Argan (AGX): Evaluating Valuation After Major Texas Power Plant Project Win

Argan (AGX) just announced that its subsidiary, Gemma Power Systems, will start work this year on a major 1,350 MW power plant in Texas. Construction will include full engineering, procurement, and construction services for the new facility.

See our latest analysis for Argan.

Argan’s project win in Texas comes on the back of an extraordinary run for the stock. Strong momentum has driven a one-day share price return of 2.6%, leading to a substantial year-to-date gain of 113.7%. Over the past year, total shareholder return surged 125.6%, and the three-year figure stands at a remarkable 845.4%. This highlights growing investor confidence and expectations regarding its future earnings potential.

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With shares soaring to new highs and the company posting robust revenue and income growth, investors are left wondering if Argan's success is already reflected in its valuation or if there is still room for upside ahead.

Most Popular Narrative: 7.6% Overvalued

With Argan's narrative fair value of $284.68 trailing its latest close at $306.21, Kerry sets the scene for a heated valuation debate rooted in aggressive revenue momentum and sky-high expectations.

“Argan’s project backlog is a major growth catalyst, exceeding $1 billion as of the latest reports. This backlog includes a significant mix of renewable energy projects and provides strong revenue visibility for future quarters. Recent contract wins, particularly in infrastructure and power generation, have bolstered investor confidence and set the stage for sustained top-line growth.”

Read the complete narrative.

How bold are the forecasts behind this premium price? The narrative hints at a decade-long uptrend, fueled by eye-popping growth rates and an earnings outlook rarely seen in the sector. Ready to uncover what’s driving such a high bar for Argan’s future? There is a surprising logic, and a few numbers you won’t expect, underneath this valuation story.

Result: Fair Value of $284.68 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent cost inflation or margin pressures could challenge Argan’s high expectations. This may potentially reshape investor sentiment around the company’s growth story.

Find out about the key risks to this Argan narrative.

Another View: Discounted Cash Flow Puts a Different Spin on Argan's Value

While the current valuation debate focuses on share price versus narrative fair value, our DCF model offers a fresh angle. According to the SWS DCF estimate, Argan is trading about 11% above its fair value ($306.21 vs. $275.76). Could the market be factoring in more optimism than the cash flows justify?

Story Continues

Look into how the SWS DCF model arrives at its fair value.AGX Discounted Cash Flow as at Nov 2025

Build Your Own Argan Narrative

If you see the story differently or want to dig into the numbers for yourself, you can craft your own narrative in just a few minutes. Do it your way

A great starting point for your Argan research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

Companies discussed in this article include AGX.

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