Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.6 |
| P/S | 8.0 |
| EV/EBITDA | 2.0 |
| Fwd P/E | 7.0 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 18.0x
- ▸PEG: 0.36
- ▸Attractively valued
AGX · Why this verdict
Why Argan (AGX) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.9/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Argan has beaten estimates in all 4 recent quarters with 62% growth, 40% ROE and a wide moat, and analysts see 44.2% upside, but 80.1% reliance on the Power segment and a 57% drawdown keep it speculative.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue and earnings are growing 62% YoY with an excellent 40% ROE and 15% margins. Growth breakdown | Growth stays above 30% YoY with ROE above 30%. | →Stable |
| CounterEngineering and construction growth follows a backlog of projects and cannot continue indefinitely. | ||
Argan beat estimates in 4 of 4 recent quarters with a 39.8% average surprise, including a 41.2% beat on 2026-09-02. Avg surprise pct | The 2026-12-03 report extends the beat streak. | →Stable |
| CounterBeats of this size raise expectations, and a project-based contractor can post lumpy results that reverse. | ||
The Power segment accounts for 80.1% of the business, tying results to a single end market. Bear case | Power segment share does not rise above current levels and project wins continue. | →Stable |
| CounterA slowdown in power-plant construction, or cancellation of one large project, would hit most of the revenue. | ||
Excellent cash conversion of 261% FCF-to-net-income, a wide economic moat and a 8/9 Piotroski score support quality. Quality breakdown | FCF-to-net-income stays above 100%. | →Stable |
| CounterCash conversion in contracting is boosted by customer advance payments that reverse as projects complete. | ||
The $496.33 analyst target implies 44.2% upside against 10.8% downside from $344.11, though the stock is down 57% from its high with forward P/E of 21.4x. Estimated upside | Price recovers toward the analyst target. | Tripped→Stable |
| CounterA 57% drawdown with price below the 200-day average and a 21.4x forward multiple shows the market doubts sustainability. | ||
Revenue and earnings are growing 62% YoY with an excellent 40% ROE and 15% margins.
→StableGrowth breakdown
- Expectation
- Growth stays above 30% YoY with ROE above 30%.
CounterEngineering and construction growth follows a backlog of projects and cannot continue indefinitely.
Argan beat estimates in 4 of 4 recent quarters with a 39.8% average surprise, including a 41.2% beat on 2026-09-02.
→StableAvg surprise pct
- Expectation
- The 2026-12-03 report extends the beat streak.
CounterBeats of this size raise expectations, and a project-based contractor can post lumpy results that reverse.
The Power segment accounts for 80.1% of the business, tying results to a single end market.
→StableBear case
- Expectation
- Power segment share does not rise above current levels and project wins continue.
CounterA slowdown in power-plant construction, or cancellation of one large project, would hit most of the revenue.
Excellent cash conversion of 261% FCF-to-net-income, a wide economic moat and a 8/9 Piotroski score support quality.
→StableQuality breakdown
- Expectation
- FCF-to-net-income stays above 100%.
CounterCash conversion in contracting is boosted by customer advance payments that reverse as projects complete.
The $496.33 analyst target implies 44.2% upside against 10.8% downside from $344.11, though the stock is down 57% from its high with forward P/E of 21.4x.
Tripped→StableEstimated upside
- Expectation
- Price recovers toward the analyst target.
CounterA 57% drawdown with price below the 200-day average and a 21.4x forward multiple shows the market doubts sustainability.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.7 |
| Gross margin | 0.1 |
| Op margin | 5.9 |
| Net margin | 7.5 |
| Current ratio | 5.5 |
| FCF quality | 10.0 |
| Moat | 7.5 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 40%
- ▸Strong margins: 15%
- ▸Excellent cash conversion: 261% FCF/NI
- ▸Wide economic moat
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 62% YoY
Momentum
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 1.7 |
- ▸Capitulation risk (RSI 28, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+0.9%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 116%
Insider
6.6/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.9 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
7.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 8.6 |
| growth rank | 8.8 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.3 |
| 52w position | 0.0 |
| gap | 7.0 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.1 |
| days to cover | 8.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 9.2 |
| debt equity | 9.9 |
- ▸High IV: 92%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 7.5 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 1.0% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- ASYMMETRY:5.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:1.6<4.5
Warning (0)
none
Reward-to-Risk
5.89
Upside
+88.3%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 28d with 4/4 beat streak
SuitabilitySpeculative — Drawdown -67% (>40% off 52w high)
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:5.9>=1.5. Top dim: Growth at 10.0; weakest: Momentum at 1.6. No conviction either direction.
The strongest dimensions are Growth at 10.0, Peer rank at 7.6, and Catalyst at 7.5; the weakest are Momentum at 1.6, Risk (lower is worse) at 6.2, and Technical at 6.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 5.89 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2High Return Strong Growth
Trip ifRevenue growth falls below 20% YoY for 2 consecutive quarters.
- P3Power Segment Concentration
Trip ifPower segment share exceeds 90% from the current 80.1%.
- P4Cash Conversion And Moat
Trip ifFCF-to-net-income falls below 50% from the current 261%.
- P5Large Upside After DrawdownTripped
Trip ifPrice falls below the $320.02 stop-loss level.