Argan's analyst price target has risen significantly, with projections now at $315 from the prior $220. Analysts cite surging demand for AI-driven power infrastructure and robust project backlogs as key factors supporting a more optimistic outlook.

Analyst Commentary

Recent research coverage has highlighted both optimism and caution regarding Argan's valuation and growth prospects amid rising demand for power infrastructure linked to artificial intelligence trends.

Bullish Takeaways

• Bullish analysts have cited Argan's position as an underappreciated beneficiary of the rapidly accelerating AI-driven power demand cycle. This supports the case for multiple valuation upgrades.
• The company's record project backlog, especially in large-scale U.S. gas initiatives, indicates strong visibility into future revenues and helps support multi-year growth forecasts.
• Favorable and unprecedented pricing tailwinds in the gas turbine market are expected to drive continued margin expansion.
• Recent quarterly results showing better-than-expected margins bolster confidence that execution strength will persist. This may merit a premium multiple as industry investment cycles accelerate.

Bearish Takeaways

• Bearish analysts remain cautious about the durability of current pricing tailwinds and warn that any cooling of demand for large-scale gas projects could impact backlog visibility.
• There is scrutiny around Argan's ability to consistently convert its robust project backlog into realized revenue and margin expansion in the face of potential macroeconomic or regulatory setbacks.
• Uncertainty remains regarding the long-term sustainability of margin improvements if project environments or input costs change unfavorably.

What's in the News

• Argan's Board of Directors approved a 33% increase in the quarterly cash dividend. The dividend will rise from $0.375 to $0.50 per common share and will be payable on October 31, 2025, to shareholders of record as of October 23, 2025 (Key Developments).
• Between May 1, 2025, and July 31, 2025, Argan completed the repurchase of 1,000 shares for $0.23 million. This finalizes a multi-year buyback program totaling 2,760,294 shares, or 18.83% of outstanding stock, for $110.21 million (Key Developments).

Valuation Changes

• The Fair Value estimate remains unchanged at $262.00.
• The Discount Rate has increased slightly, moving from 8.10% to 8.15%.
• The Revenue Growth projection remains virtually unchanged at 17.88%.
• The Net Profit Margin forecast is steady at approximately 11.13%.
• The future P/E ratio has risen marginally from 27.59x to 27.63x.