Alamo Group’s Latest Quarter in Focus

Alamo Group (ALG) opened 2026 with Q4 2025 revenue of US$373.7 million, basic EPS of US$1.29 and net income of US$15.5 million. This sets the stage for how investors read the new Q1 2026 update against the recent cooling in profitability. Over the last six reported quarters, revenue has ranged between US$373.7 million and US$420.0 million while quarterly basic EPS has moved between US$1.29 and US$2.65. This provides a clear view of how the earnings power has tracked the top line. With trailing net profit margins easing from 7.1% to 6.5%, this latest set of results sits in a context where investors are watching how efficiently each revenue dollar is being converted into profit.

See our full analysis for Alamo Group.

With the numbers on the table, the next step is to see how this earnings run rate lines up against the dominant market narratives around Alamo Group and where those stories might need updating.

Margins Drift as Net Profit Slips to 6.5%

• Over the last 12 months, Alamo Group converted US$1.6b of revenue into US$103.8 million of net income. This works out to a 6.5% net profit margin compared with 7.1% a year earlier, alongside an 11.3% annualized earnings growth rate over the past five years and a decline in earnings over the most recent year.
• Analysts' consensus view highlights infrastructure spending and automation demand as long term supports for revenue and margins. However, the shift from a 7.1% to 6.5% margin and the recent negative earnings growth show that, while longer term earnings growth has been solid, the latest twelve months do not fully match that bullish tone.
  • The consensus points to record sales in key equipment divisions and operational efficiencies as positives, but the trailing margin data indicate that recent profitability has not kept pace with those earlier strengths.
  • At the same time, management emphasis on cost controls and efficiency gains in prior periods ties in with the still positive five year earnings growth rate, even though the latest year has broken that trend.

P/E of 19.6x vs Peers at 22.9x

• The stock trades on a trailing P/E of 19.6x compared with a peer average of 22.9x and a US Machinery industry average of 26.9x. The current share price of US$166.97 also sits below an indicated DCF fair value of US$177.19.
• Bulls argue that this lower P/E and the gap to the US$177.19 DCF fair value reflect a valuation discount rather than a quality issue. The trailing figures give some support to that view but also show why the discount exists.
  • An 11.3% annualized earnings growth rate over five years and high described earnings quality line up with the bullish claim that Alamo Group has created value over time that is not fully reflected in a sub industry P/E multiple.
  • However, the one year earnings decline and the move in net margin from 7.1% to 6.5% highlight that recent performance has cooled, which can justify part of the discount while investors wait to see if earlier growth patterns resume.

On days when the stock feels stuck, understanding why a 19.6x P/E sits below peers can help you judge whether this is a valuation gap or a fair discount for softer margins, and that is where bullish and cautious investors often part ways. 🐂 Alamo Group Bull Case

Short Term Slowdown Vs 11.3% Five Year EPS Growth

• Trailing twelve month basic EPS of US$8.64 compares with a five year annualized earnings growth rate of 11.3%. The latest year registered negative earnings growth, so the current run rate is below what that longer track record might suggest.
• Bears focus on this recent break from the five year growth pattern and on the margin slip to argue that relying on past EPS growth can be risky, and the reported figures give them specific points to lean on.
  • With net income over the last 12 months at US$103.8 million on US$1.6b of revenue and margins at 6.5%, the business is profitable but not expanding margins compared with the prior year figure of 7.1%.
  • That contrast between a solid multi year CAGR and a weaker latest year provides a factual basis for caution, especially for investors who want consistency between short term trends and the historical averages they use in their models.

When you see a solid five year earnings record alongside a weaker recent year, it is worth reading both the optimistic and cautious takes together before deciding how much weight to give each. 🐻 Alamo Group Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Alamo Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If the mixed tone of these results leaves you unsure, take a closer look at the underlying data and how it fits your own risk tolerance. To see what investors currently view as the key upsides, check the 2 key rewards.

Explore Alternatives

Alamo Group’s recent margin slip from 7.1% to 6.5% and the latest year of negative earnings growth contrast with its stronger five year EPS record.

If that softer profitability trend makes you hesitant to rely on a single stock for earnings growth, check out the 51 high quality undervalued stocks to find companies where current pricing already reflects such risks and may offer a more attractive entry point.

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.