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Argan Stock Rises on Q2 Earnings & Revenue Beat, Gross Margin Up Y/Y
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Key Takeaways
Argan's fiscal second-quarter revenues jumped 61.5% to $384M, while EPS rose 50.4% to $3.76.
AGX's Power revenues grew 52.9% as gross margin expanded to 22.4% on strong execution.
Argan ended July with $1.03B in cash and investments, no debt and $440.4M in net liquidity.
Argan, Inc. (AGX - Free Report) 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.
AGX stock gained 9.9% during yesterday’s after-hours trading session, post the announcement of the financial results.
AGX’s Q2 Highlights
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 28.9%.
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%.
AGX's Power Segment Leads Revenue Growth
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.
Argan's Industrial Sales More Than Double
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.
AGX Expands Teledata With ValCor Acquisition
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.
AGX's Balance Sheet Supports Capital Deployment
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.
Argan's Backlog Frames the Growth Outlook
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.
AGX Stock’s Zacks Rank & Key Picks
Argan currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector to consider.
Comfort Systems delivered a trailing four-quarter earnings surprise of 34.6%, on average. The Zacks Consensus Estimate for Comfort Systems’ 2026 sales and EPS indicates growth of 38.3% and 60.7%, respectively, from a year ago.
Quanta Services, Inc. (PWR - Free Report) presently sports a Zacks Rank of 1. Quanta has a trailing four-quarter earnings surprise of 17%, on average.
The consensus estimate for Quanta’s 2026 sales and EPS indicates growth of 38.4% and 52.3%, respectively, from the prior-year levels.
Tutor Perini Corporation (TPC - Free Report) currently sports a Zacks Rank of 1. Tutor Perini delivered a trailing four-quarter earnings surprise of 17.8%, on average.
The Zacks Consensus Estimate for Tutor Perini’s 2026 sales and EPS implies an increase of 14% and 27.7%, respectively, from a year ago.
View the Zacks #1 Rank List
Image: Bigstock
Argan Stock Rises on Q2 Earnings & Revenue Beat, Gross Margin Up Y/Y
Key Takeaways
Argan, Inc. (AGX - Free Report) 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.
AGX stock gained 9.9% during yesterday’s after-hours trading session, post the announcement of the financial results.
AGX’s Q2 Highlights
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 28.9%.
Argan, Inc. Price, Consensus and EPS Surprise
Argan, Inc. price-consensus-eps-surprise-chart | Argan, Inc. Quote
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%.
AGX's Power Segment Leads Revenue Growth
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.
Argan's Industrial Sales More Than Double
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.
AGX Expands Teledata With ValCor Acquisition
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.
AGX's Balance Sheet Supports Capital Deployment
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.
Argan's Backlog Frames the Growth Outlook
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.
AGX Stock’s Zacks Rank & Key Picks
Argan currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector to consider.
Comfort Systems USA, Inc. (FIX - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comfort Systems delivered a trailing four-quarter earnings surprise of 34.6%, on average. The Zacks Consensus Estimate for Comfort Systems’ 2026 sales and EPS indicates growth of 38.3% and 60.7%, respectively, from a year ago.
Quanta Services, Inc. (PWR - Free Report) presently sports a Zacks Rank of 1. Quanta has a trailing four-quarter earnings surprise of 17%, on average.
The consensus estimate for Quanta’s 2026 sales and EPS indicates growth of 38.4% and 52.3%, respectively, from the prior-year levels.
Tutor Perini Corporation (TPC - Free Report) currently sports a Zacks Rank of 1. Tutor Perini delivered a trailing four-quarter earnings surprise of 17.8%, on average.
The Zacks Consensus Estimate for Tutor Perini’s 2026 sales and EPS implies an increase of 14% and 27.7%, respectively, from a year ago.