Key Highlights
- AGX shares climbed approximately 10% during pre-market hours following Q4 EPS of $3.47, significantly surpassing the consensus forecast of $2.13 by $1.34
- Fourth-quarter revenue reached $262.1M, representing a 12.7% increase year-over-year, though marginally under the $271M projection
- Fiscal year 2026 EPS reached $9.74 compared to $6.15 in FY25; gross margin improved to 25% from 20.5%
- Contract backlog climbed to $2.9B from $1.4B one year prior following $2.5B in newly secured contracts
- Argan closed the fiscal year with $895M in cash holdings and a debt-free balance sheet; FY27 revenue outlook of $415M–$440M surpassed the $385.68M consensus
Argan delivered fourth-quarter adjusted earnings per share of $3.47, substantially exceeding Wall Street’s $2.13 projection. The $1.34 per share outperformance represents the type of surprise that commands investor attention.
Fourth-quarter revenue totaled $262.1 million, marking a 12.7% increase from the $232.5 million recorded during the comparable period last year. While the figure came up short of the $271 million forecast, market participants clearly zeroed in on the bottom-line performance.
Gross profit margin improved to 25% during the fourth quarter, up from 20.5% in the year-ago period. Net income climbed to $49.2 million, compared with $31.4 million in the corresponding quarter of the previous year.
CEO David Watson characterized the period as a “record fourth quarter” that concluded what he termed a year of robust operational performance. Full-year results supported that characterization.
For the full fiscal year 2026, Argan posted revenue of $944.6 million, up 8.1% from the prior year. Annual EPS totaled $9.74, climbing from $6.15 in FY25. EBITDA increased to $162.8 million from $113.5 million in the previous fiscal year.
Perhaps the most impressive metric is the contract backlog. It surged to approximately $2.9 billion as of January 31, 2026, up from $1.4 billion twelve months earlier. This expansion followed the company’s addition of $2.5 billion in new contract value throughout FY26.
Watson attributed the new contract awards to robust demand stemming from AI data center development, electrification initiatives, and the need to replace aging power generation infrastructure.
Financial Position and Shareholder Returns
Argan concluded the year with a robust financial foundation. The company maintained $895 million in cash, cash equivalents, and investments, up from $525.1 million in the prior year. Net liquidity reached $421 million.
The balance sheet carries zero debt.
The company also increased its quarterly dividend to $0.50 per share during FY26, marking the third straight year of dividend growth.
A significant factor boosting Q4 profitability was the early achievement of substantial completion at the Trumbull Energy Center — a project milestone that contributed to the quarter’s expanded gross margins.
Fiscal 2027 Projections
For the year ahead, Argan provided FY27 revenue guidance spanning $415 million to $440 million. This projection range exceeds the analyst consensus estimate of $385.68 million.
Adjusted EBITDA for FY27 is projected to fall between $0 and $10 million. CFO Baugher indicated it remains premature to provide specific guidance on FY27 gross margin expectations.
Management anticipates securing additional project awards within the next 12 to 20 months.
AGX was changing hands near $450 during pre-market trading on March 27, representing an approximate 10% gain for the session. The stock had already demonstrated upward momentum, gaining around 12.6% during the previous month and approximately 3.15% over the preceding week.
