Why Argan Stock Just Popped
Key Points
Argan delivered terrific sales and earnings last night.
Argan declined to give guidance on how the rest of the year will shake out.
As Argan's earnings swell, the tax man is coming to collect his bill.
- 10 stocks we like better than Argan ›
Argan (NYSE: AGX) stock moved 3.3% higher through 2:20 p.m. ET Thursday after crushing analyst forecasts for sales and earnings last night.
Heading into the company's Q2 report, Wall Street expected Argan to earn only $2.66 per share on $299.4 million in sales. Argan actually earned $3.76 per share on $384 million in sales.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Argan Q2 earnings
The engineering and construction company grew its sales an astonishing 61.5% year over year in Q2, and with improved profit margins, that translated into a better operating margin as well. Unfortunately, the tax man noticed Argan's improved earnings and took a significantly bigger bite out of them this year than last, resulting in earnings going up "only" 50%.
Sales grew 53% in the company's power segment -- the only one singled out for special mention. That was less than the overall revenue growth, however, which must mean that Argan's two other businesses -- industrial and teledata -- performed even better.
What's next for Argan stock
Management did not provide specific guidance on what to expect for the rest of this year, but with power continuing to "execute extremely well," a new factory coming online next quarter in industrial, and acquisitions bolstering the teledata business, one imagines the numbers will look pretty good.
On Wall Street, analysts forecast Argan will end this year with nearly $1.3 billion in sales (up more than 35% year over year), and $12.09 per share in profit (up only 24% -- because of the tax bite). With the stock trading for north of 35 times earnings, however, Argan stock already looks priced for the success it's enjoying.
With the stock up more than 72% over the last 52 weeks, most of the gains on this stock may already have been made.
Should you buy stock in Argan right now?
Before you buy stock in Argan, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Argan wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $446,157!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,377,357!*
Now, it’s worth noting Stock Advisor’s total average return is 983% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 3, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
