A Look at Argan (AGX) Valuation Following Major Texas Energy Center Contract Win

Argan (AGX) is making headlines after its subsidiary, Gemma Power Systems, received approval to begin work on an engineering, procurement and construction contract for the CPV Basin Ranch Energy Center in Texas.

See our latest analysis for Argan.

Argan’s announcement comes on the heels of a remarkable run. The stock has a year-to-date share price return of 117.4%, and its 1-year total shareholder return sits at an impressive 102.4%. Momentum has been building, with a 10.6% share price return over the last month alone, as the latest project win cements Argan’s position in the rapidly evolving energy infrastructure space.

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With shares surging over 100% this year and a healthy pipeline of major projects, investors are left to wonder: is Argan trading at a bargain, or has the market already factored in its future growth prospects?

Most Popular Narrative: 9.4% Overvalued

Argan's last close of $311.58 sits above the narrative's fair value of $284.68. This reflects elevated market optimism and expectations that may be tough to maintain. The following narrative, according to Kerry, highlights what could spark continued debate on whether this premium is sustainable.

Argan’s project backlog is a major growth catalyst, exceeding $1 billion as of the latest reports. This backlog includes a significant mix of renewable energy projects and provides strong revenue visibility for future quarters. Recent contract wins, particularly in infrastructure and power generation, have bolstered investor confidence and set the stage for sustained top-line growth.

Read the complete narrative.

Curious about what underpins this bold valuation? The secret sauce is a blend of recurring project wins, ambitious growth forecasts, and future profit margins that rival industry giants. Discover the full set of assumptions and see if the numbers stack up against the price chart.

Result: Fair Value of $284.68 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as ongoing material price inflation and labor shortages could quickly challenge Argan's current growth story and may shift investor sentiment just as rapidly.

Find out about the key risks to this Argan narrative.

Build Your Own Argan Narrative

If you see the story differently, or want to dig into the numbers yourself, you can shape your own outlook in just minutes and Do it your way.

A great starting point for your Argan research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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