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Usa Compression (USAC)
NYSE:USAC
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USA Compression
(NYSE:USAC)
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Rating:61Neutral
Price Target:
$25.00
â–²(4.12% Upside)
The overall score reflects strong earnings call performance and robust revenue growth, offset by high leverage and valuation concerns. The company's strategic initiatives and high dividend yield are positives, but financial risks and technical indicators suggest caution.
Positive Factors
Revenue Growth
Record revenues indicate strong demand and effective pricing strategies, supporting long-term growth and market position.
Operational Efficiency
The shared services model enhances operational efficiency, reducing costs and improving margins, which strengthens competitive advantage.
Market Demand
Increased contracted horsepower reflects strong market demand, ensuring stable revenue streams and supporting future expansion.
Negative Factors
High Leverage
High leverage poses financial risks, limiting flexibility and increasing vulnerability to economic downturns, impacting long-term stability.
Increased Operating Expenses
Rising operating expenses can erode profit margins, challenging cost management and potentially affecting future profitability.
Negative Equity
Negative equity indicates financial instability, requiring improvement in capital structure to enhance resilience and investor confidence.
USA Compression (USAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.80B
Dividend Yield8.75%
Average Volume (3M)248.17K
Price to Earnings (P/E)34.3
Beta (1Y)0.56
Revenue Growth8.22%
EPS Growth28.05%
CountryUS
Employees854
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.22
Shares Outstanding122,683,945
10 Day Avg. Volume476,045
30 Day Avg. Volume248,170
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.96
Enterprise Value/Revenue5.60
Enterprise Value/Gross Profit14.60
Enterprise Value/Ebitda9.68
Forecast
1Y Price Target
$26.17Price Target Upside9.00% Upside
Rating ConsensusHold
Number of Analyst Covering6
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 the rental and sale of its compression equipment. The company offers long-term and short-term rental agreements to oil and gas producers, which provides a steady stream of income. Additionally, USAC earns revenue from maintenance and service contracts associated with its equipment, ensuring optimal performance for its clients. Key revenue streams include fees from leasing compression units, particularly in high-demand areas, and the provision of specialized services tailored to customer needs. Strategic partnerships with major energy producers and operators enhance USAC's market position and contribute significantly to its earnings, as these collaborations often lead to long-term contracts and recurring revenue.
USA Compression Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong revenue growth and operational improvements, especially in pricing and contracted horsepower, but faced challenges with increased operating expenses and labor costs. The strategic partnerships and awards reflect positively on the company's future prospects.Q2-2025 Updates
Positive Updates
Record-Setting Quarter for Revenues
USA Compression reported a record-setting quarter for revenues and average revenue per horsepower, maintaining consistent margins and utilization despite bearish macroeconomic conditions.
Growth in Contracted Horsepower
Contracted horsepower in the Northeast is expected to be 5% higher in Q4 compared to current levels, indicating strong demand and growth potential.
Increase in Pricing
Pricing improvements were seen, with an all-time high average of $21.31 per horsepower in Q2, a 1% sequential increase and a 5% increase compared to the previous year.
Operational Efficiency and Cost Management
Operational benefits from the shared services model with Energy Transfer, including licensing savings and enhanced functionality, were noted. Significant savings in lube oil costs are anticipated due to a new vendor agreement.
Safety and Operational Excellence Award
Employees in the Rockies received a Safety and Operational Excellence award from one of the top 10 customers, showcasing strong employee performance and recognition.
Negative Updates
Increased Operating Expenses
Despite solid price increases, increased operating expenses, particularly in labor due to overtime and contract labor, offset some of the gains in gross margins.
Slight Decline in Average Total Active Horsepower
Average total active horsepower was down slightly on a sequential quarter basis, though large horsepower remained nearly fully utilized.
Potential Inventory Impacts from Tariffs
Tariffs have had minimal impacts so far, but potential inventory impacts from tariffs are not expected until next year at the earliest.
Labor Cost Challenges
Labor costs increased in the quarter due to overtime and contract labor, with expectations of reduction as internal hires are made.
Company Guidance
During the second quarter of 2025, USA Compression Partners provided a robust outlook and guidance, reflecting significant optimism for the remainder of the year and into 2026. The company reported record revenues and an average revenue per horsepower, achieving $21.31 per horsepower, marking a 1% increase from the previous quarter and a 5% increase year-over-year. Despite macroeconomic challenges, the company maintained a strong utilization rate of 94.4%, with a total fleet horsepower of approximately 3.9 million. Operationally, USA Compression Partners acquired 48,000 new horsepower in 2025, with expectations of delivering 10,000 horsepower online by January 2026. The company also maintained its adjusted EBITDA guidance in the range of $590 million to $610 million and a distributable cash flow range of $350 million to $370 million for the year. Expansion capital expenditures are projected between $120 million and $140 million, with maintenance capital between $38 million and $42 million. The company anticipates its leverage ratio to marginally increase later in the year to support new growth projects, with a target leverage ratio at or below 4x debt to EBITDA. The positive financial performance was complemented by strategic initiatives, including a shared services model with Energy Transfer, expected to generate a $5 million annualized savings, and operational improvements in parts and labor costs, contributing to a stable gross margin of 65.4%.USA Compression Financial Statement Overview
Summary
USA Compression shows strong revenue and profitability recovery, with improved cash flow generation. However, negative equity and high leverage present risks that need addressing for long-term stability.Income Statement
The income statement shows a strong recovery with a consistent increase in revenue from $632.6M in 2021 to $966.4M in TTM 2025. The gross profit margin improved to 38.8% in TTM 2025, indicating effective cost management. The net profit margin also increased to 10%, reflecting enhanced profitability. However, the EBIT margin of 30.8% and EBITDA margin of 48.3% suggest room for further efficiency improvements.75
Positive
Balance Sheet
The balance sheet reveals a concerning negative stockholders' equity of -$11.9M in TTM 2025, indicating potential financial instability. The debt-to-equity ratio is not meaningful due to negative equity, highlighting high leverage. Despite this, the company has managed to maintain a substantial asset base of $2.7B, suggesting potential for future recovery if debt levels are managed.40
Negative
Cash Flow
Cash flow analysis shows a strong operating cash flow of $330M in TTM 2025, supporting the company's operations. Free cash flow has grown significantly to $205.5M, indicating improved cash generation capabilities. The operating cash flow to net income ratio is robust, suggesting efficient conversion of income into cash. However, the high capital expenditures could pose a risk if not managed carefully.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 981.22M | 950.45M | 846.18M | 704.60M | 632.64M | 667.68M |
| Gross Profit | 376.18M | 372.97M | 315.37M | 233.59M | 199.49M | 222.78M |
| EBITDA | 567.50M | 560.03M | 485.65M | 406.06M | 379.85M | -225.40M |
| Net Income | 93.83M | 99.58M | 68.27M | 30.32M | 10.28M | -594.73M |
Balance Sheet | ||||||
| Total Assets | 2.67B | 2.75B | 2.74B | 2.67B | 2.77B | 2.95B |
| Cash, Cash Equivalents and Short-Term Investments | 2.00K | 14.00K | 11.00K | 35.00K | -18.55M | 2.00K |
| Total Debt | 2.52B | 2.51B | 2.35B | 2.12B | 1.99B | 1.95B |
| Total Liabilities | 2.72B | 2.72B | 2.55B | 2.78B | 2.77B | 2.13B |
| Stockholders Equity | -48.01M | 27.76M | 183.05M | -116.30M | 578.42M | 814.96M |
Cash Flow | ||||||
| Free Cash Flow | 281.50M | 136.48M | 33.36M | 126.37M | 220.21M | 184.13M |
| Operating Cash Flow | 357.57M | 341.33M | 271.88M | 260.59M | 265.43M | 293.20M |
| Investing Cash Flow | -95.69M | -202.01M | -232.65M | -129.94M | -39.19M | -105.10M |
| Financing Cash Flow | -261.88M | -139.32M | -39.26M | -130.61M | -226.24M | -188.11M |
USA Compression Technical Analysis
Positive
24.01
Price Trends
23.88
Positive
24.06
Negative
24.17
Negative
Market Momentum
-0.07
Negative
52.46
Neutral
47.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USAC, the sentiment is Positive. The current price of 24.01 is above the 20-day moving average (MA) of 23.74, above the 50-day MA of 23.88, and below the 200-day MA of 24.17, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 52.46 is Neutral, neither overbought nor oversold. The STOCH value of 47.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for USAC.
USA Compression Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | 353.82M | 19.81 | 6.73% | 0.35% | 14.77% | 34.74% | |
76 Outperform | 4.52B | 19.46 | 16.44% | 2.89% | 28.22% | 49.17% | |
67 Neutral | 2.03B | 9.62 | 10.65% | 2.59% | -9.32% | -48.26% | |
67 Neutral | 3.08B | 39.90 | 6.24% | 4.63% | 31.01% | 39.51% | |
61 Neutral | $2.80B | 34.34 | 314.74% | 8.75% | 8.22% | 28.05% | |
61 Neutral | 2.53B | 63.27 | 5.65% | 1.26% | 62.66% | -8.07% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
Performance Comparison
USAC
USA Compression
24.01
3.31
15.99%
AROC
Archrock
26.51
6.77
34.30%
NGS
Natural Gas Services Group
28.42
9.17
47.64%
SEI
Solaris Energy Infrastructure
38.20
25.73
206.34%
LBRT
Liberty Oilfield Services
12.37
-6.16
-33.24%
KGS
Kodiak Gas Services, Inc.
37.13
9.30
33.42%
USA Compression Corporate Events
Business Operations and Strategy
USA Compression to Attend Barclays Energy Conference
Neutral
Aug 28, 2025
USA Compression Partners, LP announced its participation in the Barclays 39th Annual Energy-Power Conference on September 3. The senior management will engage with the investment community, sharing insights and presentation materials on their website, potentially impacting investor relations and market perception.
The most recent analyst rating on (USAC) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on USA Compression stock, see the USAC Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
USA Compression Amends Credit Agreement for Flexibility
Positive
Aug 27, 2025
On August 27, 2025, USA Compression Partners, LP amended and restated its credit agreement, now maturing on August 27, 2030, with specific conditions that could lead to earlier maturity dates in 2027 or 2028. The agreement includes a $1.75 billion asset-based revolving credit facility, secured by the company’s assets and guaranteed by its subsidiaries, allowing for increased financial flexibility and potential expansion of commitments by $300 million. This strategic financial move is designed to support the company’s operational needs, refinance existing debt, and enhance its market positioning.
The most recent analyst rating on (USAC) stock is a Hold with a $25.00 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 Citi Natural Resources Conference
Neutral
Aug 7, 2025
On August 12, members of USA Compression‘s senior management attended the Citi Natural Resources Conference, engaging with the investment community. Presentation materials from these meetings were made available on the company’s website, reflecting USA Compression’s ongoing 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.