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1. Company Snapshot

1.a. 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, installing, operating, servicing, repairing, and maintaining its owned fleet of natural gas compression equipment to provide natural gas compression services to customers in the oil and natural gas industry.


It also offers various aftermarket services, such as sale of parts and components; and provision of operation, maintenance, overhaul, and reconfiguration services to customers who own compression equipment.The company was formerly known as Exterran Holdings, Inc.and changed its name to Archrock, Inc.


in November 2015.Archrock, Inc.was founded in 1990 and is headquartered in Houston, Texas.

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1.b. Last Insights on AROC

Archrock, Inc.'s recent performance was driven by strong Q4 2025 earnings, with revenue reaching $377.1 million, up from $326.4 million in Q4 2024. The company's quarterly earnings of $0.69 per share beat estimates, compared to $0.35 per share a year ago. Institutional investors, such as American Century Companies Inc. and Fox Run Management L.L.C., have increased their stakes in the company. Archrock's growth plan and 2026 financial guidance also support its outlook. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" from brokerages.

1.c. Company Highlights

2. Archrock's Strong 2025 Performance Sets Stage for Continued Growth

Archrock reported a robust financial performance for 2025, with net income reaching $322 million and adjusted EBITDA totaling $901 million. The company's adjusted EPS increased by 68% compared to 2024, driven by outstanding performance in its contract operations segment, which delivered adjusted gross margins of approximately 78%. Earnings per share (EPS) came in at $0.69, significantly beating estimates of $0.4. The company's strong execution and high demand for its compression fleet resulted in a fleet utilization rate of 95.5% for the fifth consecutive quarter.

Publication Date: Feb -26

📋 Highlights
  • Adjusted EPS & EBITDA Growth: 68% increase in adjusted EPS and 51% rise in adjusted EBITDA year-over-year ($901 million) in 2025.
  • Fleet Utilization: Maintained 95.5% full utilization for the fifth consecutive quarter, with 4.6 million operating horsepower at year-end.
  • Shareholder Returns: Returned $212 million to shareholders in 2025 via dividends and buybacks, a 70% increase from 2024.
  • Capital Deployment: $192 million reinvested in high-return new builds from asset sales, supporting 2026 growth CapEx of $250–275 million.
  • 2026 EBITDA Guidance: Outlined $865–915 million adjusted EBITDA, reflecting near-peak performance with 20–30% electric motor drive adoption and extended Caterpillar lead times (110–120 weeks).

Operational Highlights

Archrock's contract operations segment was the key driver of the company's success, with the fleet remaining fully utilized and a significant increase in operating horsepower to 4.6 million. The Aftermarket Services segment also delivered consistent margin performance, with adjusted gross margin percentage remaining above 20%. As noted by the management, "our strategy is grounded in the role natural gas continues to play as a critical component of the global energy mix," which is expected to continue driving demand for the company's services.

Capital Allocation and Guidance

Archrock returned $212 million to shareholders through dividends and share repurchases in 2025, representing a 70% increase year-over-year. The company expects to continue its disciplined approach to capital allocation, with growth CapEx expected to be between $250 million and $275 million in 2026. For the full year 2026, Archrock guided to adjusted EBITDA of $865 million to $915 million, representing a continued strong performance.

Valuation and Outlook

Using the current price, the stock trades at a P/E Ratio of 18.92 and an EV/EBITDA of 7.27. With analysts estimating revenue growth of 5.6% for the next year, the company's strong track record of execution and favorable industry tailwinds are expected to continue driving performance. The dividend yield stands at 2.37%, providing a relatively attractive return for income investors. Overall, Archrock's strong financial performance and guidance suggest that the company is well-positioned for continued growth and value creation.

3. NewsRoom

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Can Archrock Continue to Bank on Rising Clean Energy Demand?

Mar -04

Source: zacks.com

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Buy These 5 Dividend Growth Stocks Amid Middle East Tensions

Mar -04

Source: zacks.com

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Archrock, Inc. (NYSE:AROC) Receives Average Rating of “Buy” from Brokerages

Mar -04

Source: defenseworld.net

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Midstream Energy: Relative Favorability

Mar -04

Source: seekingalpha.com

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Archrock (NYSE:AROC) Sets New 52-Week High Following Analyst Upgrade

Mar -03

Source: defenseworld.net

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Archrock Q4 Earnings Beat Estimates on Strong Gas Compression Demand

Mar -02

Source: zacks.com

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American Century Companies Inc. Increases Position in Archrock, Inc. $AROC

Mar -02

Source: defenseworld.net

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Archrock Announces Redemption of All Outstanding 6.25% Senior Notes Due 2028

Feb -26

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.37%)

6. Segments

Contract Operations

Expected Growth: 5%

Contract Operations from Archrock, Inc. achieved 5% growth driven by increasing demand for natural gas processing and treating services, expansion into new markets, and strategic contract wins. Additionally, the segment benefited from operational efficiencies, cost savings initiatives, and a growing presence in the Permian Basin.

Aftermarket Services

Expected Growth: 7%

Archrock's Aftermarket Services segment growth is driven by increasing demand for natural gas compression services, expansion into new markets, and strategic acquisitions. The company's focus on providing cost-effective and efficient solutions, coupled with its strong relationships with customers, has enabled it to capitalize on the growing need for aftermarket services in the oil and gas industry.

7. Detailed Products

Aftermarket Services

Archrock provides aftermarket services, including maintenance, repair, and overhaul of compression equipment, to ensure optimal performance and extend equipment life.

Contract Operations

Archrock offers contract operations services, where they operate and maintain customer-owned compression equipment, providing a comprehensive solution for oil and gas operators.

Equipment Sales

Archrock designs, manufactures, and sells compression equipment, including reciprocating and rotary screw compressors, for oil and gas applications.

Fabrication Services

Archrock provides fabrication services, including assembly, testing, and packaging of compression equipment, to meet specific customer requirements.

Parts and Components

Archrock supplies genuine parts and components for compression equipment, ensuring optimal performance and minimizing downtime.

Rental Equipment

Archrock offers a range of rental compression equipment, including compressors, generators, and auxiliary equipment, for short-term or long-term rentals.

Well Testing

Archrock provides well testing services, including equipment and personnel, to help operators evaluate and optimize well performance.

8. Archrock, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Archrock, Inc. is medium due to the availability of alternative products and services in the energy industry.

Bargaining Power Of Customers

The bargaining power of customers for Archrock, Inc. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Archrock, Inc. is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants for Archrock, Inc. is low due to the high barriers to entry in the energy industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Archrock, Inc. is high due to the competitive nature of the energy industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.75%
Debt Cost 9.46%
Equity Weight 35.25%
Equity Cost 11.82%
WACC 10.29%
Leverage 183.73%

11. Quality Control: Archrock, Inc. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
USA Compression Partners

A-Score: 6.8/10

Value: 6.0

Growth: 5.2

Quality: 5.9

Yield: 10.0

Momentum: 6.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Archrock

A-Score: 5.6/10

Value: 3.9

Growth: 4.9

Quality: 5.9

Yield: 8.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
NOV

A-Score: 5.4/10

Value: 7.7

Growth: 5.4

Quality: 5.0

Yield: 4.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Liberty Energy

A-Score: 5.0/10

Value: 7.8

Growth: 8.1

Quality: 4.6

Yield: 3.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Weatherford

A-Score: 4.7/10

Value: 5.9

Growth: 7.2

Quality: 6.1

Yield: 1.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Cactus

A-Score: 4.4/10

Value: 5.5

Growth: 4.4

Quality: 8.1

Yield: 2.0

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.04$

Current Price

37.04$

Potential

-0.00%

Expected Cash-Flows