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Archrock
(NYSE:AROC)
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Rating:67Neutral
Price Target:
$32.00
â–²(2.43% Upside)
Action:Downgraded
Date:08/06/26
The score is driven primarily by improving fundamentals (strong margins and cash flow) and a generally positive earnings-call backdrop (high utilization, strong contract margins, better leverage, and a major contract win). These strengths are moderated by weak technical momentum (below key moving averages with negative MACD), moderate—not bargain—valuation (P/E ~19.4, yield ~2.4%), and ongoing risks highlighted in the data such as revenue volatility and near-term cost/supply-chain pressures.
Positive Factors
High utilization and durable margins
Sustained utilization above 94% and contract margins above 70% indicate strong demand for Archrock’s compression services and effective fleet deployment. Repeated margin performance supports durable cash generation and suggests the core contracted-services model can remain profitable across upcoming quarters.
Negative Factors
Aftermarket services weakness
The sharp AMS decline shows that a meaningful revenue stream remains exposed to customer timing decisions and lumpy maintenance activity. Continued deferrals or weaker parts demand could pressure consolidated growth and offset the benefits of strong contract-operations margins.
Read all positive and negative factors
Positive Factors
Negative Factors
High utilization and durable margins
Sustained utilization above 94% and contract margins above 70% indicate strong demand for Archrock’s compression services and effective fleet deployment. Repeated margin performance supports durable cash generation and suggests the core contracted-services model can remain profitable across upcoming quarters.
Read all positive factors
Archrock (AROC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.12B
Dividend Yield2.96%
Average Volume (3M)1.69M
Price to Earnings (P/E)16.0
Beta (1Y)0.79
Revenue Growth11.54%
EPS Growth40.91%
CountryUS
Employees1,350
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)1.86
Shares Outstanding175,338,180
10 Day Avg. Volume1,583,433
30 Day Avg. Volume1,691,740
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)3.04
Price to Sales (P/S)3.05
P/FCF Ratio37.94
Enterprise Value/Market Cap1.85
Enterprise Value/Revenue6.29
Enterprise Value/Gross Profit10.83
Enterprise Value/Ebitda11.75
Forecast
1Y Price Target
$41.75Price Target Upside33.64% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.72
Revenue Forecast (FY)$1.52B
Archrock Business Overview & Revenue Model
Company Description
Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, i...
How the Company Makes Money
Archrock primarily makes money by providing natural gas compression services under contracts where it supplies, operates, and maintains compression equipment (compression horsepower) at or near customer facilities. The largest revenue stream gener...
Archrock Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial position: high utilization (94.4%), strong contract operations margins (71%), healthy free cash flow ($67M), improved leverage (2.6x), credit outlook upgrades, and a large multi‑year contract and long-term growth CapEx plan. Offsetting items include a sizable decline in aftermarket services revenue (~35% YoY), near-term cost pressures (lube oil and make-ready costs), supply-chain constraints with very long OEM lead times (~195–200 weeks) and a modest tightening of adjusted EBITDA guidance (top end reduced by $30M). On balance, the company emphasized durable demand, disciplined capital allocation, and the ability to return capital while investing for growth.Positive Updates
Large Multi-Year Contract Win
Signed a long-term agreement with an existing strategic customer covering ~665,000 horsepower for midstream applications with an 8-year base term plus a 2-year extension option — underscores customer demand and fleet value.
Negative Updates
Softness in Aftermarket Services (AMS) Revenue
AMS revenue declined to $42 million in Q2 from $65 million a year ago, a decrease of approximately 35% year-over-year, primarily due to deferred major maintenance and lower parts sales; AMS remains lumpy despite improved margin percentage (24% vs. 23% a year ago).
Read all updates
Q2-2026 Updates
Positive
Negative
Large Multi-Year Contract Win
Signed a long-term agreement with an existing strategic customer covering ~665,000 horsepower for midstream applications with an 8-year base term plus a 2-year extension option — underscores customer demand and fleet value.
Read all positive updates
Company Guidance
Archrock tightened 2026 adjusted EBITDA guidance to $865–$885 million (from $865–$915M) citing near‑term lube oil and make‑ready cost pressures, AMS deferrals and higher LTIP expense, reaffirmed 2026 total CapEx of ~$400–$445M (growth CapEx $250–$275M, maintenance $125–$135M, other $25–$35M) and unveiled a 2027–2030 growth plan of ~$1.4–$1.6B to add ~1.0 million horsepower; it expects to return 25–35% of operating cash flow to shareholders (quarterly dividend raised to $0.23/sh or $0.92 annualized, ~+10% YoY, dividend coverage 3.1x) while retaining ~$113M of buyback authorization. At quarter end Archrock reported Q2 adjusted EBITDA $213M, adjusted EPS $0.38, adjusted free cash flow $67M (after dividends $28M), returned $39M in dividends, operating horsepower 4.5M (vs. 4.7M a year ago after ~165k HP sales), utilization 94.4%, contract ops adj. gross margin 71% (AMS margin 24%), long‑term debt $2.3B, leverage 2.6x (vs. 3.3x a year ago; target 3.0–3.5x), $631M liquidity, and expects H2 margins around ~70% amid ~195–200 week Cat lead times.Archrock Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
62
Positive
Cash Flow
77
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.50B | 1.49B | 1.16B | 990.34M | 845.57M | 781.46M |
| Gross Profit | 874.50M | 723.63M | 699.09M | 541.32M | 426.08M | 422.54M |
| EBITDA | 806.04M | 845.74M | 559.97M | 428.00M | 308.90M | 315.38M |
| Net Income | 328.53M | 322.29M | 172.23M | 105.00M | 44.30M | 28.22M |
Balance Sheet | ||||||
| Total Assets | 4.44B | 4.35B | 3.82B | 2.66B | 2.60B | 2.59B |
| Cash, Cash Equivalents and Short-Term Investments | 2.00M | 1.55M | 4.42M | 1.34M | 1.57M | 1.57M |
| Total Debt | 2.36B | 2.42B | 2.21B | 1.60B | 1.56B | 1.55B |
| Total Liabilities | 2.89B | 2.86B | 2.50B | 1.78B | 1.74B | 1.70B |
| Stockholders Equity | 1.55B | 1.49B | 1.32B | 871.02M | 860.69M | 891.44M |
Cash Flow | ||||||
| Free Cash Flow | 291.33M | 119.64M | 70.56M | 11.55M | -36.42M | 139.51M |
| Operating Cash Flow | 725.64M | 622.11M | 429.59M | 310.19M | 203.45M | 237.40M |
| Investing Cash Flow | -252.94M | -606.90M | -1.16B | -232.49M | -130.92M | 16.11M |
| Financing Cash Flow | -476.56M | -18.07M | 733.55M | -77.92M | -72.54M | -253.03M |
Archrock Technical Analysis
Negative
31.24
Price Trends
31.28
Negative
33.85
Negative
33.71
Negative
Market Momentum
-0.55
Negative
43.43
Neutral
43.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROC, the sentiment is Negative. The current price of 31.24 is above the 20-day moving average (MA) of 30.12, below the 50-day MA of 31.28, and below the 200-day MA of 33.71, indicating a bearish trend. The MACD of -0.55 indicates Negative momentum. The RSI at 43.43 is Neutral, neither overbought nor oversold. The STOCH value of 43.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AROC.
Archrock Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $398.30M | 19.39 | 7.31% | 1.65% | 15.42% | 13.10% | |
69 Neutral | $5.77B | 15.18 | 22.39% | 1.26% | -5.65% | 0.77% | |
67 Neutral | $5.12B | 16.01 | 21.96% | 2.96% | 11.54% | 40.91% | |
66 Neutral | $5.56B | 67.89 | 7.85% | 0.69% | 70.52% | 70.05% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | $4.80B | 55.70 | 5.55% | 4.00% | 8.23% | -6.88% | |
63 Neutral | $3.70B | 23.73 | 141.15% | 8.34% | 19.87% | 60.57% |
* Energy Sector Average
AROC
Archrock
28.39
3.62
14.63%
NGS
Natural Gas Services Group
30.04
2.43
8.80%
WFRD
Weatherford International
81.18
11.30
16.18%
USAC
USA Compression
25.02
4.16
19.93%
SEI
Solaris Energy Infrastructure
58.61
11.31
23.90%
KGS
Kodiak Gas Services, Inc.
44.07
10.11
29.79%
Archrock Corporate Events
Executive/Board Changes
Archrock Announces Upcoming Retirement of Chief Accounting Officer
Neutral
Sep 28, 2026
On September 23, 2026, Archrock, Inc. announced that Donna A. Henderson, its Vice President and Chief Accounting Officer, notified the company of her intention to retire. Her retirement from the role will be effective December 4, 2026, marking an ...
Business Operations and StrategyRegulatory Filings and Compliance
Archrock Updates Investor Presentation Disclosure Practices Online
Neutral
Aug 11, 2026
On August 10, 2026, Archrock, Inc. published an investor presentation on its corporate website, making the materials available to shareholders and market participants through its Investor Relations page. The company signaled that this online porta...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.