Could Bigger EPC Jobs Push Argan Toward $2B Revenues Faster?

Argan, Inc.’s AGX path toward $2 billion in annual revenues may depend less on adding more projects and more on the rising value of each EPC contract. On the first quarter of fiscal 2027 earnings call, management noted that inflation, market conditions and higher project costs are making individual builds larger from both a revenue and cost perspective. Management said Argan’s current execution capacity remains roughly 10 to 12 simultaneous jobs, while affirming that $2 billion in annual revenues is achievable over time as the platform expands.

That distinction is important because Argan may not need to double its project count to approach the $2 billion mark. The company currently has eight power projects underway — six thermal and two renewable — and expects to add more over the next 10 to 18 months. At the same time, management is expanding its workforce cautiously, emphasizing that hiring and training employees to Argan’s execution standards takes time. While capacity remains a constraint, larger contract values could allow revenue to grow faster than the number of projects.

Argan’s existing portfolio already reflects the shift toward larger-scale work. Major gas-fired projects include the 1,350 MW CPV Basin Ranch Energy Center, the 1,200 MW Sandow Lakes Power Station, an 860 MW Texas thermal project and an approximately 700 MW combined-cycle project. Together, the company’s four U.S. gas-fired projects represent more than 4.1 GW of generating capacity. This ramp is already lifting results: revenues in the first quarter of fiscal 2027 rose 50.2% to $291 million from $193.7 million, driven largely by increased construction activity on recently awarded Power contracts. The Power segment contributed $227 million, or 78% of total revenues.

The key uncertainty is timing rather than demand. Management expects a handful of additional projects over the next 10 to 18 months, although awards depend on permits, equipment availability, financing and other development milestones. If those additions are increasingly gigawatt-scale and carry larger EPC values, they could accelerate Argan’s progress toward $2 billion in annual revenues, making the pace of new awards and project ramps critical factors to watch.

How Argan Compares With Larger Infrastructure Contractors

As Argan pursues larger EPC opportunities, it competes in an infrastructure market that also includes much larger firms such as Jacobs Solutions Inc. J and EMCOR Group, Inc. EME. Unlike these diversified contractors, Argan remains more concentrated on power-generation EPC projects, which gives it greater exposure to the economics of large gas-fired builds.

Jacobs is benefiting from larger, more complex AI and infrastructure programs. During the third quarter of fiscal 2026, backlog rose 27% year over year to a record $29 billion, while Infrastructure & Advanced Facilities net revenues reached nearly $2.1 billion. Jacobs also won a sole-source EPCM contract for Hut 8’s 1 GW Beacon Point AI data center campus, while management said its data center backlog has roughly doubled and its pipeline has tripled.

EMCOR is seeing a similar benefit from larger mission-critical projects. Second-quarter 2026 revenues rose 19.8% to $5.15 billion, while remaining performance obligations increased 44% to a record $17.14 billion. Management also noted that AI data center projects are becoming larger and more complex, increasing revenue intensity per project.

For Argan, that trend supports the idea that bigger EPC awards could accelerate revenue growth without requiring a proportional increase in project count.

AGX Stock’s Price Performance & Valuation Trend

Shares of this global provider of consulting services of engineering, procurement and construction have surged 85.5% year to date, outperforming the Zacks Building Products - Miscellaneous industry, the broader Construction sector and the S&P 500 Index.

AGX YTD Share Price Performance

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AGX stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 39.46, as evidenced by the chart below.

AGX’s P/E Ratio (Forward 12-Month) vs. Industry

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Earnings Estimate Revision of AGX

AGX’s earnings estimates for fiscal 2027 and 2028 have remained unchanged in the past 60 days. The revised estimates for fiscal 2027 and 2028 imply year-over-year growth of 38% and 29.4%, respectively.

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AGX’s Zacks Rank

Argan currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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