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Usa Compression (USAC)
NYSE:USAC
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USA Compression
(NYSE:USAC)
Rating:64Neutral
Price Target:
$28.00
▲(11.69%Upside)
Positive Factors
Future Orders
USAC expects to order new units to be placed in-service and is already working on building a ~2026 order book.
Operational Growth
USAC plans to add operating horsepower in FY25 and should benefit from CPI escalators and higher recontracting rates.
Negative Factors
Financial Outlook
The partnership's initial FY25 adj EBITDA outlook was underwhelming, especially since annualizing USAC's 4Q24 result after a one-time $3mn tax credit would still imply FY25 EBITDA above the high-end of USAC's guidance range.
Messaging and Performance
USAC's messaging around growth has been less clear and at times contradictory, which is highlighted by the partnership's marked underperformance against AROC/KGS over the past year.
USA Compression (USAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.93B
Dividend Yield8.42%
Average Volume (3M)267.15K
Price to Earnings (P/E)37.3
Beta (1Y)0.51
Revenue Growth10.03%
EPS Growth65.28%
CountryUS
Employees854
SectorEnergy
Sector Strength68
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.14
Shares Outstanding117,582,370
10 Day Avg. Volume274,619
30 Day Avg. Volume267,148
Financial Highlights & Ratios
PEG Ratio0.35
Price to Book (P/B)-16.42
Price to Sales (P/S)0.00
P/FCF Ratio15.11
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue1.07
Enterprise Value/Gross Profit10.75
Enterprise Value/Ebitda1.93
Forecast
1Y Price Target
$26.00Price Target Upside3.71% Upside
Rating ConsensusHold
Number of Analyst Covering3
USA Compression Business Overview & Revenue Model
Company DescriptionUSA Compression Partners, LP, a growth-oriented Delaware limited partnership that provides natural gas compression services in terms of total compression fleet horsepower. The company offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil, as well as operates stations. It primarily focuses on providing natural gas compression services to infrastructure applications, including centralized natural gas gathering systems and processing facilities. The company was founded in 1998 and is headquartered in Austin, Texas.
How the Company Makes MoneyUSA Compression generates revenue primarily through long-term, fee-based contracts with energy producers, processors, and transporters who require compression services to facilitate the movement and processing of natural gas. The company leases large-scale compression units to its clients, ensuring reliable operation and maintenance as part of its service offering. This business model provides a steady stream of income, as clients typically engage in multi-year contracts, ensuring predictable cash flows. USA Compression's strategic partnerships and customer relationships within the energy sector also play a significant role in driving its revenue growth and market presence.
USA Compression Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 3.17%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of strong operational performance and growth alongside challenges from market uncertainties and softening commodity prices. Despite some setbacks, the company's operational metrics remained solid, and leadership was proactive in addressing potential issues.Q1-2025 Updates
Positive Updates
Record Revenue per Horsepower
The company reported a record average revenue per horsepower per month, highlighting strong revenue, adjusted gross margin, and average horsepower utilization.
Strong Adjusted Gross Margins
Adjusted gross margins were nearly 67%, consistent with the company's expectations and demonstrating strong operational efficiency.
Expansion and Maintenance Capital Expenditures
First quarter 2025 expansion capital expenditures were $22.2 million and maintenance capital expenditures were $10.9 million, focusing on reconfigurations and new horsepower.
Promotion of Chris Wauson
Chris Wauson was promoted to Chief Operating Officer, acknowledged for his leadership and 26 years of industry experience.
Strong Data Center Market
Major companies like Amazon, Microsoft, and NVIDIA reaffirmed the strong demand in the data center market, supporting USA Compression's operations.
High Utilization Rate
The company maintained a high average utilization rate of 94.4%, consistent with the prior quarter.
Negative Updates
Softening Commodity Prices
Commodity prices have softened significantly, creating market uncertainty and potential impacts on production.
Tariff-Driven Market Uncertainty
The market is facing uncertainty due to tariffs, which could affect parts and materials business once current inventories are depleted.
Minimal Fleet Growth
Total fleet horsepower and revenue-generating horsepower were essentially flat on a sequential quarter basis, with only a 2% increase from a year ago.
Higher High-Yield Market Costs
The company noted a 50 basis point increase in the cost to issue notes compared to a few months ago, impacting refinancing strategies.
Company Guidance
During the USA Compression Partners' First Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance for the year. The first quarter net income was reported at $20.5 million, with an operating income of $69.4 million. The company's average revenue per horsepower reached an all-time high of $21.06, representing a 6% increase year-over-year. Average active horsepower remained stable at 3.56 million, with a total fleet horsepower of approximately 3.9 million. The company maintained an adjusted EBITDA range of $590 million to $610 million and a distributable cash flow range of $350 million to $370 million. Expansion capital expenditures were projected to be back-end loaded, with a range of $120 million to $140 million, while maintenance capital was expected to fall between $38 million and $42 million. The leverage ratio was reported at 4.08 times, with a target to maintain it at or below 4 times debt to EBITDA. The company also highlighted its expansion strategy, including the order of 40,000 new horsepower, primarily to be delivered by year-end, and ongoing evaluations for future opportunities. Additionally, the company addressed the impact of tariff-driven market uncertainty, noting that current inventories should minimize short-term effects on parts and materials costs.USA Compression Financial Statement Overview
Summary
USA Compression shows robust revenue growth and improving profitability metrics, with a strong income statement performance. However, the balance sheet reveals high financial leverage and negative equity, indicating potential financial risk. Cash flows are improving, which may lead to future stability.Income Statement
The income statement shows a strong revenue growth trend with a TTM revenue of $966.41 million, up from $846.18 million in 2023. The gross profit margin is robust at 38.82%, and the net profit margin has improved to 9.99%. However, the EBITDA margin has slightly decreased compared to the previous annual report. Overall, the company demonstrates solid profitability despite some fluctuations in EBITDA margin.75
Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio due to substantial total debt of $2.55 billion and negative stockholders' equity in the TTM period. This indicates financial leverage concerns. The equity ratio is negative, suggesting potential financial instability. Improvements in net income have not yet translated into stronger equity positions.45
Neutral
Cash Flow
The cash flow statement reveals an increase in free cash flow from $136.48 million in 2024 to $205.46 million in TTM. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio, while positive, suggests room for improvement in converting income to free cash flow.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 966.41M | 950.45M | 846.18M | 704.60M | 632.64M | 667.68M | Gross Profit |
| 375.24M | 372.97M | 315.37M | 233.59M | 199.49M | 222.78M | EBIT |
| 297.26M | 294.45M | 231.98M | -64.28M | -95.26M | -76.09M | EBITDA |
| 466.75M | 560.03M | 485.65M | 406.06M | 379.85M | -225.40M | Net Income Common Stockholders |
| 96.51M | 99.58M | 68.27M | 30.32M | 10.28M | -594.73M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.00K | 14.00K | 11.00K | 35.00K | -18.55M | 2.00K | Total Assets |
| 2.71B | 2.75B | 2.74B | 2.67B | 2.77B | 2.95B | Total Debt |
| 2.55B | 2.51B | 2.35B | 2.12B | 1.99B | 1.95B | Net Debt |
| 2.55B | 2.51B | 2.35B | 2.12B | 2.01B | 1.95B | Total Liabilities |
| 2.73B | 2.72B | 2.55B | 2.78B | 2.77B | 2.13B | Stockholders Equity |
| -11.90M | 27.76M | 183.05M | -116.30M | 578.42M | 814.96M |
| Cash Flow | Free Cash Flow | ||||
| 205.46M | 136.48M | 33.36M | 126.37M | 220.21M | 184.13M | Operating Cash Flow |
| 330.07M | 341.33M | 271.88M | 260.59M | 265.43M | 293.20M | Investing Cash Flow |
| -121.48M | -202.01M | -232.65M | -129.94M | -39.19M | -105.10M | Financing Cash Flow |
| -208.59M | -139.32M | -39.26M | -130.61M | -226.24M | -188.11M |
USA Compression Technical Analysis
Neutral
25.07
Price Trends
24.55
Positive
25.48
Negative
23.68
Positive
Market Momentum
0.16
Positive
47.49
Neutral
18.18
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USAC, the sentiment is Neutral. The current price of 25.07 is below the 20-day moving average (MA) of 25.32, above the 50-day MA of 24.55, and above the 200-day MA of 23.68, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 47.49 is Neutral, neither overbought nor oversold. The STOCH value of 18.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for USAC.
USA Compression Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.34B | 20.80 | 17.89% | 3.09% | 20.14% | 43.55% | |
77 Outperform | $329.66M | 19.70 | 6.77% | ― | 22.64% | 78.46% | |
77 Outperform | $2.96B | 63.99 | 3.88% | 5.35% | 45.41% | -37.84% | |
72 Outperform | $2.17B | 8.88 | 13.18% | 2.39% | -7.45% | -44.88% | |
69 Neutral | $1.10B | 26.61 | 4.51% | 3.05% | -4.91% | -46.51% | |
64 Neutral | $2.93B | 37.32 | 148.57% | 8.42% | 10.03% | 65.28% | |
58 Neutral | $7.53B | 3.34 | -4.45% | 10.13% | 0.83% | -49.64% |
* Energy Sector Average
Performance Comparison
USAC
USA Compression
25.07
3.16
14.42%
AROC
Archrock
24.81
6.43
34.98%
NGS
Natural Gas Services Group
26.66
7.26
37.42%
WTTR
Select Energy Services
9.32
-0.56
-5.67%
LBRT
Liberty Oilfield Services
13.51
-6.40
-32.14%
KGS
Kodiak Gas Services, Inc.
34.08
9.28
37.42%
USA Compression Corporate Events
Business Operations and Strategy
USA Compression Engages at RBC Capital Conference
Neutral
May 30, 2025
On June 4, USA Compression‘s senior management attended the RBC Capital Markets Global Energy, Power & Infrastructure Conference, engaging with the investment community. This participation highlights the company’s active role in investor relations and could influence its market positioning and stakeholder engagement.
The most recent analyst rating on (USAC) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on USA Compression stock, see the USAC Stock Forecast page.
Business Operations and Strategy
USA Compression Engages at Energy Infrastructure Conference
Neutral
May 16, 2025
On May 21, senior management from USA Compression Partners, LP attended the Energy Infrastructure Council CEO & Investor Conference, engaging with the investment community through a series of meetings. Presentation materials from these meetings were made available on the company’s website, highlighting their commitment to investor relations and transparency.
The most recent analyst rating on (USAC) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on USA Compression stock, see the USAC Stock Forecast page.
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.