# Alamo Group (ALG.US)

Canonical: https://gigainvestors.com/s/ALG

Analysis as of: 2026-10-16T07:26:21.833Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $152.62 per share; close as of 2026-10-15.

Estimated value: low $142.94 per share, central $179.62 per share, high $207.67 per share. Buy at or below the central value $179.62 per share. Valuation as of 2026-10-16T07:26:21.833Z; scenarios are not confidence intervals.

Expected annual return: 11.3% at the stated quote. About 11.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.10×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.10×

- FY2018: 0.10×

- FY2019: 0.08×

- FY2020: 0.08×

- FY2021: 0.09×

- FY2022: 0.10×

- FY2023: 0.12×

- FY2024: 0.10×

- FY2025: 0.09×

- LTM to Mar 2026: 0.09×

### moat: fail

- ROIC median below threshold

- ROIC, median of available years: 13.3%

- ROIC, second-lowest year: 10.1%

- Typical minus recent gross margin: 0.4 pp

- Typical gross margin (annual median): 25.2%

- Recent gross margin (lower of latest and 3-year median): 24.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.9%

- ROIC including acquisitions, ten-year median: 10.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 12.0%

- FY2017: 14.5%

- FY2018: 16.3%

- FY2019: 9.1%

- FY2020: 10.1%

- FY2021: 11.7%

- FY2022: 13.3%

- FY2023: 16.8%

- FY2024: 15.1%

- FY2025: 13.4%

### economics: pass

- Owner earnings / net income, 5-yr: 1.16×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $624M

- Net income, five-year total: $538M

- Return on incremental invested capital: 48.5%

- Working capital / revenue, annual change: 0.3 pp

- Working capital / revenue, change between three-year averages: 2.5 pp

- Working capital / revenue, final three-year average: 35.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.24×

- FY2022: 1.15×

- FY2023: 1.08×

- FY2024: 1.24×

- FY2025: 1.13×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 14.5% vs 15.1%

- Per-share earnings: 3.76 to 9.63 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.5%

- Ordinary dilution, 5-year annual growth: 0.4%

- Market cap gain: $1.1B

- Cumulative retained earnings: $711M

- Diluted shares, 10-year annual growth: 0.5%

- Diluted shares, 5-year annual growth: 0.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 12.5%

- Per-share value change: $5.87

- Per-share value, starting three-year median: $3.76

- Per-share value, ending three-year median: $9.63

- Buybacks concentrated in cheaper years (correlation): 0.16

- Average buyback yield: 0.1%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $298M

- Cumulative net income, 10 years: $817M

- ROIC, first three-year median: 14.5%

- ROIC, last three-year median: 15.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: $3.46

- FY2017: $3.79

- FY2018: $6.25

- FY2019: $5.35

- FY2020: $4.88

- FY2021: $6.75

- FY2022: $8.54

- FY2023: $11.36

- FY2024: $9.63

- FY2025: $8.59

### accounting: pass

- Sloan accruals: -4.6%

- Receivables to sales index (DSRI): 0.98×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 5.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.71×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.31×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -6.4%

- FY2017: -4.1%

- FY2018: 8.4%

- FY2019: -2.1%

- FY2020: -11.3%

- FY2021: 2.5%

- FY2022: 6.7%

- FY2023: 0.4%

- FY2024: -6.5%

- FY2025: -4.6%

## Holders

- [Martin Whitman](https://gigainvestors.com/TA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 33% since Mar 2024 · sales +1.6%

Story as of 2026-10-16T09:58:16.175Z; price observation 2026-10-15.

Price needs cash profits to grow 1.6% a year for ten years

- 2025-06-10: ALG Q1 Earnings Call: Mixed Segment Trends and Ongoing Cost Initiatives Shape Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/alg-q1-earnings-call-mixed-131351144.html))

### Sales · FY2025–2026

sales +1.6%; source https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm; observed 2026-03-02.

- FY2017: $912M 

- FY2018: $1.0B 

- FY2019: $1.1B 

- FY2020: $1.2B 

- FY2021: $1.3B 

- FY2022: $1.5B 

- FY2023: $1.7B 

- FY2024: $1.6B 

- FY2025: $1.6B 

- FY2026: $1.6B 

### Gross margin · FY2025

gross margin 24.8%; source https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm; observed 2026-03-02.

- FY2016: 24.3% 

- FY2017: 25.7% 

- FY2018: 25.4% 

- FY2019: 24.4% 

- FY2020: 25.2% 

- FY2021: 25.1% 

- FY2022: 24.9% 

- FY2023: 26.8% 

- FY2024: 25.3% 

- FY2025: 24.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in farm & heavy construction machinery; annual sales are USD 1.6 billion.

- Source: https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm (filed 2026-03-02); FY2025: revenue 1603715000; grossProfit 397817000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); ALG.US: Alamo Group Inc. manufactures and sells industrial and vegetation management equipment for governmental, industrial, and agricultural uses worldwide. It operates in two segments, Vegetation Management and Industrial Equipment. The Vegetation Management segment offers tractor powered equipment such as rotary, finishing, flail, and disc mowers; rotary cutters; front end loaders, backhoes, tillers, posthole diggers, scraper blades, cultivators, subsoilers, and other tractor attachments and implements. This segment also provides commercial and residential zero turn mowers; hydraulic and mechanical boom and reach mowers; hedge and hedgerow cutters; industrial grass mowers; seedbed preparation equipment; and forestry and tree care tools, including chippers, stump grinders, mulchers, brush cutters, flails, and debarkers, as well as remote control mowers and related replacement parts. Its Industrial Equipment segment offers hydraulic telescoping booms; catch basin and roadway debris vacuum systems; sewer cleaners; vacuum trucks, combination sewer cleaners, hydro excavators, trenchers, and high pressure cleaning systems; truck mounted snow plows, blowers, dump bodies, spreaders, deicers, brine sprayers, snow throwers, and wing systems; salt spreaders; street sweepers, including mechanical broom and regenerative air models; leaf and debris collection equipment and replacement brooms; solid waste and recycling equipment; municipal tractors and attachments; asphalt patchers; underground construction forms; traffic control and crash attenuator trucks; industrial vacuum excavation units; trailer mounted and custom truck mounted systems; and related accessories and truck up fitting services. The company serves the infrastructure building and maintenance, industrial construction, public works, land maintenance, agriculture, and tree care markets. Alamo Group Inc. was founded in 1955 and is headquartered in Seguin, Texas.

### Why customers stay

Margins ranged from 24.8% to 26.8% during 2023–25; it earns 13.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2023: grossProfit / revenue = 26.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2024: grossProfit / revenue = 25.3%.

- Source: https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm (filed 2026-03-02); FY2025: grossProfit / revenue = 24.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); 10-year return on capital observations [[2016,0.12002818216822461],[2017,0.14454036526201836],[2018,0.1625730190603592],[2019,0.09057875610382563],[2020,0.10121012774699595],[2021,0.1165393976485109],[2022,0.13280363951204763],[2023,0.1682463502503994],[2024,0.15113487191040773],[2025,0.13354022229461457]]; median 0.1331719309033311. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 25% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm (filed 2026-03-02); Gross margin observations: [[2021,0.25071820827552815],[2022,0.24875397723068465],[2023,0.2684838466641928]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 3 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2016: growth capex 0; upkeep 9761000; owner earnings 51084000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2017: growth capex 0; upkeep 13490000; owner earnings 51289000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2018: growth capex 3585000; upkeep 23114000; owner earnings 73486000. Growth capex / owner earnings = 0.048784802547424.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2019: growth capex 1468000; upkeep 29965000; owner earnings 63103000. Growth capex / owner earnings = 0.023263553238356337.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2020: growth capex 0; upkeep 17874000; owner earnings 83770000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2021: growth capex 0; upkeep 25307000; owner earnings 99417000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2022: growth capex 0; upkeep 31304000; owner earnings 117313000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2023: growth capex 0; upkeep 37745000; owner earnings 146389000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2024: growth capex 0; upkeep 24993000; owner earnings 144021000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm (filed 2026-03-02); FY2025: growth capex 0; upkeep 30627000; owner earnings 116805000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); Dividend observations: [[2016,4114000],[2017,4614000],[2018,5124000],[2019,5626000],[2020,6124000],[2021,6627000],[2022,8549000],[2023,10485000],[2024,12442000],[2025,14415000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm (filed 2026-03-02); FY2025: cash repurchases 3022000 USD.

### Are managers owners

Insiders own 1.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); ALG.US SharesStats.PercentInsiders = 1.166 percentage points; cache date 2026-10-15.

### What could break it

US import tariffs could raise product costs.

- Source: https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm (filed 2026-03-02); its on agricultural imports/exports.

Our dependence on, and the price and availability of, raw materials as well as purchased components may adversely affect our business, results of operations and financial condition.

We purchase commodities, components, parts, accessories and other goods, such as steel, truck chassis, engines, transmissions, hydraulics, electrification components, and other items necessary for the manufacture of our end-products. The lack of availability or the increased cost of these purchased materials and components due to supply chain disruptions, inflation, increased tariffs, including broad-based reciprocal international tariffs, and/or other uncontrollable events have negatively affected our business operations and profitability and may continue to do so in the future. Historically, we have mitigated commodity, component, parts, and other input cost increases, in part, by increasing prices on our products and executing on our strategic productivity initiatives. However, we may not be able to fully offset increased input costs in the future. If our price increases are not accepted by our customers and the market or we are not able to realize anticipated manufacturing efficiencies, our net sales, profit margins, earnings, and market share could be adversely affected. Further, if we are unable to timely source items such as truck chassis, engines, hydraulics and other critical components our business, results of operations and financial condition may be adversely affected.

Skilled labor shortages or our inability to retain qualified employees could adversely affect our operations.

Our ability to maintain our productivity at competitive levels may be limited by our ability to employ, compensate, train and retain personnel necessary to meet our requirements. We may experience shortages of qualified personnel such as engineers, project managers, supervisors, and select skilled trades. We cannot be certain that we will be able to maintain an adequate skilled or unskilled labor force or key technical personnel necessary to operate efficiently and to support our growth strategy and operations. Shortages of skilled labor, such as welders and machine operators, are ongoing and could negatively affect our production capabilities, lead to production inefficiencies, or increase our cost of operating. Labor shortages or increased labor costs could impair our ability to operate our business, meet customer commitments or grow our revenues, and could materially and adversely impact our business, results of operations and financial results.

We depend on governmental sales, and a decrease in such sales could adversely affect our business, results of operations and financial condition.

A substantial portion of our revenues is derived from sales to federal, state, provincial and local governmental entities and related contractors, both in

### What the price says

The price assumes cash profits grow 1.6% yearly over ten years; actual growth was 8.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); Ten-year compound average after fade. Initial solved rate 0.010165960595215774. Price 152.62; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 4.339923358299948 → FY2025 9.671689989235738. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $64.92 per share

- 2016-11: $73.07 per share

- 2016-12: $76.10 per share

- 2017-01: $75.63 per share

- 2017-02: $75.15 per share

- 2017-03: $76.19 per share

- 2017-04: $79.06 per share

- 2017-05: $85.13 per share

- 2017-06: $90.81 per share

- 2017-07: $93.01 per share

- 2017-08: $91.76 per share

- 2017-09: $107.37 per share

- 2017-10: $105.50 per share

- 2017-11: $117.95 per share

- 2017-12: $112.87 per share

- 2018-01: $115.03 per share

- 2018-02: $111.15 per share

- 2018-03: $109.90 per share

- 2018-04: $109.47 per share

- 2018-05: $92.21 per share

- 2018-06: $90.36 per share

- 2018-07: $93.00 per share

- 2018-08: $95.30 per share

- 2018-09: $91.61 per share

- 2018-10: $85.72 per share

- 2018-11: $82.81 per share

- 2018-12: $77.32 per share

- 2019-01: $86.13 per share

- 2019-02: $96.04 per share

- 2019-03: $99.94 per share

- 2019-04: $103.64 per share

- 2019-05: $94.93 per share

- 2019-06: $99.93 per share

- 2019-07: $97.89 per share

- 2019-08: $114.18 per share

- 2019-09: $117.72 per share

- 2019-10: $107.06 per share

- 2019-11: $114.80 per share

- 2019-12: $125.55 per share

- 2020-01: $124.56 per share

- 2020-02: $110.77 per share

- 2020-03: $88.78 per share

- 2020-04: $98.44 per share

- 2020-05: $103.32 per share

- 2020-06: $102.64 per share

- 2020-07: $103.11 per share

- 2020-08: $110.90 per share

- 2020-09: $108.03 per share

- 2020-10: $120.33 per share

- 2020-11: $135.72 per share

- 2020-12: $137.95 per share

- 2021-01: $139.59 per share

- 2021-02: $152.63 per share

- 2021-03: $156.15 per share

- 2021-04: $157.25 per share

- 2021-05: $154.18 per share

- 2021-06: $152.68 per share

- 2021-07: $146.77 per share

- 2021-08: $155.01 per share

- 2021-09: $139.53 per share

- 2021-10: $151.20 per share

- 2021-11: $142.22 per share

- 2021-12: $147.18 per share

- 2022-01: $140.85 per share

- 2022-02: $139.11 per share

- 2022-03: $143.79 per share

- 2022-04: $126.44 per share

- 2022-05: $117.63 per share

- 2022-06: $116.43 per share

- 2022-07: $129.41 per share

- 2022-08: $130.76 per share

- 2022-09: $122.27 per share

- 2022-10: $152.08 per share

- 2022-11: $150.50 per share

- 2022-12: $141.60 per share

- 2023-01: $156.47 per share

- 2023-02: $182.39 per share

- 2023-03: $184.16 per share

- 2023-04: $176.73 per share

- 2023-05: $166.46 per share

- 2023-06: $183.91 per share

- 2023-07: $193.76 per share

- 2023-08: $171.65 per share

- 2023-09: $172.86 per share

- 2023-10: $160.30 per share

- 2023-11: $183.70 per share

- 2023-12: $210.19 per share

- 2024-01: $212.28 per share

- 2024-02: $202.29 per share

- 2024-03: $228.33 per share

- 2024-04: $194.38 per share

- 2024-05: $189.99 per share

- 2024-06: $173.00 per share

- 2024-07: $192.72 per share

- 2024-08: $185.40 per share

- 2024-09: $180.13 per share

- 2024-10: $169.54 per share

- 2024-11: $199.95 per share

- 2024-12: $185.91 per share

- 2025-01: $185.56 per share

- 2025-02: $174.98 per share

- 2025-03: $178.21 per share

- 2025-04: $166.98 per share

- 2025-05: $198.04 per share

- 2025-06: $218.38 per share

- 2025-07: $222.58 per share

- 2025-08: $211.46 per share

- 2025-09: $190.90 per share

- 2025-10: $178.72 per share

- 2025-11: $160.37 per share

- 2025-12: $167.87 per share

- 2026-01: $195.31 per share

- 2026-02: $213.53 per share

- 2026-03: $164.97 per share

- 2026-04: $173.44 per share

- 2026-05: $150.71 per share

- 2026-06: $164.49 per share

- 2026-07: $159.08 per share

- 2026-08: $164.58 per share

- 2026-09: $154.77 per share

- 2026-10: $152.62 per share

## Annual estimated value (USD per share)

- FY2016: low $47.50 per share, central $59.37 per share, high $69.29 per share

- FY2017: low $52.90 per share, central $65.73 per share, high $76.61 per share

- FY2018: low $59.27 per share, central $73.81 per share, high $85.94 per share

- FY2019: low $68.73 per share, central $89.32 per share, high $104.19 per share

- FY2020: low $76.53 per share, central $99.55 per share, high $116.07 per share

- FY2021: low $103.01 per share, central $135.56 per share, high $158.43 per share

- FY2022: low $120.35 per share, central $162.05 per share, high $189.62 per share

- FY2023: low $138.42 per share, central $188.78 per share, high $221.05 per share

- FY2024: low $144.45 per share, central $184.52 per share, high $213.52 per share

- FY2025: low $149.10 per share, central $184.77 per share, high $212.05 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/897077/000089707726000016/alg-20251231.htm); period 2025-12-31, filed 2026-03-02.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.