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Archrock
(NYSE:AROC)
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Rating:76Outperform
Price Target:
$42.00
▲(15.70% Upside)
Action:Reiterated
Date:06/26/26
The score is driven primarily by improving financial performance (material margin and cash-flow strengthening) and solid technical momentum (price above key moving averages with positive MACD). Valuation is fair rather than cheap (P/E ~21), while the latest earnings call reinforced confidence through reaffirmed guidance, high utilization, and strong dividend coverage; recent debt streamlining and the CFO transition are additional, smaller positives.
Positive Factors
Improved cash generation
Material improvement in operating cash flow and FCF is a durable strength: higher cash conversion funds maintenance and growth capex, supports dividends and buybacks, and increases capacity to deleverage. Sustained FCF reduces refinancing risk and improves capital allocation over multiple years.
Negative Factors
Leverage remains a constraint
Although improving, meaningful leverage constrains flexibility in a cyclical midstream business. High leverage limits room for opportunistic M&A, requires prioritized cash allocation to debt service in downturns, and raises sensitivity to commodity-driven cash flow swings over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved cash generation
Material improvement in operating cash flow and FCF is a durable strength: higher cash conversion funds maintenance and growth capex, supports dividends and buybacks, and increases capacity to deleverage. Sustained FCF reduces refinancing risk and improves capital allocation over multiple years.
Read all positive factors
Archrock (AROC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.45B
Dividend Yield3.08%
Average Volume (3M)1.78M
Price to Earnings (P/E)20.0
Beta (1Y)0.87
Revenue Growth22.66%
EPS Growth55.80%
CountryUS
Employees1,350
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)1.84
Shares Outstanding175,261,600
10 Day Avg. Volume1,641,092
30 Day Avg. Volume1,784,512
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 Cap1.33
Enterprise Value/Revenue5.67
Enterprise Value/Gross Profit9.92
Enterprise Value/Ebitda9.81
Forecast
1Y Price Target
$43.63Price Target Upside20.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1.89
Revenue Forecast (FY)$1.56B
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 and related equipment and support to oil and gas producers and midstream pipeline/operators. The core revenue stream is contract-based compression services, where Archroc...
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 | 877.04M | 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
Negative
36.30
Price Trends
37.10
Negative
35.98
Positive
30.60
Positive
Market Momentum
0.89
Negative
46.45
Neutral
45.98
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 36.3 is below the 20-day moving average (MA) of 37.39, below the 50-day MA of 37.10, and above the 200-day MA of 30.60, indicating a neutral trend. The MACD of 0.89 indicates Negative momentum. The RSI at 46.45 is Neutral, neither overbought nor oversold. The STOCH value of 45.98 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.45B | 19.99 | 22.28% | 3.08% | 22.66% | 55.80% | |
72 Outperform | $6.86B | 87.10 | 5.47% | 4.86% | 3.99% | 38.62% | |
68 Neutral | $3.63B | 27.70 | 651.13% | 9.11% | 12.18% | 45.56% | |
67 Neutral | $530.39M | 24.26 | 7.99% | 0.63% | 11.28% | 27.38% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | $5.22B | 5.25 | 36.16% | ― | -9.95% | 233.69% | |
58 Neutral | $6.47B | 75.08 | 1.45% | 3.24% | -1.33% | -84.10% |
* Energy Sector Average
AROC
Archrock
36.79
13.55
58.28%
NOV
NOV
18.02
5.59
44.98%
NGS
Natural Gas Services Group
39.46
15.23
62.83%
USAC
USA Compression
26.36
3.86
17.15%
VAL
Valaris
75.35
28.66
61.38%
KGS
Kodiak Gas Services, Inc.
67.94
36.61
116.86%
Archrock Corporate Events
Business Operations and StrategyExecutive/Board Changes
Archrock Names Mohit Singh as New Chief Financial Officer
Positive
Jun 25, 2026
On June 24, 2026, Archrock, Inc. announced that veteran energy executive Mohit Singh will become Senior Vice President and Chief Financial Officer effective July 6, 2026, succeeding retiring CFO Douglas S. Aron. Singh, a former CFO of Chesapeake E...
Business Operations and StrategyRegulatory Filings and Compliance
Archrock Highlights Updated Web-Based Investor Disclosure Practices
Neutral
May 11, 2026
On May 11, 2026, Archrock, Inc. published an investor presentation and made it available on its corporate website under the investor relations section, indicating that this online channel will serve as a primary means for distributing such materia...
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.