarter fiscal 2027 results on Sept. 2, with earnings and revenues surpassing the Zacks Consensus Estimate by 40.3% and 28.9%, respectively. The company also delivered strong year-over-year growth across key metrics, supported by higher activity across its Power, Industrial and Teledata segments. Shares of Argan have gained 6.1% since the earnings release, reflecting positive investor sentiment toward its strong execution and growth opportunities. Adjusted earnings per share stood at $3.76, up 50.4% from the prior-year quarter, while revenues of $384 million increased 61.5%. This growth was driven by a strong ramp-up in Power activity, along with higher revenues from Industrial and Teledata. The gross margin in the quarter was 19.3%, up from 18.6% a year ago, while adjusted EBITDA surged 82% to $70 million, with the margin expanding to 18.2% from 16.2%.Argan’s $2.5-billion backlog and strong demand for power infrastructure provide visibility into future activity, while the new North Carolina fabrication facility should support additional data center opportunities. The company also completed the acquisition of ValCor Communications during the quarter to expand its Teledata business. (read more: Argan Stock Rises on Q2 Earnings & Revenue Beat, Gross Margin Up Y/Y) Image Source: Zacks Investment Research So far this year, shares of this Virginia-based engineering and construction company have gained 39.4%, outperforming the Zacks Building Products - Miscellaneous industry, the broader Zacks Construction sector and the S&P 500 Index.Let us take a closer look at the factors shaping Argan stock’s prospects. Rising demand for reliable power infrastructure is creating a favorable market for Argan as utilities, manufacturers and data center developers seek additional generation capacity. The company said that its pipeline remains strong, with demand supported by electrification, domestic manufacturing, EV adoption and data center construction. Its current Power backlog includes four U.S. gas-fired power plants totaling more than 4.1 gigawatts, providing a solid base for future activity.The company also expects to add a handful of projects over the next 7-15 months, with complex combined-cycle natural gas projects likely to form the majority of its near- and mid-term backlog. Management said that it is receiving a significant number of inbound requests and remains selective in pursuing projects that fit its capabilities and execution capacity. Growing data center construction is creating opportunities for Argan beyond its core Power business. The Industrial segment has a $125-million data center project underway involving the fabrication of thermal expansion and energy storage tanks. The company is also building a second fabrication facility in North Carolina to support this project and pursue additional demand from the data center market.The new facility could provide a meaningful increase in Industrial revenues once it becomes operational. Management expects the facility to support additional opportunities with the existing customer and other customers, with revenues from the facility expected to reach more than $10 million per quarter later this year and into the next year. This expansion should increase Argan’s fabrication capacity while giving it greater exposure to data center-related infrastructure spending. Expanding Teledata through acquisitions gives Argan another avenue for growth while reducing its reliance on the Power segment. The company completed the acquisition of ValCor Communications during the quarter, adding installation and repair capabilities for information, communication and data networks. The deal also gives Argan a presence in New England and adds Fortune 500 technology, defense and aerospace customers to its client base.Management expects ValCor, together with organic growth and potential synergies, to significantly increase Teledata’s revenue run rate. The company believes that Teledata revenues could potentially double from fiscal 2026 reported levels, with EBITDA growth expected over the next several quarters and beyond. The acquisition also provides a platform for further diversification while Argan remains selective about future M&A opportunities. A strong cash position gives Argan flexibility to fund its growth initiatives while maintaining shareholder returns. Cash, cash equivalents and investments increased to $1.03 billion as of July 31, 2026, from $895 million at the end of fiscal 2026, reflecting continued cash generation during the period. The company also had $440 million of net liquidity and no debt at the end of the second quarter.This financial strength supports investments in people and capacity, including the new North Carolina fabrication facility, while also allowing Argan to return capital through dividends and share repurchases. The company returned $51.7 million to shareholders during the first six months of fiscal 2027, while maintaining its quarterly dividend and repurchase program. AGX’s earnings estimates for fiscal 2027 and 2028 have increased over the past seven days to $13.44 and $17.08 per share, respectively. The estimates for fiscal 2027 and 2028 imply year-over-year growth of 38% and 27.1%, respectively. Image Source: Zacks Investment Research The growing need for power infrastructure is creating opportunities across generation, grid and data-center projects. However, the competitive positioning of each company differs based on project exposure, scale and execution capabilities. Argan remains focused on complex natural-gas-fired power generation, while peers have broader exposure across electrical construction, transmission, data centers and other infrastructure markets.EMCOR Group, Inc. EME has a strong position in electrical and mechanical construction, with data-center activity supporting both areas. In the second quarter of 2026, EMCOR generated 24% revenue growth in Electrical Construction and 31% growth in Mechanical Construction. Data-center projects were a major contributor, with network and communications revenues rising 45% in Electrical Construction and more than doubling in Mechanical Construction. EMCOR also ended the second quarter of 2026 with record RPOs of $17.14 billion, up 44% year over year, providing visibility into future activity.Quanta Services, Inc. PWR has a broader infrastructure platform spanning utilities, generation and technology load centers. In the second quarter of 2026, Quanta Services reported a record backlog of $53 billion and continued to expand self-perform capabilities across electrical, mechanical, civil and fabrication work. Quanta Services self-performs 80% to 85% of work, supporting execution at scale. The company also expects larger programs across utility generation and technology load centers to build over the coming years.Primoris Services Corporation PRIM offers exposure across power delivery, natural-gas generation, pipeline infrastructure and electrical construction. In the second quarter of 2026, Primoris secured more than $3.9 billion in awards, with natural-gas generation accounting for $1.4 billion of the sequential increase in Energy backlog. Primoris also ended the second quarter of 2026 with a record backlog of $13.9 billion. However, renewable project cost overruns pressured second-quarter 2026 results, making project execution an important factor for the near-term outlook. The AGX stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 27.92, as the trend lines suggest below. Image Source: Zacks Investment Research Argan’s strong second-quarter results, robust Power demand and a $2.5-billion backlog support its favorable growth prospects. Rising demand for natural gas-fired power plants, data center-related infrastructure and industrial fabrication is creating opportunities across its business, while strong execution is helping sustain healthy Power segment margins. The ValCor acquisition also expands Teledata and provides another avenue for revenue growth and diversification.AGX trades at a premium valuation, but the strong earnings outlook and upward revisions provide some support for the higher multiple. With a Zacks Rank #2 (Buy) at present, Argan remains an attractive choice for investors seeking exposure to power infrastructure, data center-related projects and industrial construction opportunities. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Argan, Inc. (AGX) : Free Stock Analysis Report Quanta Services, Inc. (PWR) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Primoris Services Corporation (PRIM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In the past quarter, Argan, Inc. (NYSE: AGX) reported higher sales and net income for the second quarter and first half of fiscal 2027 compared with the prior-year periods, while also highlighting ongoing efforts to find acquisitions that complement its existing operations. Management pointed to the earlier acquisition of ValCor Communications as an example of its expansion approach, emphasizing the broader reach into New England and access to Fortune 500 technology, defense and aerospace clients across all three business segments. With stronger recent earnings and management emphasizing M&A to broaden its platform, we’ll now examine how this shapes Argan’s investment narrative. We've uncovered the 11 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. For Argan, the core investment story is about a specialist contractor that converts engineering and construction expertise into high returns on equity, supported by solid profitability and active capital returns. The latest quarter’s higher sales and earnings, combined with management’s focus on share buybacks and a regular dividend, keep near term catalysts centered on sustained project execution and disciplined capital allocation. The push to find more acquisitions, framed by the earlier ValCor Communications deal, raises the stakes: M&A could deepen Argan’s reach with Fortune 500 technology, defense and aerospace clients, but it also introduces integration and capital deployment risks at a time when the share price has been volatile and the valuation already looks full against fair value estimates. In that context, the recent M&A commentary is material, because it subtly shifts the story from pure organic execution toward platform building. However, there is a key risk in how much Argan chooses to pay for future deals that investors should be aware of. Argan's shares are on the way up, but could they be overextended? Uncover how much higher they are than fair value. Seven Simply Wall St Community members see Argan’s fair value anywhere between about US$264,700 and US$633, highlighting very different conviction levels. Set that against the current focus on M&A and capital returns, and you can see why it pays to weigh several views on how those choices might influence Argan’s future performance. Explore 7 other fair value estimates on Argan - why the stock might be worth as much as 51% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Argan research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Our free Argan research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Argan's overall financial health at a glance. Our daily scans reveal stocks with breakout potential. Don't miss this chance: Invest in the nuclear renaissance through our list of 91 elite nuclear energy infrastructure plays powering the global AI revolution. Outshine the giants: these 19 early-stage AI stocks could fund your retirement. AI is about to change healthcare. These 37 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. 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. Companies discussed in this article include AGX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

On September 2, Argan, Inc. (NYSE:AGX) reported strong results for its second quarter of fiscal year 2027. The company posted record revenue of $384 million, a gross margin of 19.3%, record net income of $53 million, and record adjusted EBITDA of $70 million. Following the strong results, Freedom Broker upgraded its rating on the stock from Hold to Buy with a price target of $700. Analyst Sergey Glinyanov noted that Argan, Inc.’s (NYSE:AGX) results showed strong execution across major Power projects. Over the last twelve months, the company has delivered strong revenue growth of 29%. Argan, Inc. (NYSE:AGX) also has an impressive project backlog to support future revenue. As of July 31, 2026, consolidated project backlog stood at approximately $2.5 billion. While this was down from roughly $2.9 billion as of January 31, 2026, the backlog still provides a significant base for future revenue. The company expects to add several projects over the next 7 to 15 months. Future performance could benefit from ramp-up of gas-fired projects and new contract awards. “We maintain our $700 target price for AGX and upgrade the rating from Hold to Buy, reflecting the emerging upside potential,” Glinyanov wrote. Despite the strong quarter, Argan, Inc. (NYSE:AGX) faces some near-term headwinds. Revenue growth may slow in the third quarter of fiscal 2027 as some revenue was pulled forward into the second quarter. The Industrial segment has been an area of concern. The segment's gross margin fell to 7.3%, below expectations, after cost overruns on a couple of projects unrelated to data center work. Estimates to complete these projects became less favorable than initially expected, putting pressure on profitability. Management expects these projects to be finished over the next six months. As a result, Industrial margins could remain below historical levels for a quarter or two. However, this temporary weakness is expected to have a limited impact on the company’s consolidated results. Hedge Fund Interest Hedge fund interest in Argan, Inc. (NYSE:AGX) weakened slightly in the second quarter of 2026. According to Insider Monkey's database, 39 hedge funds held positions in the stock in the second quarter of 2026, down from 42 funds in the first quarter. Argan's strong rally could mean that investors have already priced in much of the company’s recent success. Still, the stock remains well below its 52-week high of $805.75, while staying comfortably above its 52-week low of $197. The company’s record Q2 performance, project backlog, and expected project ramp-up support the bullish case. However, pulled-forward revenue, weaker Industrial margins and the stock’s already strong gains could create some risks for investors. While we acknowledge the potential of AGX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Rosenblatt Sees Booking (BKNG) as the Best-Positioned Online Travel Agency Despite Challenges and Baird Upgrades Deere (DE) to Outperform on Hopes of Recovery. Disclosure: None. Follow Insider Monkey on Google News.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record consolidated revenue of $384 million was driven by significant activity ramps in the Power segment and triple-digit growth in the Industrial segment. Management attributes the 53% Power segment revenue growth to the execution of 4.1 gigawatts of gas-fired projects, which now comprise 80% of the total backlog. The 111% revenue surge in the Industrial segment was fueled by a major $125 million data center contract for thermal expansion and energy storage tanks. Operational outperformance was highlighted by reaching early completion milestones on Midwest solar and battery projects, which management notes provides favorable margin benefits. The acquisition of ValCor Communications strategically expands the Teledata segment into New England, targeting Fortune 500 technology, defense, and aerospace clients. Management emphasizes that while they maintain an 'all-of-the-above' energy approach, natural gas remains the core competency due to its role in providing 24/7 reliable power for an electrifying economy. The company maintains a 'bankable' EPC partner status through a debt-free balance sheet with approximately $1 billion in cash and investments. Management expects to add a handful of new projects over the next 7 to 15 months, primarily focused on complex combined cycle natural gas facilities. The new fabrication facility in North Carolina is on track for completion in Q3, expected to contribute approximately $10-plus million in quarterly revenue starting late this year. Revenue growth in the second half of fiscal 2027 may see limited sequential increases compared to Q2 due to project pull-forwards and anticipated decreases in industrial revenues. The company is scaling its workforce to support a target capacity of executing 10 to 12 major projects simultaneously. Teledata revenues are projected to potentially double from fiscal year 2026 levels following the integration of ValCor and organic growth synergies. Industrial gross margins of 7.3% were below expectations due to downward revisions in estimates-to-complete for two specific projects, which may impact margins for another 1-2 quarters. Backlog decreased to $2.5 billion from $2.9 billion, reflecting a conservative reporting approach that only includes contracts with a formal notice to proceed. Management noted regulatory 'back and forth' regarding data center development in Texas but stated developer behavior remains unchanged with high demand for grid infrastructure. Consolidated gross margins stepped down to 19.3% from 21% in Q1, reflecting the transition of Power projects into earlier, lower-margin construction stages. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management reiterated a conservative outlook, noting that while the pipeline is strong, new major jobs could be awarded anywhere from next quarter to a year from now. Backlog burn was partially offset by $260-plus million in scope increases on existing jobs and smaller new contracts. Gemma is reaching record employee counts, though management maintains a capacity guide of 10 to 12 simultaneous jobs depending on project scale. The focus remains on training new hires in the 'Gemma way' to ensure execution excellence as the project load increases. Management has seen no change in developer behavior despite political headlines about grid capacity in Texas. Success remains dependent on developers achieving milestones like power purchase agreements, air permits, and financing rather than just regulatory sentiment. Argan continues to favor fixed-price contracts, factoring in localized labor costs and inflation rather than just commanding higher prices due to market demand. Power segment margins above 22% are viewed as healthy, though they fluctuate based on project lifecycle and early completion incentives.