Argan Inc. to Engage Investors in San Francisco Meeting

Argan Inc (AGX) reported a 23% increase in consolidated revenue to $193.7 million for Q1 of fiscal 2026, with a gross margin of 19% and a record backlog of $1.9 billion as of April 30, 2025. The company also announced a quarterly dividend of $0.375 per share and a share repurchase program increased to $150 million. Analysts forecast an average target price of $228.00, implying a 12.16% upside from the current price.

Argan Inc. (AGX), a leading engineering firm specializing in critical power infrastructure, has reported robust financial performance for the first quarter of fiscal 2026. The company announced a 23% increase in consolidated revenue to $193.7 million, driven by a 45% surge in Power Industry Services, which accounted for 83% of total revenue [1]. This growth was accompanied by an expansion in gross margin to 19%, up from 11.4% in the prior year, reflecting operational efficiency and higher-margin projects.

Argan's financial resilience was further underscored by its record backlog of $1.9 billion as of April 30, 2025, which is expected to cross $2 billion by year-end. The company's backlog includes significant projects such as the 1.2 GW Sandow Lakes Power Station and a 700-megawatt gas plant, both critical for powering data hubs and industrial AI applications [1]. This backlog diversification, with 67% in gas and 28% in renewables, positions Argan to benefit from both the reliability of gas and the growth of renewable energy [1].

In addition to its strong financials, Argan has demonstrated confidence in its long-term prospects by increasing its quarterly dividend to $0.375 per share and expanding its share repurchase program to $150 million. The company's balance sheet remains strong, with $546.5 million in cash and investments, $315 million in net liquidity, and no debt [1].

Analysts forecast an average target price of $228.00, implying a 12.16% upside from the current price. This valuation reflects the company's strategic alignment with the growing demand for AI-driven energy infrastructure and its strong financial fundamentals [2].

However, investors should be aware of potential risks such as supply chain delays extending project timelines and regulatory shifts that could impact profitability. The decline in Industrial Construction Services revenue by 34% YoY to $29 million also raises questions about sector diversification [1].

Argan Inc. (AGX) is well-positioned to capitalize on the AI-energy nexus, making it a compelling leveraged bet on the energy transition. The company's robust project pipeline and strategic focus on high-margin power projects provide a cushion against potential risks. Investors seeking exposure to the AI-energy nexus should consider AGX as a "build-to-demand" stock.

References:
[1] https://www.ainvest.com/news/argan-agx-powering-ai-revolution-energy-infrastructure-dominance-2507/
[2] https://seekingalpha.com/article/4800843-argan-strong-backlog-secular-growth-tailwinds-and-fair-valuations?source=affiliate_program:stockanalysis.com&utm_medium=affiliate&utm_source=stockanalysis.com&affid=858&oid=16&transaction=c95c1af7a6e84821abc4b8ca37f5270c