Alamo Group Is Down 29%. What History Says Now

Alamo Group Is Down 29% in 336 Days. What History Says

Alamo Group Inc. (ALG) is down 29% from its all-time high as of July 15, 2026, having been in a drawdown for approximately 11 months (336 days). The Drawdown Severity Score™ has reached 5.1, placing the stock in the Strong severity level within the yellow zone after previously trading in the green zone. In the 12 comparable prior drops of 25% or more in the company's history, the stock spent an average of 747 days in drawdown before fully recovering.

Real-World Catalysts and Market Context

The transition of Alamo Group from the green zone to the yellow zone comes amid shifting dynamics in the industrial and infrastructure sectors. According to a report by TIKR.com, the stock has faced downward pressure even as projections indicate its earnings per share could climb 11% in 2026. This earnings growth outlook is contrasted by recent market performance, as investor expectations adjust to macroeconomic factors, rising interest rates, and shifting municipal budgets.

At the same time, the infrastructure sector continues to see mixed signals. Analysis from simplywall.st indicates that Alamo Group remains one of several infrastructure names closely tied to rising state spending, which often lags behind federal appropriations. Additionally, analysts at D.A. Davidson recently reiterated their stock rating on Alamo Group, citing a positive outlook for mergers and acquisitions, as reported by Investing.com. Despite these fundamental tailwinds, the stock price has steadily declined from its peak as investors demand stronger near-term execution.

The agricultural machinery sector has also experienced a broader slowdown, which has impacted Alamo Group's vegetation management division. While municipal demand for roadside mowing and street sweeping equipment remains relatively stable, agricultural dealers have been managing higher inventory levels. This inventory normalization has contributed to the softer demand environment that has weighed on the stock over the last 336 days.

Breaking Down the Current Drawdown Numbers

As of the data date on July 15, 2026, the current price of Alamo Group Inc. stands at $163.14. This represents a -29.4% drawdown from its all-time high of $231.18. The stock has spent 336 days in this drawdown, marking a prolonged period of downward price movement.

This decline has pushed our proprietary Drawdown Severity Score™ to 5.1. A Drawdown Severity Score™ of 5.1 is classified as Strong, which shifts the stock into the yellow zone. Previously, the stock resided in the green zone, indicating a much milder correction. The transition to the yellow zone signals that the current pullback is deeper and more persistent than typical minor fluctuations.

When an asset enters the yellow zone with a Strong Drawdown Severity Score™, it indicates that the current price action is deviating from its historical baseline. For Alamo Group, this transition reflects a shift from a standard market correction to a more prolonged structural pullback. The duration of 336 days highlights that selling pressure has been steady and persistent rather than a sharp, short-lived capitulation event.

Historical Drawdown Analysis

To understand the current -29.4% drop, we must look at the historical record of Alamo Group Inc. Our data shows that the company has experienced a total of 134 historical drawdown events. Across all 134 events, the average max drawdown is -7.4%, with an average drawdown duration of 86 days.

The current decline of -29.4% is far more severe than the historical average. In fact, Alamo Group has dropped 25% or more only 12 times in its history. When the stock experiences a drop of this magnitude, the recovery process is historically lengthy. The average duration of these 12 comparable drops is 747 days, illustrating that deeper pullbacks for this asset typically require extended periods to resolve.

This historical context is crucial for investors evaluating the current drawdown. A standard correction for Alamo Group is relatively shallow and brief, typically resolving in less than three months. However, when the stock crosses the 25% threshold, it enters a different regime of price behavior. The historical average of 747 days for these deep pullbacks suggests that recoveries are rarely rapid and often involve extended consolidation phases before the stock can reclaim its previous highs.

Industry Context and Competitive Landscape

Alamo Group operates in the industrial machinery sector, designing and manufacturing agricultural and infrastructure maintenance equipment. This sector is highly cyclical and sensitive to broader economic trends. For instance, Yahoo Finance recently published a comparison titled "ALG vs. DE: Which Stock Is the Better Value Option?", highlighting how investors are weighing Alamo Group against larger competitors like Deere & Co. (DE) in the current environment.

Furthermore, regulatory filings show that Alamo Group filed a notice to sell 2,215 common shares, according to Stock Titan. While this is a relatively small transaction, it reflects ongoing corporate activity. Earlier in the year, Quiver Quantitative reported that Alamo Group stock rose following its Q1 2026 earnings release, indicating that operational performance has had pockets of strength despite the overarching stock price decline.

The contrast between Alamo Group and larger peers like Deere & Co. is important. While larger agricultural equipment manufacturers are heavily exposed to global commodity prices and large-scale farming capex, Alamo Group's exposure is more diversified. Its industrial division, which serves governments and contractors, provides a buffer during agricultural downturns. However, when both divisions face headwinds simultaneously, as has occurred during this 336-day drawdown, the stock can experience more pronounced pressure.

The Data Picture

To help visualize how the current pullback compares to historical norms, we can look at the key metrics side by side. The table below outlines the contrast between typical corrections and the more severe 25% or greater declines.

This data highlights that the current 336-day period in drawdown is nearly four times longer than the average historical drawdown of 86 days. It also shows that when Alamo Group enters a severe drop of 25% or more, it has historically taken more than two years on average to complete the cycle and return to previous highs.

We can also examine how the frequency of these events has distributed over time. The fact that there have been only 12 occurrences of a 25% or greater drawdown out of 134 total events demonstrates that the current decline is a relatively rare event for Alamo Group. It represents a departure from normal trading behavior, which is why the Drawdown Severity Score™ has flagged this move as Strong.

What Changes This

For the Drawdown Severity Score™ to improve and transition back toward the green zone, Alamo Group would need to show sustained upward price momentum. Key catalysts that could drive this include stronger-than-expected infrastructure spending at the state and municipal levels, which would benefit the company's industrial division. Positive news regarding future mergers and acquisitions, as noted by D.A. Davidson, could also restore investor confidence and lift the stock price.

Conversely, the severity score could worsen if macroeconomic headwinds intensify. A slowdown in state infrastructure budgets or weaker agricultural sector demand could pressure earnings. If the stock price falls further below $163.14, the drawdown depth will increase, potentially pushing the severity score higher within the Strong range or even into a more critical zone.

Investors monitoring Alamo Group will want to watch upcoming quarterly earnings reports to see if the projected 11% EPS growth for 2026 remains on track. Any revision to these earnings expectations could quickly impact the stock's drawdown trajectory. Additionally, monitoring industry-wide inventory levels in the agricultural sector will provide clues as to when the current destocking cycle might end, potentially marking a turning point for the stock.