Argan Inc (AGX) stock analysis

P/E above its 5-year median

Argan's P/E of 25.5 is above its own 5-year median of 25.4.

P/E above the industry

Argan's P/E of 25.5 is above the Construction Special Trade Contractors median of 25.1.

EV/EBITDA above its 5-year median

Argan's EV/EBITDA of 21.8 is above its 5-year median of 15.2.

P/B above the industry

Argan's price-to-book of 8.91 is above the Construction Special Trade Contractors median of 1.66.

Trading above fair value

The share price of $322.00 is above our fair value estimate of $258.51.

Margin of safety under 20%

The price is 24.6% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 27.6% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 61.1% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 53.0% over the last twelve months, against a 5-year average of 42.0% a year.

Growing faster than the industry

Revenue grew 29.0% over the last twelve months; the Construction Special Trade Contractors median is 8.0%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 20.9% over the last twelve months, against 18.8% a year earlier.

Return on equity over 15%

Return on equity was 39.8% over the last twelve months and averaged 18.9% over five years.

Return on capital over 10%

Return on invested capital was 396%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Argan's return on equity of 39.8% is above the Construction Special Trade Contractors median of -16.7%.

Earnings grew over 5 years

Net income grew 42.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 15.1% over the last twelve months, against a 5-year average of 9.0%.

Net margin above the industry

Argan's net margin of 15.1% is above the Construction Special Trade Contractors median of -7.9%.

No debt

Argan has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 1.50 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.18; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Argan paid dividends worth 0.5% of the share price over the last twelve months.

Yield below Treasuries

The 0.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Argan yields 0.5%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 15.6% of net income.

Covered by free cash flow

Dividends take 5.1% of free cash flow.