Argan Q2 revenue misses analyst expectations

Overview

• Argan, which provides services in power industry, posts 4.7% rise in Q2 revenue, but misses analyst expectations

• Adjusted EPS for fiscal Q2 was $2.50

• Company reports record project backlog of $2.0 bln

Outlook

• Argan sees strong demand for capabilities across all business segments

• Company positioned to benefit from demand for reliable energy resources

• Argan expects to capitalize on electrification and power grid needs

Result Drivers

• PROJECT ACTIVITY - Increased project activity and higher contract backlog drove revenue growth, despite missing analyst expectations

• GROSS MARGIN IMPROVEMENT - Improved gross profit margins in Power Industry Services segment contributed to higher gross profit

• PROJECT MILESTONES - Completion of LNG project and progress in renewable projects supported results, aided by favorable weather conditions

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the construction & engineering peer group is "buy"

• Wall Street's median 12-month price target for Argan Inc is $228.00, about 0.4% above its September 3 closing price of $227.03

• The stock recently traded at 30 times the next 12-month earnings vs. a P/E of 34 three months ago

Press Release: ID:nBw12RYJVa