Archrock (AROC) AI Stock Analysis

• Market Cap: $4.57B
• Dividend Yield: 3.08%
• Average Volume (3M): 1.41M
• Price to Earnings (P/E): 17.1
• Beta (1Y): 1.17
• Revenue Growth: 31.94%
• EPS Growth: 64.74%
• Country: US
• Employees: 1,300
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.40
• Shares Outstanding: 175,369,640
• 10 Day Avg. Volume: 906,160
• 30 Day Avg. Volume: 1,413,747
• PEG Ratio: 0.41
• Price to Book (P/B): 3.05
• Price to Sales (P/S): 3.48
• P/FCF Ratio: 57.16
• Enterprise Value/Market Cap: 1.57
• Enterprise Value/Revenue: 4.98
• Enterprise Value/Gross Profit: 7.78
• Enterprise Value/Ebitda: 9.43
• 1Y Price Target: $32.00
• Price Target Upside: 22.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $29.00 ▲(11.28% Upside)

The score is driven primarily by solid financial performance (strong margins and sharply improved free cash flow) and a constructive earnings update with raised EBITDA guidance and high utilization. Technicals are supportive with price above key moving averages and a positive MACD, while valuation is reasonable with a ~3.09% dividend yield. Leverage and industry/operational risks (commodity volatility and long equipment lead times) temper the upside.

Positive Factors

High margins and materially improved free cash flow

Sustained high gross and EBITDA margins alongside a dramatic free cash flow improvement indicate durable operating efficiency and strong cash conversion. This enhances reinvestment capacity, supports dividends and buybacks, and reduces reliance on external funding over the medium term.

Very high fleet utilization and long on-location durations

Consistently high utilization and long asset-in-place durations point to sticky, contract-driven revenue and effective asset deployment. High utilization supports steady cash flows, lowers per-unit costs, and limits the need for immediate fleet expansion, strengthening medium-term margin sustainability.

Active capital-structure management to extend maturities

Issuing long-dated senior notes to repay revolver exposure meaningfully reshapes maturities and reduces bank-debt reliance. Extending tenor and locking fixed-rate financing lowers refinancing risk and improves liquidity predictability, bolstering balance-sheet resilience for years ahead.

Negative Factors

Elevated leverage despite recent reductions

Relatively high leverage increases interest and refinancing exposure, constraining strategic flexibility in downturns. Even with modest deleveraging, elevated leverage can limit capacity for incremental M&A or capex without further cash generation or capital actions, raising medium-term risk.

Extended equipment lead times

Prolonged supplier lead times slow fleet expansion and replacement, delaying revenue capture from demand upcycles. Longer procurement cycles increase working capital needs, can elevate project execution risk, and may force higher growth capex planning and earlier order commitments.

Exposure to commodity volatility and demand headwinds

Archrock's earnings and utilization are linked to upstream activity and commodity prices. Persistent price swings or falling oil volumes could depress new contract starts and pricing, eroding revenue per operating horsepower and pressuring utilization and margins over the medium term.

Archrock Business Overview & Revenue Model

Company Description

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. It operates in two segments, Contract Operations and Aftermarket Services. The company engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining its owned fleet of natural gas compression equipment to provide natural gas compression services to customers in the oil and natural gas industry. It also offers various aftermarket services, such as sale of parts and components; and provision of operation, maintenance, overhaul, and reconfiguration services to customers who own compression equipment. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.

How the Company Makes Money

Archrock generates revenue primarily through its Contract Compression Services, which involves leasing and maintaining natural gas compressors for customers in the oil and gas sector. This segment provides a steady stream of income through long-term contracts that ensure consistent cash flow. Additionally, the Parts & Service segment contributes to revenue by offering maintenance services, spare parts, and customer support, further enhancing the company's profitability. Strategic partnerships with major energy companies and a focus on operational efficiency also play significant roles in driving earnings, as they enable Archrock to secure long-term contracts and optimize service delivery.

Archrock Financial Statement Overview

Summary

Archrock demonstrates solid financial health with strong revenue growth, profitability, and cash flow generation. The company effectively manages its operations, as evidenced by healthy margins and a robust ROE. While leverage remains a consideration, the consistent equity base and improved cash flow position mitigate associated risks.

Income Statement

Archrock's income statement shows strong performance with a consistent upward trajectory in revenue and profitability. The TTM data reveals a gross profit margin of 34.02% and a net profit margin of 18.43%, indicating efficient cost management and profitability. Revenue growth has been robust, with a 6.69% increase in the latest period, reflecting strong market demand. The EBIT and EBITDA margins are also healthy at 35.76% and 52.92%, respectively, showcasing operational efficiency. However, the slight decline in gross profit margin compared to the previous year suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.81, which is relatively high but manageable within the industry context. The return on equity (ROE) is strong at 19.28%, indicating effective use of equity capital to generate profits. The equity ratio stands at 32.26%, suggesting a balanced approach to financing with a reasonable level of equity supporting the asset base. While leverage is on the higher side, the company has maintained a consistent equity base, mitigating some risk.

Cash Flow

Archrock's cash flow statement highlights significant improvement in free cash flow, with an impressive growth rate of 822.81% in the TTM period. The operating cash flow to net income ratio is 2.59, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 29.02% suggests that a substantial portion of earnings is being converted into free cash flow, enhancing financial flexibility. Despite past volatility, the recent trends in cash flow are positive and support the company's operational needs.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.44B	1.16B	990.34M	845.57M	781.46M	874.97M
Gross Profit	921.13M	699.09M	541.32M	426.08M	422.54M	497.78M
EBITDA	760.48M	559.97M	424.68M	308.90M	315.38M	392.68M
Net Income	265.28M	172.23M	105.00M	44.30M	28.22M	-68.44M
Balance Sheet
Total Assets	4.41B	3.82B	2.66B	2.60B	2.59B	2.78B
Cash, Cash Equivalents and Short-Term Investments	4.08M	4.42M	1.34M	1.57M	1.57M	1.10M
Total Debt	2.57B	2.21B	1.60B	1.56B	1.55B	1.71B
Total Liabilities	2.99B	2.50B	1.78B	1.74B	1.70B	1.84B
Stockholders Equity	1.42B	1.32B	871.02M	860.69M	891.44M	935.56M
Cash Flow
Free Cash Flow	19.31M	70.56M	11.55M	-36.42M	139.51M	194.98M
Operating Cash Flow	531.97M	429.59M	310.19M	203.45M	237.40M	335.28M
Investing Cash Flow	-647.78M	-1.16B	-232.49M	-130.92M	16.11M	-85.03M
Financing Cash Flow	116.14M	733.55M	-77.92M	-72.54M	-253.03M	-252.84M

Archrock Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROC, the sentiment is Positive. The current price of 26.06 is above the 20-day moving average (MA) of 25.89, above the 50-day MA of 25.00, and above the 200-day MA of 24.30, indicating a bullish trend. The MACD of 0.32 indicates Positive momentum. The RSI at 55.74 is Neutral, neither overbought nor oversold. The STOCH value of 19.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AROC.

Archrock Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NGS	78 Outperform	$432.25M	23.25	7.15%	0.63%	9.53%	15.48%
AROC	78 Outperform	$4.57B	17.13	19.33%	3.08%	31.94%	64.74%
VAL	76 Outperform	$3.71B	9.50	17.49%	―	6.81%	-61.94%
NOV	72 Outperform	$6.41B	17.51	5.93%	3.24%	-1.43%	-63.13%
USAC	70 Outperform	$3.07B	31.24	―	9.11%	6.66%	43.66%
KGS	68 Neutral	$3.12B	46.11	5.86%	4.86%	19.43%	164.71%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Archrock Corporate Events

Archrock Prices Upsized 2034 Senior Notes Private Offering

On December 15, 2025, Archrock announced that its subsidiaries Archrock Services, L.P. and Archrock Partners Finance Corp. had priced an upsized $800 million private offering of 6.000% senior notes due 2034 at par, with the transaction documented in a purchase agreement signed on January 6, 2026 and expected to close on or about January 21, 2026, subject to customary conditions. The notes, to be sold to qualified institutional buyers under Rule 144A and to non-U.S. investors under Regulation S, are expected to generate roughly $789 million in net proceeds, which Archrock intends to use primarily to repay borrowings under its revolving credit facility, a move that should reduce reliance on bank debt, potentially lower funding risk, and modestly reshape the company’s capital structure while imposing a 90-day restriction on new debt offerings without underwriter consent.

The most recent analyst rating on (AROC) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on Archrock stock, see the AROC Stock Forecast page.

Archrock Announces $500 Million Senior Notes Private Offering

On January 6, 2026, Archrock, Inc. announced that its wholly owned subsidiary Archrock Services, L.P., together with Archrock Partners Finance Corp. as co-issuer, plans to launch a private offering of $500 million in senior notes due 2034 to eligible institutional and non-U.S. investors. Archrock intends to use the net proceeds to repay a portion of the outstanding borrowings under its revolving credit facility, a move that would restructure part of its debt profile and potentially lower funding costs, thereby strengthening the company’s balance sheet and financial flexibility within the U.S. natural gas compression sector.

The most recent analyst rating on (AROC) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Archrock stock, see the AROC Stock Forecast page.

Archrock Shifts to Online Platform for Updates

On November 12, 2025, Archrock, Inc. released an investor presentation on its website, indicating a shift towards using its online platform for future updates, potentially impacting how investors access company information.

The most recent analyst rating on (AROC) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on Archrock stock, see the AROC Stock Forecast page.

Archrock Plans Redemption of Senior Notes

On October 9, 2025, Archrock Inc. announced that its subsidiary, Archrock Partners, L.P., plans to redeem all $300 million of its outstanding 6.875% senior notes due in 2027. The redemption is scheduled for November 17, 2025, and will be executed at the principal amount plus accrued interest. This move may impact Archrock’s financial structure and stakeholder interests.

The most recent analyst rating on (AROC) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on Archrock stock, see the AROC Stock Forecast page.