Argan (AGX) shares rallied 13.7% in the last trading session to close at $422.5. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 18.3% gain over the past four weeks.
The stock is expected to have gained on the back of growing optimism in the market regarding the energy-infrastructure demand, especially AI data centers, electrification and grid expansion. Increased activity and demand trends for such projects move in favor of Argan, increasing its top-line growth and profitability prospects in the upcoming period. These positive aspects are likely to have boosted investors’ sentiments in favor of the stock.
This builder of energy plants is expected to post quarterly earnings of $1.99 per share in its upcoming report, which represents a year-over-year change of -10.4%. Revenues are expected to be $254.95 million, up 9.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Argan, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AGX going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Argan is a member of the Zacks Building Products - Miscellaneous industry. One other stock in the same industry, Quanex Building Products (NX), finished the last trading session 1.1% higher at $22.35. NX has returned 24.1% over the past month.
Quanex's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.05. Compared to the company's year-ago EPS, this represents a change of -126.3%. Quanex currently boasts a Zacks Rank of #5 (Strong Sell).
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Argan, Inc. (AGX): Free Stock Analysis Report Quanex Building Products Corporation (NX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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