ARCHROCK INC (AROC) Stock Fundamental Analysis
NYSE:AROC - New York Stock Exchange, Inc. - US03957W1062 - Common Stock - Currency: USD
AROC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 62 industry peers in the Energy Equipment & Services industry. While AROC belongs to the best of the industry regarding profitability, there are concerns on its financial health. AROC is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! Finally AROC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
AROC had positive earnings in the past year.
AROC had a positive operating cash flow in the past year.
Of the past 5 years AROC 4 years were profitable.
In the past 5 years AROC always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AROC (5.03%) is comparable to the rest of the industry.
AROC's Return On Equity of 14.79% is fine compared to the rest of the industry. AROC outperforms 75.81% of its industry peers.
AROC has a Return On Invested Capital of 8.06%. This is in the better half of the industry: AROC outperforms 62.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AROC is in line with the industry average of 8.42%.
The last Return On Invested Capital (8.06%) for AROC is above the 3 year average (6.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 14.79% | ||
| ROIC | 8.06% |
ROA(3y)3.33%
ROA(5y)1.7%
ROE(3y)9.89%
ROE(5y)5.05%
ROIC(3y)6.45%
ROIC(5y)5.83%
1.3 Margins
The Profit Margin of AROC (16.15%) is better than 90.32% of its industry peers.
In the last couple of years the Profit Margin of AROC has grown nicely.
Looking at the Operating Margin, with a value of 33.33%, AROC belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
In the last couple of years the Operating Margin of AROC has grown nicely.
With an excellent Gross Margin value of 61.92%, AROC belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
In the last couple of years the Gross Margin of AROC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.33% | ||
| PM (TTM) | 16.15% | ||
| GM | 61.92% |
OM growth 3Y20.43%
OM growth 5Y8.34%
PM growth 3Y61.88%
PM growth 5Y8.11%
GM growth 3Y3.75%
GM growth 5Y2.75%
2. Health
2.1 Basic Checks
AROC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AROC has more shares outstanding
The number of shares outstanding for AROC has been increased compared to 5 years ago.
Compared to 1 year ago, AROC has an improved debt to assets ratio.
2.2 Solvency
AROC has an Altman-Z score of 0.78. This is a bad value and indicates that AROC is not financially healthy and even has some risk of bankruptcy.
AROC's Altman-Z score of 0.78 is on the low side compared to the rest of the industry. AROC is outperformed by 79.03% of its industry peers.
A Debt/Equity ratio of 1.70 is on the high side and indicates that AROC has dependencies on debt financing.
AROC has a worse Debt to Equity ratio (1.70) than 85.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.78 |
ROIC/WACC0.9
WACC8.99%
2.3 Liquidity
AROC has a Current Ratio of 1.47. This is a normal value and indicates that AROC is financially healthy and should not expect problems in meeting its short term obligations.
AROC's Current ratio of 1.47 is on the low side compared to the rest of the industry. AROC is outperformed by 70.97% of its industry peers.
A Quick Ratio of 0.96 indicates that AROC may have some problems paying its short term obligations.
AROC's Quick ratio of 0.96 is on the low side compared to the rest of the industry. AROC is outperformed by 77.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 44.58% over the past year.
AROC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.59% yearly.
Looking at the last year, AROC shows a very strong growth in Revenue. The Revenue has grown by 20.14%.
The Revenue has been growing slightly by 3.70% on average over the past years.
EPS 1Y (TTM)44.58%
EPS 3Y76.8%
EPS 5Y5.59%
EPS Q2Q%57.69%
Revenue 1Y (TTM)20.14%
Revenue growth 3Y13.99%
Revenue growth 5Y3.7%
Sales Q2Q%29.3%
3.2 Future
Based on estimates for the next years, AROC will show a very strong growth in Earnings Per Share. The EPS will grow by 25.65% on average per year.
AROC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.36% yearly.
EPS Next Y51.74%
EPS Next 2Y32.17%
EPS Next 3Y25.65%
EPS Next 5YN/A
Revenue Next Year27%
Revenue Next 2Y17.43%
Revenue Next 3Y9.36%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.82, which indicates a rather expensive current valuation of AROC.
AROC's Price/Earnings ratio is in line with the industry average.
AROC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.52.
AROC is valuated correctly with a Price/Forward Earnings ratio of 12.96.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AROC is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of AROC to the average of the S&P500 Index (35.58), we can say AROC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.82 | ||
| Fwd PE | 12.96 |
4.2 Price Multiples
87.10% of the companies in the same industry are cheaper than AROC, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.27 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of AROC may justify a higher PE ratio.
A more expensive valuation may be justified as AROC's earnings are expected to grow with 25.65% in the coming years.
PEG (NY)0.38
PEG (5Y)3.55
EPS Next 2Y32.17%
EPS Next 3Y25.65%
5. Dividend
5.1 Amount
AROC has a Yearly Dividend Yield of 3.26%. Purely for dividend investing, there may be better candidates out there.
AROC's Dividend Yield is rather good when compared to the industry average which is at 3.52. AROC pays more dividend than 83.87% of the companies in the same industry.
AROC's Dividend Yield is a higher than the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
The dividend of AROC has a limited annual growth rate of 3.62%.
AROC has paid a dividend for at least 10 years, which is a reliable track record.
AROC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)3.62%
Div Incr Years2
Div Non Decr Years7
5.3 Sustainability
AROC pays out 59.40% of its income as dividend. This is a bit on the high side, but may be sustainable.
AROC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP59.4%
EPS Next 2Y32.17%
EPS Next 3Y25.65%
23.78
+0.44 (+1.89%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.71%
Inst Owner Change-0.01%
Ins Owners2.7%
Ins Owner Change0.41%
Market Cap4.20B
Analysts84.29
Price Target31.49 (32.42%)
Short Float %3.46%
Short Ratio4.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend0.67
Dividend Growth(5Y)3.62%
DP59.4%
Div Incr Years2
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.72%
Min EPS beat(2)5%
Max EPS beat(2)10.45%
EPS beat(4)2
Avg EPS beat(4)-3.11%
Min EPS beat(4)-19.32%
Max EPS beat(4)10.45%
EPS beat(8)5
Avg EPS beat(8)1.35%
EPS beat(12)7
Avg EPS beat(12)11.92%
EPS beat(16)8
Avg EPS beat(16)9.93%
Revenue beat(2)0
Avg Revenue beat(2)-1.96%
Min Revenue beat(2)-3.21%
Max Revenue beat(2)-0.71%
Revenue beat(4)1
Avg Revenue beat(4)-1.46%
Min Revenue beat(4)-3.21%
Max Revenue beat(4)0.09%
Revenue beat(8)4
Avg Revenue beat(8)-0.71%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-4.63%
EPS NQ rev (1m)-3.1%
EPS NQ rev (3m)-7%
EPS NY rev (1m)-3.2%
EPS NY rev (3m)-3.73%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)2.94%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.82 | ||
| Fwd PE | 12.96 | ||
| P/S | 3.4 | ||
| P/FCF | N/A | ||
| P/OCF | 10.32 | ||
| P/B | 3.11 | ||
| P/tB | 3.5 | ||
| EV/EBITDA | 10.27 |
EPS(TTM)1.2
EY5.05%
EPS(NY)1.83
Fwd EY7.71%
FCF(TTM)-0.11
FCFYN/A
OCF(TTM)2.3
OCFY9.69%
SpS6.99
BVpS7.64
TBVpS6.8
PEG (NY)0.38
PEG (5Y)3.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 14.79% | ||
| ROCE | 10.9% | ||
| ROIC | 8.06% | ||
| ROICexc | 8.07% | ||
| ROICexgc | 8.4% | ||
| OM | 33.33% | ||
| PM (TTM) | 16.15% | ||
| GM | 61.92% | ||
| FCFM | N/A |
ROA(3y)3.33%
ROA(5y)1.7%
ROE(3y)9.89%
ROE(5y)5.05%
ROIC(3y)6.45%
ROIC(5y)5.83%
ROICexc(3y)6.45%
ROICexc(5y)5.83%
ROICexgc(3y)6.61%
ROICexgc(5y)5.97%
ROCE(3y)8.72%
ROCE(5y)7.88%
ROICexcg growth 3Y21.54%
ROICexcg growth 5Y7.48%
ROICexc growth 3Y20.63%
ROICexc growth 5Y7.9%
OM growth 3Y20.43%
OM growth 5Y8.34%
PM growth 3Y61.88%
PM growth 5Y8.11%
GM growth 3Y3.75%
GM growth 5Y2.75%
F-Score7
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.68 | ||
| Cap/Depr | 200.63% | ||
| Cap/Sales | 34.57% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.19% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 0.78 |
F-Score7
WACC8.99%
ROIC/WACC0.9
Cap/Depr(3y)167.19%
Cap/Depr(5y)125.78%
Cap/Sales(3y)29.85%
Cap/Sales(5y)23.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)44.58%
EPS 3Y76.8%
EPS 5Y5.59%
EPS Q2Q%57.69%
EPS Next Y51.74%
EPS Next 2Y32.17%
EPS Next 3Y25.65%
EPS Next 5YN/A
Revenue 1Y (TTM)20.14%
Revenue growth 3Y13.99%
Revenue growth 5Y3.7%
Sales Q2Q%29.3%
Revenue Next Year27%
Revenue Next 2Y17.43%
Revenue Next 3Y9.36%
Revenue Next 5YN/A
EBIT growth 1Y42.48%
EBIT growth 3Y37.29%
EBIT growth 5Y12.34%
EBIT Next Year116.23%
EBIT Next 3Y35.92%
EBIT Next 5YN/A
FCF growth 1Y69.23%
FCF growth 3Y-20.33%
FCF growth 5YN/A
OCF growth 1Y89.78%
OCF growth 3Y21.86%
OCF growth 5Y8.17%