Freedom Broker Turns Bullish on Argan (AGX) After Record Quarter

Freedom Broker Turns Bullish on Argan (AGX) After Record Quarter

Sat, September 5, 2026 at 10:09 PM GMT+3 3 min read

• AGX +1.51%

On September 2, Argan, Inc. (NYSE:AGX) reported strong results for its second quarter of fiscal year 2027. The company posted record revenue of $384 million, a gross margin of 19.3%, record net income of $53 million, and record adjusted EBITDA of $70 million.

Following the strong results, Freedom Broker upgraded its rating on the stock from Hold to Buy with a price target of $700. Analyst Sergey Glinyanov noted that Argan, Inc.'s (NYSE:AGX) results showed strong execution across major Power projects. Over the last twelve months, the company has delivered strong revenue growth of 29%.

Argan, Inc. (NYSE:AGX) also has an impressive project backlog to support future revenue. As of July 31, 2026, consolidated project backlog stood at approximately $2.5 billion. While this was down from roughly $2.9 billion as of January 31, 2026, the backlog still provides a significant base for future revenue.

The company expects to add several projects over the next 7 to 15 months. Future performance could benefit from ramp-up of gas-fired projects and new contract awards.

"We maintain our $700 target price for AGX and upgrade the rating from Hold to Buy, reflecting the emerging upside potential," Glinyanov wrote.

Despite the strong quarter, Argan, Inc. (NYSE:AGX) faces some near-term headwinds. Revenue growth may slow in the third quarter of fiscal 2027 as some revenue was pulled forward into the second quarter.

The Industrial segment has been an area of concern. The segment's gross margin fell to 7.3%, below expectations, after cost overruns on a couple of projects unrelated to data center work. Estimates to complete these projects became less favorable than initially expected, putting pressure on profitability.

Management expects these projects to be finished over the next six months. As a result, Industrial margins could remain below historical levels for a quarter or two. However, this temporary weakness is expected to have a limited impact on the company's consolidated results.

Hedge Fund Interest

Hedge fund interest in Argan, Inc. (NYSE:AGX) weakened slightly in the second quarter of 2026. According to Insider Monkey's database, 39 hedge funds held positions in the stock in the second quarter of 2026, down from 42 funds in the first quarter.

Argan's strong rally could mean that investors have already priced in much of the company's recent success. Still, the stock remains well below its 52-week high of $805.75, while staying comfortably above its 52-week low of $197.

The company's record Q2 performance, project backlog, and expected project ramp-up support the bullish case. However, pulled-forward revenue, weaker Industrial margins and the stock's already strong gains could create some risks for investors.

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