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1. Company Snapshot

1.a. Company Description

Alamo Group Inc.designs, manufactures, distributes, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural uses worldwide.Its Vegetation Management Division segment offers hydraulically-powered and tractor-mounted mowers, other cutters and replacement parts for heavy-duty and intensive uses and heavy duty applications, tractor- and truck-mounted mowing and vegetation maintenance equipment, and replacement parts.


This segment also provides rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts, zero turn radius mowers, cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts, heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment, replacement parts, tractor attachments, agricultural implements, hydraulic and boom-mounted hedge and grass cutters, tractor attachments and implements, hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators, self-propelled sprayers and multi-drive load-carrying vehicles, cutting blades, and hydraulic and mechanical boom mowers.The company's Industrial Equipment Division segment offers truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers, leaf collection equipment and replacement brooms, parking lot and street sweepers, excavators, catch basin cleaners, and roadway debris vacuum systems, as well as truck-mounted vacuum machines, combination sewer cleaners, and hydro excavators.This segment also offers ice control products, snowplows and heavy duty snow removal equipment, hitches, attachments, and graders; and public works and runway maintenance products, parts, and services, and high pressure cleaning systems and trenchers.


The company was founded in 1955 and is headquartered in Seguin, Texas.

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1.b. Last Insights on ALG

Alamo Group's recent performance was negatively driven by a 7.7% decline in fourth quarter net sales, primarily due to a 25.5% drop in Vegetation Management Division sales. The company's income from operations also decreased to $34.4 million, or 8.9% of net sales, due to separation costs and a labor strike at Gradall Industries. The total impact from cost reduction efforts was approximately $6.1 million, including separation expenses. The company's total debt was $220.5 million, and operating cash flow was $209.8 million, driven by disciplined inventory management and efficient receivables control.

1.c. Company Highlights

2. Alamo Group's Q3 2025 Earnings: A Mixed Bag

Alamo Group reported net sales of $420 million for the third quarter of 2025, a 5% increase from the same period last year, with organic growth of 3.4%. Adjusted net income was $28.2 million, down 3% from $28.6 million in Q3 2024. Adjusted EBITDA was $55 million, or 13% of net sales, compared to $55 million or 14% of net sales in the prior-year quarter. The company's EPS came in at $2.34, missing estimates of $2.61. The Industrial Equipment division drove revenue growth, with net sales up 17% to $247 million, while the Vegetation Management division saw a 9% decline in net sales to $173.1 million.

Publication Date: Nov -23

📋 Highlights
  • 5% Net Sales Growth:: Q3 2025 net sales reached $420M, reflecting a 5% increase from Q3 2024 with 3.4% organic growth.
  • Industrial Division Outperformance:: Industrial Equipment sales surged 17% to $247M, achieving 14.5% organic growth and 15.5% adjusted EBITDA margin.
  • Adjusted EBITDA Stability:: Adjusted EBITDA held steady at $55M (13% of sales), matching Q3 2024’s $55M despite 3% lower adjusted net income ($28.2M vs. $28.6M).
  • Strong Liquidity Position:: Total cash reserves of $244.8M and $1.595B in assets support $50M share buyback and $0.30 quarterly dividend ($15M annually).
  • Margin Recovery Targets:: Vegetation Management aims to restore margins above 10% via consolidation efficiencies, targeting 15% operating and 18–20% EBITDA margins by 2026.

Segment Performance

The Industrial Equipment division's strong performance was driven by a 14.5% organic growth rate, with adjusted EBITDA margin of 15.5%. In contrast, the Vegetation Management division faced margin challenges, with adjusted EBITDA margin of 9.7%. The company believes it can achieve operating margins above 10% in the Vegetation Management segment without significant revenue growth, driven by production efficiencies and volume leverage.

Growth Strategy and Outlook

Alamo Group's long-term strategy focuses on four pillars: people and culture, commercial excellence, operational excellence, and acquisitions. The company aims to achieve 10% plus sales growth through a combination of organic growth and M&A. Organic growth is expected to come from pricing, end markets, and market share gains driven by product innovation. The company expects its fourth-quarter revenue to decline by 4-5% sequentially due to seasonal trends.

Valuation and Dividend

With a P/E Ratio of 16.64 and an EV/EBITDA ratio of 9.27, the market appears to be pricing in moderate growth expectations. The company's dividend yield is 0.75%, with a quarterly dividend of $0.30 per share approved by the Board. Alamo Group's financial position remains strong, with total assets of $1.595 billion and cash on the balance sheet of $244.8 million.

Tariff Impact and Mitigation

Tariffs are impacting the Industrial segment, with costs running at less than 1% of sales. The company is working to pass on price increases to cover these costs. For 2026, Alamo Group expects a roughly 1% impact from tariffs on sales before considering any mitigation or offsets. The company is working to offset these costs through procurement savings and supply chain management.

3. NewsRoom

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New Strong Sell Stocks for Nov. 28

Nov -28

Source: zacks.com

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New Strong Sell Stocks for Nov. 25

Nov -25

Source: zacks.com

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New Strong Sell Stocks for Nov. 21st

Nov -21

Source:

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Alamo Group Inc. (ALG) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Alamo Group (ALG) Q3 Earnings Miss Estimates

Nov -07

Source: zacks.com

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ALAMO GROUP ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER 2025

Nov -06

Source: prnewswire.com

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New Strong Sell Stocks for Nov. 5

Nov -05

Source: zacks.com

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ALAMO GROUP INC. ANNOUNCES THIRD QUARTER 2025 EARNINGS CONFERENCE CALL

Oct -30

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.92%)

6. Segments

Vegetation Management

Expected Growth: 3.5%

Alamo Group's Vegetation Management segment growth of 3.5% is driven by increasing demand for vegetation maintenance services, government investments in infrastructure development, and adoption of mechanized solutions for vegetation control. Additionally, the segment benefits from a growing focus on environmental sustainability and public safety, leading to increased spending on vegetation management services.

Industrial Equipment

Expected Growth: 4.5%

Alamo Group Inc.'s Industrial Equipment segment growth of 4.5% is driven by increasing demand for infrastructure development, government investments in road construction, and rising adoption of precision agriculture. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to its growth.

7. Detailed Products

Agricultural Equipment

Alamo Group Inc. offers a range of agricultural equipment, including mowers, balers, and hay tools, designed to help farmers and ranchers efficiently manage their land and crops.

Turf and Landscape Equipment

The company provides turf and landscape equipment, such as mowers, trimmers, and edgers, for commercial and residential landscaping, golf courses, and sports turf applications.

Industrial Equipment

Alamo Group Inc. offers industrial equipment, including vacuum trucks, sewer cleaners, and hydro excavators, for municipalities, contractors, and industrial customers.

Truck and Trailer Mounted Equipment

The company provides truck and trailer mounted equipment, such as aerial devices, digger derricks, and cranes, for utility, telecommunications, and construction industries.

8. Alamo Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Alamo Group Inc. operates in a niche market with specialized equipment, reducing the threat of substitutes.

Bargaining Power Of Customers

Alamo Group Inc. has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

Alamo Group Inc. relies on a few key suppliers, giving them some bargaining power, but the company's size and diversification mitigate this risk.

Threat Of New Entrants

The specialized nature of Alamo Group Inc.'s equipment and the high barriers to entry in the industry reduce the threat of new entrants.

Intensity Of Rivalry

Alamo Group Inc. operates in a competitive industry with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.50%
Debt Cost 9.31%
Equity Weight 79.50%
Equity Cost 9.31%
WACC 9.31%
Leverage 25.78%

11. Quality Control: Alamo Group Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lindsay

A-Score: 6.0/10

Value: 5.3

Growth: 6.4

Quality: 6.7

Yield: 2.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Alamo Group

A-Score: 5.8/10

Value: 5.2

Growth: 7.1

Quality: 6.6

Yield: 1.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Wabash

A-Score: 4.9/10

Value: 9.6

Growth: 3.3

Quality: 6.5

Yield: 6.0

Momentum: 0.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Hyster-Yale

A-Score: 4.9/10

Value: 7.0

Growth: 6.4

Quality: 3.6

Yield: 7.0

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Gencor

A-Score: 3.9/10

Value: 5.3

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 0.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Columbus McKinnon

A-Score: 2.6/10

Value: 5.2

Growth: 2.1

Quality: 3.4

Yield: 2.0

Momentum: 0.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

164.86$

Current Price

164.86$

Potential

-0.00%

Expected Cash-Flows