Archrock, Inc. (AROC)
NYSE:AROC
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Archrock
(NYSE:AROC)
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Rating:73Outperform
Price Target:
$41.00
▲(12.95% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by improving financial performance (strong profitability and much better cash generation) and a positive earnings-call read-through (reaffirmed guidance, high utilization, and strong free cash flow/dividend coverage). Technicals are supportive but not strongly bullish, while valuation appears reasonable rather than compelling at a ~20.5 P/E with a ~2.25% yield.
Positive Factors
Multi-year fixed-fee contracts & aftermarket services
Archrock's core business is recurring, contract-based compression fees plus a diverse aftermarket services stream. Fixed-fee contracts reduce commodity sensitivity and create predictable, durable cash flows while aftermarket parts/maintenance provide high-return, sticky revenue that supports margin resilience and customer lock-in over multiple years.
Negative Factors
Leverage remains a structural constraint
Although leverage has improved, meaningful indebtedness persists and limits flexibility in a cyclical energy-services market. Elevated leverage constrains the pace of newbuild financing, raises refinancing risk if conditions tighten, and reduces bandwidth to absorb prolonged demand shocks despite improving returns and equity growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Multi-year fixed-fee contracts & aftermarket services
Archrock's core business is recurring, contract-based compression fees plus a diverse aftermarket services stream. Fixed-fee contracts reduce commodity sensitivity and create predictable, durable cash flows while aftermarket parts/maintenance provide high-return, sticky revenue that supports margin resilience and customer lock-in over multiple years.
Read all positive factors
Archrock (AROC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.53B
Dividend Yield3.08%
Average Volume (3M)1.61M
Price to Earnings (P/E)20.5
Beta (1Y)1.00
Revenue Growth22.66%
EPS Growth55.80%
CountryUS
Employees1,300
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)1.84
Shares Outstanding175,261,600
10 Day Avg. Volume1,784,558
30 Day Avg. Volume1,605,170
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 Cap1.37
Enterprise Value/Revenue5.88
Enterprise Value/Gross Profit10.28
Enterprise Value/Ebitda10.21
Forecast
1Y Price Target
$41.38Price Target Upside13.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.92
Revenue Forecast (FY)$1.57B
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, i...
How the Company Makes Money
Archrock primarily makes money by providing natural gas compression as a service under multi-year, fixed-fee contracts. Under these arrangements, Archrock installs its compression units at customer sites, operates and maintains the equipment, and ...
Archrock Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call emphasized multiple strong operational and financial metrics — double-digit EBITDA growth year-over-year, robust free cash flow, high fleet utilization (~95%), disciplined capital allocation, a strong balance sheet with leverage below target, and reaffirmed full-year guidance — while acknowledging manageable near-term challenges including higher SG&A (largely non-recurring), seasonal aftermarket softness, higher maintenance capex timing, supply-chain lead times (~160 weeks), and potential lube oil cost pressure. Overall, positives (profitability, cash generation, utilization, balance sheet flexibility, and confirmed guidance) substantially outweigh the headwinds, which management characterizes as manageable and addressed through disciplined execution and capital allocation.Positive Updates
Strong Adjusted Earnings and EBITDA Growth
Adjusted EPS of $0.42 and adjusted EBITDA of $221 million for Q1 2026, representing a 12% increase in adjusted EBITDA versus Q1 2025.
Negative Updates
Increase in SG&A Expenses
SG&A rose to $45 million in Q1 2026 from $37 million in Q1 2025, primarily driven by higher long-term incentive compensation (partly due to a higher stock price and a GAAP-accelerated expense under an executive retention agreement); management expects the $3.7 million acceleration not to recur.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Adjusted Earnings and EBITDA Growth
Adjusted EPS of $0.42 and adjusted EBITDA of $221 million for Q1 2026, representing a 12% increase in adjusted EBITDA versus Q1 2025.
Read all positive updates
Company Guidance
Archrock reaffirmed full‑year 2026 adjusted EBITDA guidance of $865–$915 million and reiterated total 2026 capex of $400–$445 million (growth CapEx $250–$275M, maintenance $125–$135M, other $25–$35M). The company declared a quarterly dividend of $0.22 per share ($0.88 annualized) with Q1 cash available for dividend of $134M and dividend coverage of 3.5x, reported Q1 adjusted EBITDA of $221M and adjusted free cash flow of $92M (after‑dividend $52M), and said it expects substantial free cash flow supported by higher monthly revenue per horsepower and back‑half‑weighted newbuild deliveries. Archrock ended the quarter with ~4.5 million operating horsepower at 95% utilization, total debt of $2.4B (leverage 2.6x), pro‑forma liquidity of ~ $600M, $21M of year‑to‑date asset sale proceeds, $113M remaining on its share repurchase authorization, and does not expect the $3.7M LTIP expense acceleration to recur.Archrock Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
61
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.52B | 1.49B | 1.16B | 990.34M | 845.57M | 781.46M |
| Gross Profit | 867.10M | 723.63M | 699.09M | 541.32M | 426.08M | 422.54M |
| EBITDA | 872.79M | 850.41M | 559.97M | 424.68M | 308.90M | 315.38M |
| Net Income | 325.23M | 322.29M | 172.23M | 105.00M | 44.30M | 28.22M |
Balance Sheet | ||||||
| Total Assets | 4.39B | 4.35B | 3.82B | 2.66B | 2.60B | 2.59B |
| Cash, Cash Equivalents and Short-Term Investments | 4.46M | 1.55M | 4.42M | 1.34M | 1.57M | 1.57M |
| Total Debt | 2.39B | 2.42B | 2.21B | 1.60B | 1.56B | 1.55B |
| Total Liabilities | 2.87B | 2.86B | 2.50B | 1.78B | 1.74B | 1.70B |
| Stockholders Equity | 1.52B | 1.49B | 1.32B | 871.02M | 860.69M | 891.44M |
Cash Flow | ||||||
| Free Cash Flow | 244.52M | 119.64M | 70.56M | 11.55M | -36.42M | 139.51M |
| Operating Cash Flow | 692.33M | 622.11M | 429.59M | 310.19M | 203.45M | 237.40M |
| Investing Cash Flow | -536.82M | -606.90M | -1.16B | -232.49M | -130.92M | 16.11M |
| Financing Cash Flow | -155.89M | -18.07M | 733.55M | -77.92M | -72.54M | -253.03M |
Archrock Technical Analysis
Neutral
36.30
Price Trends
36.44
Positive
33.42
Positive
28.86
Positive
Market Momentum
0.28
Positive
50.84
Neutral
36.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AROC, the sentiment is Neutral. The current price of 36.3 is below the 20-day moving average (MA) of 37.75, below the 50-day MA of 36.44, and above the 200-day MA of 28.86, indicating a neutral trend. The MACD of 0.28 indicates Positive momentum. The RSI at 50.84 is Neutral, neither overbought nor oversold. The STOCH value of 36.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AROC.
Archrock Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $6.53B | 20.52 | 22.28% | 3.08% | 22.66% | 55.80% | |
72 Outperform | $535.56M | 17.56 | 7.99% | 0.63% | 11.28% | 27.38% | |
72 Outperform | $7.44B | 70.38 | 5.47% | 4.86% | 3.99% | 38.62% | |
68 Neutral | $4.22B | 25.24 | 651.13% | 9.11% | 12.18% | 45.56% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | $7.01B | -103.42 | 36.16% | ― | -9.95% | 233.69% | |
58 Neutral | $7.47B | 84.88 | 1.45% | 3.24% | -1.33% | -84.10% |
* Energy Sector Average
AROC
Archrock
37.25
13.21
54.95%
NOV
NOV
20.81
9.13
78.12%
NGS
Natural Gas Services Group
42.51
18.68
78.39%
USAC
USA Compression
29.09
6.12
26.64%
VAL
Valaris
101.17
62.84
163.94%
KGS
Kodiak Gas Services, Inc.
73.71
40.59
122.57%
Archrock Corporate Events
Business Operations and Strategy
Archrock Redeems $800 Million Senior Notes, Streamlines Debt
Positive
Apr 1, 2026
On April 1, 2026, Archrock Partners, L.P., a wholly owned unit of Archrock Inc., redeemed the entire $800 million aggregate principal amount of its outstanding 6.25% senior notes due 2028. The transaction retires a significant slice of the partner...
Executive/Board Changes
Archrock Announces Planned CFO Retirement and Leadership Transition
Neutral
Mar 26, 2026
On March 25, 2026, Archrock announced that Senior Vice President and Chief Financial Officer Douglas S. Aron has informed the company of his intention to retire by the end of 2026 or once a successor is appointed. The company has retained an execu...
Business Operations and Strategy
Archrock Announces Full Redemption of 2028 Senior Notes
Positive
Feb 26, 2026
On February 26, 2026, Archrock Inc. announced that its wholly owned subsidiary Archrock Partners, L.P. plans to redeem all $800 million of its outstanding 6.25% senior notes due 2028. The move affects notes co-issued by Archrock Partners Finance C...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Archrock Posts Strong Q4 2025 Results, Raises Dividend
Positive
Feb 25, 2026
Archrock reported strong fourth quarter and full-year 2025 results on February 24, 2026, with revenue rising to $377.1 million for the quarter and $1.49 billion for the year, alongside net income of $116.8 million for the quarter and $322.3 millio...
Business Operations and StrategyExecutive/Board Changes
Archrock Launches 2026 Executive Pay and Incentive Plan
Positive
Feb 24, 2026
On February 18, 2026, Archrock’s board compensation committee approved a new 2026 short-term incentive program that sets cash bonus targets for its named executive officers as a percentage of eligible earnings, ranging from 75% to 125%. Payo...
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.