Alamo Group (ALG) AI Stock Analysis

• Market Cap: $2.00B
• Dividend Yield: 0.65%
• Average Volume (3M): 133.98K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.97
• Revenue Growth: -3.62%
• EPS Growth: -15.20%
• Country: US
• Employees: 3,750
• Sector: Industrials
• Sector Strength: 66
• Industry: Agricultural - Machinery
• EPS (TTM): 9.63
• Shares Outstanding: 12,063,468
• 10 Day Avg. Volume: 116,171
• 30 Day Avg. Volume: 133,984
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.36
• Price to Cash Flow (P/CF): 7.00
• P/FCF Ratio: 7.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $235.67
• Price Target Upside: 39.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Alamo Group's overall stock score reflects strong financial performance and stability, bolstered by revenue growth and improved margins. While technical indicators show bearish momentum, the company's fair valuation and positive earnings call guidance offset some concerns. The stock exhibits potential for future growth, contingent on successful navigation of division-specific challenges.

Positive Factors

Earnings Recovery

M&A remains a potential catalyst, further augmenting earnings recovery.

Industrial Division Prospects

Management’s outlook for Industrial is more positive with management noting 'excellent' prospects for the division.

Negative Factors

Demand Weakness

Orders and backlog have decreased year over year, suggesting weaker future demand.

Earnings Pressure

Backlog erosion will pressure earnings in the first half of 2025.

Profitability Concerns

The company's operating margin fell short of expectations, indicating pressure on profitability.

Alamo Group Business Overview & Revenue Model

Company Description

Alamo Group Inc. designs, manufactures, distributes, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural uses worldwide. Its Vegetation Management Division segment offers hydraulically-powered and tractor-mounted mowers, other cutters and replacement parts for heavy-duty and intensive uses and heavy duty applications, tractor- and truck-mounted mowing and vegetation maintenance equipment, and replacement parts. This segment also provides rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts, zero turn radius mowers, cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts, heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment, replacement parts, tractor attachments, agricultural implements, hydraulic and boom-mounted hedge and grass cutters, tractor attachments and implements, hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators, self-propelled sprayers and multi-drive load-carrying vehicles, cutting blades, and hydraulic and mechanical boom mowers. The company's Industrial Equipment Division segment offers truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers, leaf collection equipment and replacement brooms, parking lot and street sweepers, excavators, catch basin cleaners, and roadway debris vacuum systems, as well as truck-mounted vacuum machines, combination sewer cleaners, and hydro excavators. This segment also offers ice control products, snowplows and heavy duty snow removal equipment, hitches, attachments, and graders; and public works and runway maintenance products, parts, and services, and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas.

How the Company Makes Money

Alamo Group makes money primarily through the sale of its engineered products, which are distributed across various sectors such as agriculture and infrastructure maintenance. The company's revenue is generated from multiple streams, including direct sales to end-users, sales through a network of dealers, and governmental contracts for public works equipment. Additionally, Alamo Group benefits from recurring revenue through the provision of parts and services for its equipment, ensuring ongoing customer engagement and support. Strategic acquisitions and partnerships further complement its earnings by expanding its product offerings and market reach.

Alamo Group Financial Statement Overview

Summary

Alamo Group demonstrates strong financial health with consistent revenue growth and improved profitability margins, a solid balance sheet with a strong equity position, and robust cash flow management. However, attention to debt levels and minor revenue dips is advisable.

Income Statement

Alamo Group has demonstrated consistent revenue growth with a notable increase from $1.11 billion in 2019 to $1.69 billion in 2023. The gross profit margin has improved over the years, reaching 26.85% in 2023. The net profit margin also increased to 8.06% in 2023 from the previous year. The company maintains strong EBIT and EBITDA margins, indicating efficient operations. However, the slight decline in total revenue from 2023 to 2024 suggests potential challenges ahead.

Balance Sheet

The balance sheet shows a strong equity base with Stockholders' Equity rising from $569.76 million in 2019 to over $1 billion in 2024. The debt-to-equity ratio has improved, reflecting better leverage management. The equity ratio indicates a stable capital structure, though the total debt level remains significant. Overall, the balance sheet reflects financial stability but suggests monitoring debt levels.

Cash Flow

Alamo Group has experienced substantial growth in operating cash flow, with a significant increase in free cash flow by 2023. The free cash flow to net income ratio demonstrates the company's ability to generate cash efficiently relative to its earnings. However, fluctuations in investing and financing cash flows indicate variable investment activities and capital management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.63B	1.69B	1.51B	1.33B	1.16B
	Gross Profit
412.49M	453.64M	376.52M	334.51M	292.11M
	EBIT
164.81M	197.97M	148.59M	116.94M	93.17M
	EBITDA
223.26M	249.19M	195.28M	161.42M	143.43M
	Net Income Common Stockholders
115.93M	136.16M	101.93M	80.25M	57.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
197.27M	51.92M	47.02M	42.12M	50.20M
	Total Assets
1.45B	1.41B	1.31B	1.21B	1.11B
	Total Debt
220.48M	251.88M	301.95M	269.55M	285.39M
	Net Debt
23.21M	199.96M	254.94M	227.44M	235.19M
	Total Liabilities
432.02M	476.62M	523.15M	500.08M	483.69M
	Stockholders Equity
1.02B	932.76M	785.36M	705.66M	625.64M
Cash Flow		Free Cash Flow
184.78M	93.41M	-16.77M	24.36M	166.46M
	Operating Cash Flow
209.78M	131.15M	14.53M	49.67M	184.33M
	Investing Cash Flow
-22.18M	-52.62M	-31.74M	-33.44M	-14.17M
	Financing Cash Flow
-31.97M	-76.88M	24.45M	-23.00M	-164.24M

Alamo Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 168.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALG, the sentiment is Neutral. The current price of 168.46 is below the 20-day moving average (MA) of 171.38, below the 50-day MA of 179.23, and below the 200-day MA of 181.47, indicating a bearish trend. The MACD of -4.24 indicates Positive momentum. The RSI at 45.01 is Neutral, neither overbought nor oversold. The STOCH value of 47.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALG.

Alamo Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEX	78 Outperform	$2.25B	6.86	19.13%	2.00%	-0.47%	-34.74%
ALG	75 Outperform	$2.00B	17.21	11.88%	0.65%	-3.62%	-15.20%
LNN	73 Outperform	$1.38B	18.14	15.38%	1.15%	0.46%	12.22%
REVG	73 Outperform	$1.57B	17.19	20.13%	0.72%	-12.16%	-56.14%
HY	64 Neutral	$671.30M	4.72	32.90%	3.69%	4.61%	11.15%
Sector *	63 Neutral	$4.14B	11.23	5.47%	215.40%	4.10%	-8.63%
ASTE	60 Neutral	$772.68M	179.81	0.67%	1.54%	-2.47%	-87.25%

Alamo Group Corporate Events

Alamo Group CEO Jeff Leonard to Retire in 2025

Alamo Group Inc. has announced that its President and CEO, Jeff Leonard, plans to retire by mid-year 2025 following the appointment of his successor. The Board of Directors, which has been preparing for this transition as part of its succession planning efforts, anticipates naming a new leader in the coming months. Leonard, who has been with the company since 2011, expressed confidence in the company’s ongoing growth and the leadership team. Rick Parod, the Board’s Independent Chair, acknowledged Leonard’s significant contributions to the company’s growth and reputation, and emphasized the Board’s commitment to ensuring a smooth leadership transition.