Argan, Inc. (AGX) Stock Plunges After Record-Backlog Q3: What Today’s Selloff Means for Investors

Published: December 5, 2025 – All data as of U.S. morning trading on this date and subject to change.

Key takeaways

Argan, Inc. (NYSE: AGX) shares are down about 15% today around $302 after closing at $356.39 on Thursday, wiping out a good chunk of this week’s gains. ^[1]
The selloff follows Q3 fiscal 2026 results: EPS beat, revenue missed, but backlog surged to a record ~$3.0 billion and margins improved. ^[2]
Analysts are cooling on the name: Lake Street downgraded AGX to Hold today but raised its price target to $325, while overall Street consensus sits around $321–$342 with targets ranging from $150 to $447. ^[3]
Institutional investors are still piling in (Arrowstreet, Prudential, Navellier), even as insiders have sold over $29 million of stock in the last 90 days. ^[4]
The company has no debt, nearly $727 million in cash and investments, a growing dividend ($2.00 per year), and EPS up sharply year-on-year, but trades on rich forward multiples in the low 40s on P/E. ^[5]

Argan stock today: from momentum favorite to double‑digit drop

Coming into this week, Argan, Inc. was one of the hotter stories in construction and power infrastructure. Over the last 12 months, AGX is still up more than 100%, and earlier this week Zacks highlighted that shares were up nearly 18% in just one week before the latest earnings. ^[6]

Today is a different mood. After Thursday’s Q3 fiscal 2026 earnings release, AGX is trading around $302, down roughly 15% intraday from Thursday’s $356.39 close. MarketBeat quotes a live price of $302.37 (-15.16%) late Friday morning, while ChartMill and MarketWatch show the previous close at $356.39 and after‑hours levels in the low $315–$318 range. ^[7]

Benzinga’s pre‑market wrap noted AGX was down about 11.6% to $315 before the open, attributing the weakness to “worse‑than‑expected third‑quarter sales results,” even though earnings per share came in ahead of expectations. ^[8]

In short:

The stock ran hard into the print, boosted by bullish research and momentum screens. ^[9]
The results were fundamentally solid but not perfect.
A high‑expectations, high‑valuation stock just met the buzz saw known as “the market.”

Inside Q3 fiscal 2026: earnings beat, revenue miss, record backlog

Argan’s Q3 fiscal 2026 (quarter ended October 31, 2025) was formally reported after the close on December 4, 2025. ^[10]

Headline numbers

According to the company’s Business Wire release: ^[11]

Revenue: $251.2 million
- Down about 2.3% year-on-year (from $257.0 million)
- Up about 6% sequentially (management referenced a sequential increase on the call).
Gross profit: $46.9 million vs. $44.3 million a year ago
- Gross margin improved to 18.7% from 17.2%.
Net income: $30.7 million vs. $28.0 million
Diluted EPS:$2.17 vs. $2.00 last year
EBITDA: $40.3 million vs. $37.5 million (EBITDA margin up to 16.0% from 14.6%)
Dividend per share (quarter):$0.50, up from $0.375 a year ago.

For the first nine months of fiscal 2026: ^[12]

Revenue: $682.6 million (+6.4% YoY)
Gross margin: 18.8% (up from 14.6%)
Net income: $88.6 million vs. $54.1 million
Diluted EPS:$6.27 vs. $3.91
EBITDA: $106.8 million vs. $74.2 million.

Those are strong profitability trends for what is essentially a cyclical, project‑driven engineering and construction business.

Backlog explosion and new projects

The number the company really emphasized: backlog.

Project backlog: roughly $3.0 billion as of October 31, 2025, more than double the $1.4 billion at January 31, 2025. ^[13]
Management linked that jump largely to two new large gas‑fired power projects in Texas:
- The 1.4 GW CPV Basin Ranch Energy Center in Ward County, Texas
- An additional 860 MW gas facility, also in Texas. ^[14]
Across the portfolio, Argan is now under contract for roughly 6 GW of power‑generation capacity.

On the earnings call, CEO David Watson described the environment as one of “significant urgency” to build new combined‑cycle natural gas plants to replace aging capacity and support the “electrification of everything,” while emphasizing that Argan is one of a small group of contractors capable of delivering such complex projects. ^[15]

Fortress balance sheet

The Q3 report also underscored how unusually cash‑rich this company is: ^[16]

Cash, cash equivalents and investments: about $726.8 million (vs. $525.1 million at the start of the fiscal year)
Net liquidity (working capital): ~$377.3 million (vs. $301.4 million)
Debt:none
Share repurchases: roughly $109.6 million returned to shareholders via buybacks since late 2021.

On the call, management reiterated that low capex requirements, rising net liquidity, and a pristine balance sheet represent a major competitive advantage, especially when bidding on large EPC (engineering, procurement, construction) contracts that require bonding and financial strength. ^[17]

So why is the stock down? Expectations, revenue and a very high bar

From a cold, spreadsheet‑based perspective, Q3 looked good:

EPS advanced, margins expanded, backlog hit records, cash piled up. ^[18]

The problem is the stock had already priced in a lot of that strength, and the one obvious blemish — revenue slightly below expectations — gave short‑term traders a reason to hit the sell button.

ChartMill’s recap framed the quarter as “mixed Q3 results with strong earnings beat, revenue miss, and record backlog,” and Benzinga explicitly tied the pre‑market drop to weaker‑than‑expected sales. ^[19]

Layer on:

A huge run‑up in the share price over the past year (more than 100% gain). ^[20]
A lofty valuation multiple (forward P/E in the low 40s, price‑to‑sales near 4.7, and price‑to‑book close to 10.8, per GuruFocus). ^[21]

and it doesn’t take much of a narrative wobble to cause a sharp reset.

GuruFocus estimates that the current P/E of roughly 37–42 is near recent highs for the stock, and its proprietary “GF Value” model actually sees significant downside from current levels — one opinion among many, but a sign that some valuation frameworks are flashing “expensive.” ^[22]

Analyst reactions: downgrades, but targets still above the tape

Today’s move also comes amid a shift in analyst sentiment.

Lake Street, JPMorgan, GLJ and the consensus picture

According to a fresh GuruFocus summary: ^[23]

Lake Street this morning downgraded Argan from Buy to Hold, but raised its price target from $260 to $325 (+25%).
JPMorgan on December 1 cut the rating from “Overweight” to “Neutral” while lifting the target from $315 to $370.
GLJ Research upgraded AGX from “Hold” to “Buy” in November, increasing its target from $251 to $369.

MarketBeat, which aggregates eight recent analyst views, now shows: ^[24]

Consensus rating:“Hold” (5 holds, 3 buys)
Average 12‑month price target:$321
Range of targets:$150 (low) to $397 (high)
That average $321 target implies only about 6% upside from the roughly $302–$303 trading range quoted this morning.

GuruFocus, looking at a slightly narrower set of five analysts, pegs the average target higher, at about $341.8, with a high estimate of $447 and a low of $235, implying roughly 10% upside from around $311 at the time of that snapshot. ^[25]

In other words: analysts broadly still like the business, but after the massive rally many of them see limited upside at today’s price, which is exactly the kind of setup that can magnify any post‑earnings wobble.

Institutional and insider activity: big buys and big sales

Despite today’s drawdown, big money has been very active in AGX.

Hedge funds and asset managers

MarketBeat’s recent 13F‑based alerts highlight several notable moves: ^[26]

Arrowstreet Capital:
- Boosted its Argan stake by 696.9% in Q2.
- Now owns 296,988 shares, about 2.18% of the company, valued at roughly $65.5 million at the time of filing. ^[27]
Prudential Financial Inc.:
- Increased its position by 117.8%, to 19,375 shares worth approximately $4.27 million, or about 0.14% of Argan. ^[28]
Navellier & Associates:
- According to a Motley Fool–summarized filing, Navellier lifted its AGX stake in Q3 2025, taking the position to over $10 million in value by adding roughly 12,000 shares. ^[29]

MarketBeat estimates that about 79% of Argan’s shares are owned by hedge funds and other institutional investors, underscoring how institutionally crowded the name has become. ^[30]

Insider selling

The Prudential/MarketBeat piece also notes heavy insider selling: ^[31]

Over the last 90 days, insiders have sold about 106,795 shares, worth roughly $29.4 million.
That includes sales by senior executives, with insiders now holding around 6.69% of the company.

Heavy insider selling doesn’t automatically mean trouble — executives diversify, exercise options, pay taxes, etc. But paired with an extended valuation and a stock that has more than doubled, it’s a data point cautious investors will pay attention to.

Momentum status and valuation check

Until roughly 24 hours ago, Argan was ticking almost every box you’d expect to see in a high‑momentum growth name:

Zacks elevated AGX to its Rank #1 (Strong Buy) list and featured it in “Best Momentum Stocks to Buy for Dec. 3”, as well as bullish notes like “Is Argan (AGX) a Solid Growth Stock? 3 Reasons to Think ‘Yes’” and “3 Momentum Anomaly Stocks to Buy as Markets Gear Up for 2025 Swansong.” ^[32]
A Zacks piece yesterday pointed out that AGX had climbed 17.85% in just one week, reflecting strong relative strength versus peers. ^[33]
TradingView data show that even after today’s slide, AGX is still up roughly 17% over the past month and more than 100% over the last year. ^[34]

On valuation, various sources line up on one basic conclusion: this is not a cheap stock by traditional metrics.

Forward EPS: about $8.58
Forward P/E: in the low 40s (around 41–42) ^[35]
Market cap: around $4.8–4.9 billion ^[36]
Dividend:
- Annualized rate $2.00 per share (quarterly $0.50)
- Dividend yield: about 0.6–0.7% at current prices
- Dividend growth: roughly 27% year-on-year, with three consecutive years of increases
- Payout ratio: about 19% of earnings, leaving plenty of room for reinvestment and future hikes ^[37]

GuruFocus pegs the P/E, P/S and P/B ratios near the upper end of Argan’s historical range, and its GF Value model actually flags the stock as significantly overvalued relative to its long‑term fundamentals. ^[38]

That doesn’t mean the stock must fall further — valuation models are not crystal balls — but it explains why a small disappointment on the revenue line can trigger a big reaction in the share price.

Argan (AGX) stock forecast: what could drive the next move?

No one can tell you where AGX will trade next week. But the drivers of the story are pretty clear from management commentary and the latest sell‑side research.

Potential upside catalysts

Converting backlog into revenue without blowing margins
Investors will watch closely to see whether Argan can turn its $3.0 billion backlog into steady revenue growth while maintaining mid‑teens to high‑teens gross margins. Management has talked about targeting 16%+ gross margins, and year‑to‑date performance (18.8%) is ahead of that benchmark. ^[39]
New project awards over the next 12–24 months
On the Q3 call, Watson noted that Argan has added about 4.6 GW of major power jobs to backlog over the past year and believes it can handle 10–12 large projects at once as headcount scales. Additional wins — particularly in U.S. gas‑fired and large renewable projects — would reinforce the growth narrative. ^[40]
Grid and “electrification” megatrend
The company is positioned directly in the path of growing electricity demand, especially in regions struggling with grid reliability. If policy and market dynamics keep favoring new combined‑cycle plants and complementary renewables, Argan’s niche skills in complex EPC work could remain in high demand. ^[41]
Shareholder returns: dividends and buybacks
With no debt, substantial cash, and a modest payout ratio, Argan has ample room to continue raising its dividend and opportunistically repurchasing shares, something management has already done to the tune of over $100 million since 2021. ^[42]

Key risks and things to monitor

Execution risk on large fixed‑price projects
EPC work is notoriously unforgiving: one bad contract or cost overrun can chew up a lot of capital. Management repeatedly emphasizes its disciplined approach, but as backlog swells, execution risk naturally increases. ^[43]
Labor and capacity constraints
On the call, management acknowledged that specialized labor (engineering, commissioning, procurement talent) remains a challenge, even as they target capacity for 10–12 simultaneous major projects. Tight labor markets could pressure margins or slow project ramps. ^[44]
Valuation compression
If growth slows or the macro backdrop weakens, a forward P/E in the 40s leaves room for multiple contraction even if earnings keep growing. That’s essentially what today’s move is testing. ^[45]
Analyst & options sentiment
Zacks has highlighted unusual options activity in AGX, and firms like JPMorgan and Lake Street have recently moved to more neutral stances. Sustained negative flow in ratings or derivatives can amplify volatility in a name that is already widely owned by institutions. ^[46]

Bottom line

Argan, Inc. sits at an interesting crossroads:

Fundamentals: improving margins, a record backlog, strong earnings growth, a rising dividend, and a debt‑free balance sheet. ^[47]
Market reaction: a stock that ran hard into earnings and is now experiencing a sharp valuation shake‑out after a revenue miss and a wave of recalibrated analyst views. ^[48]

For investors following AGX, the story from here is less about what just happened in Q3 and more about whether management can keep turning that $3 billion backlog into high‑margin, well‑executed projects over the next few years.

If they can, today’s selloff will eventually look like another bump in a long uptrend. If not, this may end up being remembered as the moment when expectations finally got ahead of reality.

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