- Record Backlog: $3 billion backlog (~6 GW of new power projects), including 1.4 GW CPB Basin Ranch and 816 MW Texas project.
- Revenue & Margins: $251.2M revenue (-2% YoY, +6% QoQ), gross margin improved to 18.7% (vs. 17.2% prior year).
- Strong Profitability: Net income $31M ($2.17/share), EBITDA $40.3M (16% of revenue), $727M cash/investments, no debt.
- Dividend & Shareholder Returns: 33% dividend increase to $0.50/share (annual $2/share), $32M returned to shareholders YTD 2026.
- Strategic Growth Focus: 10–12 labor teams, targeting large CCGT projects (>1 GW), exploring M&A, and expanding in Texas/PJM regions.
Strong Backlog and Growth Prospects
The company has a record backlog of approximately $3 billion, representing over six gigawatts of new thermal and renewable power plants. Argan added several new projects to its backlog, including the 1.4 gigawatt CPB Basin Ranch project and an 816 megawatt project in Texas. Management discussed their strategy to drive growth, improve project management effectiveness, and minimize costly project overruns. The company expects continued long-term growth and profitability driven by the increasing demand for new power resources to support the grid.
Margin Expansion and Cost Management
Argan's gross margin has expanded due to its focus on project management effectiveness and minimizing costly project overruns. The company remains intentionally conservative with its guidance, citing an 18% range as a possible target for fiscal year '27 gross margins. With an 18.8% gross margin over the year to date, the company has exceeded its 16% benchmark.
Valuation and Dividend Yield
With a P/E Ratio of 36.17 and an EV/EBITDA of 31.07, Argan's valuation multiples indicate a premium for its growth prospects. The company's dividend yield is 0.52%, with a quarterly dividend increased by 33% to 50¢ per common share. The ROE of 31.38% and ROIC of 23.17% demonstrate the company's ability to generate strong returns on equity and invested capital. Analysts estimate next year's revenue growth at 13.0%, which may justify the current valuation multiples.
Operational Capacity and Future Opportunities
Argan is growing its headcount to take on more work, with a labor capacity of around 10 to 12 teams. The company is being creative in deploying its talent, optimizing leaders across multiple jobs, and growing its teams to meet customer needs. Argan is seeing opportunities for larger projects, with some averaging over 1 gigawatt each, particularly in Texas, the PJM region, and other areas, including West Virginia and the Eastern Seaboard.