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Usa Compression (USAC)
NYSE:USAC
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USA Compression
(NYSE:USAC)
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Rating:69Neutral
Price Target:
$29.00
▲(5.19% Upside)
Action:ReiteratedDate:02/26/26
The score is driven primarily by strong operating performance and cash generation, tempered by meaningful leverage/negative equity balance-sheet risk. Technicals are supportive with an established uptrend, while valuation is mixed due to a high dividend yield offset by an elevated P/E. Earnings call guidance was positive but included notable execution and capex risks tied to the JW acquisition.
Positive Factors
Cash generation quality
Consistently positive operating cash flow and free cash flow across years indicate durable cash conversion. Cash from operations exceeds net income, supporting higher maintenance/expansion capex, distributions, and debt paydown capacity, which strengthens long-term financial resilience.
High utilization & fleet scale
Very high utilization and a multi-million horsepower fleet create a recurring, contract-backed revenue base that reduces revenue volatility. Scale across basins enhances pricing power, service density, and customer stickiness, supporting sustainable margins and competitive positioning over time.
Strategic acquisition expands scale
The JW deal materially increases active horsepower and geographic diversification, adding manufacturing optionality and pro forma EBITDA/DC F uplift. This structural expansion can deepen customer relationships, improve regional coverage, and create scale synergies that strengthen long-term growth potential.
Negative Factors
Elevated leverage / negative equity
Negative equity in 2025 and historically high leverage constrain financial flexibility and increase refinancing and covenant sensitivity. Material interest expense and reliance on credit markets mean adverse rate moves or capital-market stress could limit investment capacity and raise long-term funding risk.
Lengthening equipment lead times
Equipment lead times >120 weeks create structural execution risk for expansion and replacement plans. Long supplier queues raise capex timing uncertainty, push out revenue realization from new horsepower, and expose the firm to equipment cost inflation and scheduling bottlenecks over multiple years.
Idle horsepower & integration risk
A large pool of acquired idle horsepower requires assessment, refurbishment, or monetization, creating capital allocation uncertainty. Integration, ERP changes and multi-quarter margin alignment raise execution risk and can dilute near-term profitability and cash flow until assets are rationalized or reactivated.
USA Compression (USAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.91B
Dividend Yield9.11%
Average Volume (3M)204.91K
Price to Earnings (P/E)31.7
Beta (1Y)0.63
Revenue Growth6.66%
EPS Growth43.66%
CountryUS
Employees854
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.22
Shares Outstanding144,972,350
10 Day Avg. Volume164,202
30 Day Avg. Volume204,910
Financial Highlights & Ratios
PEG Ratio1.38
Price to Book (P/B)-24.69
Price to Sales (P/S)2.78
P/FCF Ratio10.03
Enterprise Value/Market Cap1.50
Enterprise Value/Revenue5.88
Enterprise Value/Gross Profit9.84
Enterprise Value/Ebitda9.68
Forecast
1Y Price Target
$27.50Price Target Upside-0.25% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)1.42
Revenue Forecast (FY)$1.24B
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 of its compression equipment and services. The company operates a large fleet of compression units, which are leased to customers under long-term contracts, providing a steady stream of income. Key revenue streams include the rental fees for equipment, maintenance services, and additional products associated with compression services. USAC also benefits from its strategic partnerships with major oil and gas producers, enhancing its market presence and securing long-term contracts. Additionally, the company may experience revenue growth through expansions in its service offerings or by entering new geographical markets, leveraging the increasing demand for natural gas infrastructure.
USA Compression Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational and financial performance in 2025 — record adjusted EBITDA and DCF, high utilization (>94%), all-time high pricing, and improved liquidity — while outlining an accretive strategic acquisition (JW Power) that expands scale, geographic reach, and manufacturing optionality. Key challenges were clearly acknowledged: prolonged equipment lead times (>120 weeks) and possible equipment price inflation, near-term margin dilution from the acquired assets, integration and one-time costs, significant idle horsepower to evaluate, and a material near-term increase in capex to support growth. Management provided explicit guidance and targets (pro forma 2026 adjusted EBITDA $770M–$800M; DCF $480M–$510M; $10M–$20M run-rate synergies by 2027) and reaffirmed steps to improve leverage and liquidity.Q4-2025 Updates
Positive Updates
Record Financial Performance
Full-year adjusted EBITDA of $613,800,000 and distributable cash flow (DCF) of $385,700,000, both company records; Q4 net income of $27.8M, operating income of $76.6M, and net cash provided by operating activities of $139.5M. DCF finished above recently increased guidance.
Strong Utilization and Fleet Scale
Maintained average utilization in excess of 94% throughout 2025, ending the year at 94.5%. Average active horsepower ~3,579,000 and total fleet ~3,900,000 HP (added ~21,000 HP QoQ). 2026 budget includes ~105,000 new HP (~2% increase in active horsepower) with ~50% already contracted.
Pricing and Margin Strength
Q4 pricing reached an all-time high of $21.69 per horsepower (+1% sequential, +4% year-over-year). Fourth quarter adjusted gross margins were 66.8%, in line with historical trend.
Balance Sheet and Liquidity Improvements
Refinanced ABL and a senior note, materially reducing weighted average borrowing cost (borrowing costs improved by ~50 basis points versus prior structure). End-of-Q4 leverage was 4.0x with a near-term target of 3.75x. Available liquidity includes roughly $0.5B ABL capacity plus a $300M accordion.
Strategic JW Power Acquisition and Pro Forma Guidance
Closed JW Power acquisition (Jan 12), expanding geographic footprint and horsepower (Permian active HP increased to ~1,700,000). Pro forma 2026 guidance including JW: adjusted EBITDA $770M–$800M and DCF $480M–$510M. Management expects $10M–$20M of annual run-rate synergies by 2027.
Operational and Technology Investments
2026 expanded capital plan includes $230M–$250M expansion capex (includes just over 100,000 new HP) and $60M–$70M maintenance capex to support consistent preventative maintenance. Plan includes telemetry/panel upgrades and other investments (~$40M) to improve operational visibility and efficiency.
Favorable Gas Fundamentals
Natural gas prices averaged $3.52/MMBtu in 2025, a 56% increase year-over-year, and overall natural gas activity returned to growth (natural gas up ~9% YoY), supporting demand in major gas basins (Marcellus, Utica, Haynesville).
Negative Updates
Lengthening Lead Times and Equipment Supply Risk
Lead times for new equipment have increased to over 120 weeks (over two years), primarily driven by engine (Caterpillar) demand for distributed generation. Management expects potential equipment price increases later in the year, creating planning and cost risk for 2027 and beyond.
Near-Term Margin Dilution from JW Assets
Management noted the addition of JW assets will reduce aggregate gross margins for the contract compression business in the near term, with a multi-quarter (up to two-year) effort required to align margins and capture targeted synergies.
Idle Horsepower Integration Challenge
JW acquisition included approximately 200,000 idle horsepower; only ~50,000 HP (~25%) is considered readily deployable with limited capital spend. The remainder requires significant review and potential monetization, representing an operational and capital allocation challenge.
Permian Slowdown and Macro Uncertainty
Permian development pace slowed during 2025 as rigs reduced in response to lower oil prices; oil production flattened in the second half of the year. These macro factors could constrain near-term Permian growth despite longer-term bullish view.
Leverage and Interest Expense Remain Material
End-of-Q4 leverage stood at 4.0x with net cash interest expense of $43.4M. While improvements are targeted (3.75x near-term goal), leverage and interest costs remain meaningful and sensitive to capital markets and policy rates.
Integration and One-Time Execution Costs
Management expects modest one-time integration and ERP implementation costs in 2026 (new ERP go-live, headquarters move, shared services changes). Execution risk exists as the company integrates two organizations and installs new systems.
Higher CapEx Requirement to Support Growth
Expansion capex guidance for 2026 ($230M–$250M) is materially higher than 2025 expansion spend ($117.6M), roughly a ~96%–113% increase, and maintenance capex guidance ($60M–$70M) is up from $39.4M in 2025 (~52%–78% increase). Higher near-term capex raises funding and execution demands.
Company Guidance
For 2026, including the full-year contribution from the JW acquisition, management guided adjusted EBITDA of $770–800 million and distributable cash flow (DCF) of $480–510 million, with maintenance capital expenditure of $60–70 million and expansion capital of $230–250 million (which includes just over 100,000–105,000 new horsepower — ~2% growth of the active fleet — with ~50% already contracted, plus roughly $40 million of other capital for vehicles, tools and technology); they expect near‑term leverage to improve to ~3.75x debt/EBITDA (from 4.0x at Q4) — about a quarter‑turn improvement over 12 months — and forecast $10–20 million of annual run‑rate synergies by 2027, while noting ~200,000 idle horsepower acquired (≈50,000 readily deployable) and ~10,000 HP already contracted for 2027 manufacturing capacity; other relevant metrics cited on the call included Q4 pricing of $21.69/HP (+1% sequential, +4% YoY), average active horsepower ~3.579 million, total fleet ~3.9 million, average utilization 94.5%, 2025 adjusted EBITDA $613.8 million, 2025 DCF $385.7 million, TRIR 0.39, borrowing costs improved ~50 basis points, ABL capacity ~$500 million plus a $300 million accordion, and normalized distribution coverage of ~1.55x (targeting >1.6x next year).USA Compression Financial Statement Overview
Summary
Operating results and cash generation are strong (high and stable EBITDA margins, improving net margins, and consistently positive free cash flow with a surge in 2025). The key offset is balance-sheet risk: historically high leverage and negative equity in 2025, which reduces financial flexibility in a cyclical industry.Income Statement
Revenue has grown strongly from 2021 to 2025 (including a sharp step-up in 2025), and profitability has improved materially versus the 2020 loss year. Operating profitability is consistently robust (EBITDA margins around ~58–60% from 2020–2025), and net margins have expanded into the low double-digits by 2024–2025. Offsetting this, gross margin dropped sharply in 2025 versus 2021–2024, suggesting higher costs or mix pressure, and the company’s earnings history includes a major downturn in 2020, highlighting cyclical risk.74
Positive
Balance Sheet
Leverage is the key concern. Debt was very high relative to equity in 2023–2024, and in 2025 equity turned negative, which weakens financial flexibility and raises refinancing/credit sensitivity risk even though debt appears to drop sharply in 2025 in the provided data. Asset base is sizable, but the negative equity position and prior high leverage levels dominate the balance-sheet profile.32
Negative
Cash Flow
Cash generation is a clear strength. Operating cash flow has been consistently strong and improving (about $260M in 2021 to about $394M in 2025), and cash from operations exceeds net income each year shown, indicating solid cash earnings quality. Free cash flow is positive across all years, rebounding meaningfully in 2024 and surging in 2025, though it has shown volatility (notably weaker in 2023).81
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 998.10M | 950.45M | 846.18M | 704.60M | 632.64M |
| Gross Profit | 384.48M | 641.72M | 565.20M | 473.90M | 441.85M |
| EBITDA | 602.95M | 567.49M | 489.60M | 408.98M | 382.17M |
| Net Income | 111.32M | 99.58M | 68.27M | 30.32M | 10.28M |
Balance Sheet | |||||
| Total Assets | 2.62B | 2.75B | 2.74B | 2.67B | 2.77B |
| Cash, Cash Equivalents and Short-Term Investments | 8.56M | 14.00K | 11.00K | 35.00K | 0.00 |
| Total Debt | 2.55B | 2.52B | 2.35B | 2.13B | 2.00B |
| Total Liabilities | 2.73B | 2.72B | 2.55B | 2.30B | 2.19B |
| Stockholders Equity | -112.50M | 27.76M | 183.05M | 361.01M | 578.42M |
Cash Flow | |||||
| Free Cash Flow | 276.99M | 136.48M | 33.36M | 126.37M | 220.21M |
| Operating Cash Flow | 394.26M | 341.33M | 271.88M | 260.59M | 265.43M |
| Investing Cash Flow | -114.96M | -202.01M | -232.65M | -129.94M | -39.19M |
| Financing Cash Flow | -270.75M | -139.32M | -39.26M | -130.61M | -226.24M |
USA Compression Technical Analysis
Positive
27.57
Price Trends
24.77
Positive
23.81
Positive
23.43
Positive
Market Momentum
0.64
Negative
68.77
Neutral
84.66
Negative
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 27.57 is above the 20-day moving average (MA) of 26.35, above the 50-day MA of 24.77, and above the 200-day MA of 23.43, indicating a bullish trend. The MACD of 0.64 indicates Negative momentum. The RSI at 68.77 is Neutral, neither overbought nor oversold. The STOCH value of 84.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for USAC.
USA Compression Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.91B | 18.27 | 22.72% | 3.08% | 31.94% | 64.74% | |
74 Outperform | $478.00M | 25.71 | 7.15% | 0.63% | 9.53% | 15.48% | |
72 Outperform | $4.38B | 64.70 | 5.86% | 4.86% | 19.43% | 164.71% | |
69 Neutral | $3.91B | 31.71 | ― | 9.11% | 6.66% | 43.66% | |
66 Neutral | $4.58B | 31.58 | 7.29% | 1.78% | -12.05% | -46.45% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | $3.66B | 81.00 | ― | 1.07% | 92.33% | 116.22% |
* Energy Sector Average
USAC
USA Compression
27.57
2.72
10.96%
AROC
Archrock
35.03
9.26
35.91%
NGS
Natural Gas Services Group
38.46
13.61
54.75%
SEI
Solaris Energy Infrastructure
55.22
23.23
72.62%
LBRT
Liberty Energy
28.37
11.38
66.98%
KGS
Kodiak Gas Services, Inc.
52.75
12.42
30.81%
USA Compression Corporate Events
Business Operations and Strategy
USA Compression Highlights Investor Outreach at JPM Finance Conference
Positive
Feb 25, 2026
USA Compression Partners, LP said members of its senior management team would attend the J.P. Morgan Global Leveraged Finance Conference on March 2 and 3, where they plan to hold a series of meetings with investors. Presentation materials used in those meetings are to be made available on the partnership’s website in the investor relations section before the conference discussions, signaling continued outreach and transparency efforts toward the investment community.
The partnership indicated that, while it does not commit to updating posted materials, it may add new information through subsequent press releases, current reports, and periodic SEC filings. This approach underscores its reliance on formal disclosures and web-posted investor materials as primary channels for communicating with stakeholders about its financial position and strategic direction.
The most recent analyst rating on (USAC) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on USA Compression stock, see the USAC Stock Forecast page.
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
USA Compression Completes Transformative J-W Power Acquisition
Positive
Jan 14, 2026
On January 12, 2026, USA Compression Partners, LP closed its previously announced acquisition of J-W Power Company in a transaction valued at approximately $860 million, funded with about $430 million in cash drawn from its revolving credit facility and roughly 18.2 million common units issued to the seller. The deal adds more than 0.8 million active horsepower across regions including the Northeast, Mid-Continent, Rockies, Gulf Coast and Permian Basin, bringing USA Compression’s total active fleet to around 4.4 million horsepower, and introduces a diversified, high-quality customer base that bolsters its presence in mid‑to‑large horsepower compression. In connection with the closing, the seller received registration rights for the new common units, agreed to staggered lock-up periods on their sale, obtained a one-year non-voting board observer seat, and had affiliated entities joined as guarantors under USA Compression’s credit facility and senior notes, steps that collectively strengthen the partnership’s capital structure and governance framework while signaling an expansion-focused strategy for unitholders and other stakeholders.
The most recent analyst rating on (USAC) stock is a Buy with a $28.00 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 to Attend December Energy Conferences
Neutral
Dec 4, 2025
USA Compression Partners, LP announced that its senior management will participate in the Mizuho Power, Energy & Infrastructure Conference on December 8 and the Wells Fargo 24th Annual Energy & Power Symposium on December 9. During these events, they will engage with the investment community, and relevant presentation materials will be available on their website. This engagement reflects the company’s ongoing efforts to maintain transparency and communication with investors, potentially impacting its market positioning and stakeholder relations.
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 StrategyM&A Transactions
USA Compression Announces Strategic Acquisition of J-W Power
Positive
Dec 1, 2025
On November 29, 2025, USA Compression Partners, LP announced a strategic acquisition of J-W Power Company for approximately $860 million, expected to close in the first quarter of 2026. This acquisition is set to expand USA Compression’s fleet to 4.4 million active horsepower and enhance its geographic diversification across key U.S. regions, strengthening its market leadership in mid-to-large horsepower compression services.
The most recent analyst rating on (USAC) stock is a Hold with a $29.00 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.