Is Lindsay (LNN) a Buy Before Q4 2025 Earnings?

Lindsay Corporation (LNN), a leading provider of irrigation and infrastructure solutions, has long been a subject of debate among investors due to its cyclical earnings performance and valuation dynamics. With its Q4 2025 earnings reported on October 23, 2025, and the next quarterly results due on January 8, 2026, the question of whether LNN is a buy ahead of these disclosures hinges on two critical factors: earnings momentum and valuation consistency.

Earnings Momentum: A Mixed Picture

LNN's earnings trajectory over the past two years reveals a pattern of resilience and volatility. For the trailing twelve months (TTM) ending August 2025, the company reported an EPS of $6.82, reflecting a 12.9% year-over-year increase. However, this growth was not evenly distributed. Q4 2025, for instance, saw a disappointing EPS of $0.99, missing estimates by $0.05 and marking a 15.3% decline from the same quarter in 2024. This divergence underscores the challenges posed by sector-specific headwinds, particularly in the irrigation segment, which has faced soft demand in North America.

In contrast, earlier quarters in 2024-2025 demonstrated stronger momentum. Q3 2025, for example, exceeded expectations with an EPS of $1.78 (vs. $1.36 estimated) and revenue of $169.46 million (vs. $157.87 million estimated). Similarly, Q1 2025 delivered a 15% EPS increase and 3% revenue growth, driven by a large international irrigation project in the Middle East and North Africa (MENA) region. These results highlight LNN's ability to capitalize on high-margin international contracts, even as domestic demand fluctuates.

The infrastructure segment has also shown promise. In Q3 2024, infrastructure revenue rose 11% year-over-year to $24.4 million, with operating income surging 76% to $6.3 million. This segment's performance, coupled with cost management initiatives and tax credits (such as a $4.8 million Brazil tax credit in Q3 2024), has partially offset declines in the irrigation business.

Valuation Consistency: A Relative Bargain

LNN's valuation metrics suggest it is trading at a discount relative to both its historical averages and industry peers. As of early 2026, the stock's P/E ratio stands at 17.3x, slightly above its estimated fair value of 16.3x but significantly lower than the peer average of 21.9x and the industry average of 25.4x. This implies that, while the stock may be marginally overvalued on an absolute basis, it offers better value compared to competitors.

The Price-to-Book (P/B) ratio further reinforces this narrative. At 2.47 as of January 2026, LNN's P/B has remained relatively stable over the past five years, fluctuating between 2.40 and 3.80. This stability, despite broader market volatility, suggests a degree of resilience in the company's asset base and earnings quality.

Strategic Considerations and Risks

LNN's earnings momentum is closely tied to its ability to secure large international projects. The MENA region, in particular, has been a growth driver, with Q1 2025 revenue boosted by a 37% increase in international irrigation sales. However, reliance on such projects introduces execution risk, as delays or cost overruns could impact margins. Additionally, the irrigation segment's domestic performance remains a concern, with North American revenue declining in Q4 2025.

From a valuation perspective, the stock's current P/E and P/B ratios suggest it is not overpriced, but investors must weigh this against the company's earnings volatility. The recent Q4 miss raises questions about whether LNN can sustain its historical growth rates of 13.8%.

Conclusion: A Cautious Buy

LNN's valuation appears attractive relative to peers, and its infrastructure segment offers a promising counterbalance to irrigation headwinds. However, the recent Q4 earnings shortfall and uneven earnings momentum highlight the need for caution. Investors considering a position ahead of the January 8, 2026, earnings report should monitor two key factors:
1. Q1 2026 Earnings: A strong performance in the upcoming quarter could signal a rebound in momentum, particularly if international projects continue to drive growth.
2. Backlog Utilization: LNN's $246.9 million backlog as of May 2024 provides a near-term revenue tailwind, but execution risks remain.

For now, LNN appears to be a cautious buy, particularly for investors with a medium-term horizon who can tolerate earnings volatility in exchange for potential upside from its international expansion and infrastructure growth.