Argan (AGX) is drawing fresh attention after reporting a record project backlog of about US$3b, which reflects a larger pipeline of industrial construction work tied to rising power demand from AI and data center clients.

Despite the record backlog, Argan’s recent share price has cooled, with a 1 day share price return of 4.33% decline and a 7 day share price return of 5.16% decline. However, the 30 day and 90 day share price returns of 10.85% and 22.70% respectively, and a 1 year total shareholder return of 117.60%, suggest momentum has generally been strong over both shorter and longer periods.

If the AI and data center theme has your attention, this can be a useful moment to scan other high growth tech and AI names using high growth tech and AI stocks.

Argan now trades around US$363.88, roughly in line with a US$361 analyst price target and showing strong multi year returns. With a record US$3b backlog, is there still a buying opportunity here, or is potential future performance already reflected in the current price?

Most Popular Narrative: 0.8% Overvalued

Argan’s most followed valuation narrative pegs fair value at about $361, sitting slightly below the recent $363.88 close and framing the current enthusiasm as almost fully priced in.

Record backlog and continued project wins across gas, renewables, water treatment, and recycling plants provide multi year revenue visibility, indicating potential for increased operating leverage and higher gross margins as larger projects are executed successfully.

Want to see what kind of revenue path and margin profile could justify that price tag? The narrative leans on compounded top line growth, moderating profitability, and a future earnings multiple that has to stay elevated. Curious how those ingredients combine into that $361 fair value under an 8.4% discount rate and a long runway of power buildout assumptions?

Result: Fair Value of $361.00 (OVERVALUED)

However, that story can change quickly if large gas projects face permitting delays, or if power sector decarbonization speeds up and reduces future gas plant awards.

Build Your Own Argan Narrative

If you look at the numbers and come to a different conclusion, or simply want your own angle backed by the same data, you can build a custom Argan story in just a few minutes, starting with 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.

Looking for more investment ideas?

If Argan has sharpened your interest, do not stop here; widen your watchlist with curated shortlists that surface different types of opportunities other investors might overlook.

• Target potential value gaps by scanning these 864 undervalued stocks based on cash flows where prices and cash flows are assessed side by side.
• Ride the AI buildout theme further by checking out these 24 AI penny stocks that are plugged into computing, automation, and data infrastructure.
• Boost your income focus with these 13 dividend stocks with yields > 3% that filter for companies offering yields above 3%.

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.