Archrock, Inc. (AROC)
NYSE:AROC
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Archrock
(NYSE:AROC)
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Rating:76Outperform
Price Target:
$44.00
▲(21.21% Upside)
Action:ReiteratedDate:04/02/26
The score is driven primarily by strong financial performance (improving profitability and robust operating cash flow) and supportive earnings call takeaways (constructive 2026 guidance, contracted backlog, and improving leverage). Valuation is also favorable with a low P/E and moderate yield. Technicals are the main offset, reflecting mixed near-term momentum despite a broader uptrend.
Positive Factors
Strong operating cash generation
Archrock’s operating cash flow strengthened materially over 2022–2024, exceeding net income by roughly 2.0–2.3x. That persistent cash generation underpins durable funding for growth CapEx, maintenance needs, dividends and buybacks, reducing reliance on external financing in a capital-intensive business.
Negative Factors
Elevated historical leverage
Leverage has been a persistent constraint for Archrock; although management is improving the profile (2.7x leverage target) and executing redemptions, elevated debt in a cyclical oil & gas services market raises refinancing and interest-cost risk, limiting flexibility during downcycles.
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Positive Factors
Negative Factors
Strong operating cash generation
Archrock’s operating cash flow strengthened materially over 2022–2024, exceeding net income by roughly 2.0–2.3x. That persistent cash generation underpins durable funding for growth CapEx, maintenance needs, dividends and buybacks, reducing reliance on external financing in a capital-intensive business.
Read all positive factors
Archrock (AROC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.79B
Dividend Yield3.08%
Average Volume (3M)1.55M
Price to Earnings (P/E)9.7
Beta (1Y)1.03
Revenue Growth28.70%
EPS Growth75.49%
CountryUS
Employees1,300
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.67
Shares Outstanding175,247,820
10 Day Avg. Volume1,408,666
30 Day Avg. Volume1,553,490
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 Cap1.34
Enterprise Value/Revenue6.09
Enterprise Value/Gross Profit9.96
Enterprise Value/Ebitda10.63
Forecast
1Y Price Target
$39.88Price Target Upside9.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.98
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. 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:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call communicated strong operational and financial execution in 2025 — including substantial earnings growth, high contract margins, sustained >95% utilization, disciplined capital allocation, and a healthier leverage profile — while transparently noting discrete items that affect comparability, asset sales that reduce near-term EBITDA, extended supply-chain lead times and elevated maintenance CapEx. Management provided constructive 2026 guidance, a contracted backlog, and continued focus on returns, suggesting confidence in durable demand. The positive operating and financial momentum materially outweighs the identified, manageable challenges.Positive Updates
Strong Earnings Growth
Adjusted EPS increased 68% year-over-year and adjusted EBITDA increased 51% year-over-year. Q4 adjusted EBITDA was $269 million and full-year 2025 adjusted EBITDA was $901 million (or $846 million excluding certain discrete items). Net income was $117 million in Q4 and $322 million for the full year.
Negative Updates
Discrete Items and Comparability Noise
2025 results included discrete benefits that impacted comparability: $23 million of prior‑period sales/use tax settlements and credits and $32 million of net gains on asset sales. Management notes these items create a ~$98 million impact when comparing 2025 to 2026 adjusted EBITDA and make year-over-year comparisons noisier.
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Q4-2025 Updates
Positive
Negative
Strong Earnings Growth
Adjusted EPS increased 68% year-over-year and adjusted EBITDA increased 51% year-over-year. Q4 adjusted EBITDA was $269 million and full-year 2025 adjusted EBITDA was $901 million (or $846 million excluding certain discrete items). Net income was $117 million in Q4 and $322 million for the full year.
Read all positive updates
Company Guidance
Archrock guided 2026 to adjusted EBITDA of $865–$915 million (midpoint $890M), total CapEx of $400–$445 million comprising growth CapEx $250–$275 million (expected to add ~170,000 HP with ~60% of that starting up in H1), maintenance CapEx $125–$135 million and other CapEx $25–$35 million, with CapEx funded by operations (and potential modest support from nonstrategic asset sales); management expects to operate below 3.0x leverage (year‑end 2025 leverage 2.7x), exited 2025 with $2.4B total debt and $579M liquidity (pro forma >$1.3B after an $800M bond), an 85%‑contracted backlog (with 2027 bookings already), continued capital returns (Q4 dividend up to $0.22/share or $0.88 annualized with 4.9x quarterly coverage and $117.7M remaining repurchase authorization), and called out a $98M year‑over‑year bridge impact (including $47M of 2025 asset‑sale gains and ~ $33M of tax settlements), of which about $18M reduces 2026 EBITDA—while highlighting strong segment profitability (contract operations adjusted gross margin ~78% / underlying operating profitability ~71.5%; Aftermarket Services gross margin ~24%).Archrock Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.49B | 1.16B | 990.34M | 845.57M | 781.46M |
| Gross Profit | 723.63M | 699.09M | 541.32M | 426.08M | 422.54M |
| EBITDA | 850.41M | 559.97M | 424.68M | 308.90M | 315.38M |
| Net Income | 322.29M | 172.23M | 105.00M | 44.30M | 28.22M |
Balance Sheet | |||||
| Total Assets | 4.35B | 3.82B | 2.66B | 2.60B | 2.59B |
| Cash, Cash Equivalents and Short-Term Investments | 1.55M | 4.42M | 1.34M | 1.57M | 1.57M |
| Total Debt | 2.42B | 2.21B | 1.60B | 1.56B | 1.55B |
| Total Liabilities | 2.86B | 2.50B | 1.78B | 1.74B | 1.70B |
| Stockholders Equity | 1.49B | 1.32B | 871.02M | 860.69M | 891.44M |
Cash Flow | |||||
| Free Cash Flow | 119.64M | 70.56M | 11.55M | -36.42M | 139.51M |
| Operating Cash Flow | 622.11M | 429.59M | 310.19M | 203.45M | 237.40M |
| Investing Cash Flow | -606.90M | -1.16B | -232.49M | -130.92M | 16.11M |
| Financing Cash Flow | -18.07M | 733.55M | -77.92M | -72.54M | -253.03M |
Archrock Technical Analysis
Positive
36.30
Price Trends
34.89
Positive
30.45
Positive
27.19
Positive
Market Momentum
0.43
Negative
58.40
Neutral
74.01
Neutral
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 36.3 is above the 20-day moving average (MA) of 35.73, above the 50-day MA of 34.89, and above the 200-day MA of 27.19, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 58.40 is Neutral, neither overbought nor oversold. The STOCH value of 74.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $6.79B | 9.70 | 22.73% | 3.08% | 28.70% | 75.49% | |
76 Outperform | $7.06B | 3.62 | 38.72% | ― | 0.27% | 171.02% | |
74 Outperform | $5.99B | 40.03 | 6.27% | 4.86% | 12.83% | 50.71% | |
70 Outperform | $512.30M | 21.17 | 7.43% | 0.63% | 9.94% | 14.68% | |
69 Neutral | $3.98B | 24.95 | -178.66% | 9.11% | 5.01% | 17.39% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
59 Neutral | $7.34B | 84.88 | 1.43% | 3.24% | -1.33% | -84.10% |
* Energy Sector Average
AROC
Archrock
39.02
15.24
64.09%
NOV
NOV
19.86
8.06
68.33%
NGS
Natural Gas Services Group
41.29
22.43
118.96%
USAC
USA Compression
27.75
4.82
21.05%
VAL
Valaris
102.23
66.27
184.29%
KGS
Kodiak Gas Services, Inc.
68.54
34.59
101.90%
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.