It's been a pretty great week for Argan, Inc. (NYSE:AGX) shareholders, with its shares surging 17% to US$59.46 in the week since its latest yearly results. Argan reported US$573m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.39 beat expectations, being 6.2% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Argan's dual analysts are now forecasting revenues of US$724.4m in 2025. This would be a substantial 26% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 53% to US$3.73. In the lead-up to this report, the analysts had been modelling revenues of US$640.4m and earnings per share (EPS) of US$3.32 in 2025. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 19% to US$65.00per share.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Argan's growth to accelerate, with the forecast 26% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Argan is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Argan following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Argan going out as far as 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Argan , and understanding it should be part of your investment process.
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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.