ARCHROCK INC (AROC) Stock Fundamental Analysis
NYSE:AROC - New York Stock Exchange, Inc. - US03957W1062 - Common Stock
Taking everything into account, AROC scores 5 out of 10 in our fundamental rating. AROC was compared to 58 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 valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
In the past year AROC was profitable.
In the past year AROC had a positive cash flow from operations.
Of the past 5 years AROC 4 years were profitable.
AROC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AROC has a Return On Assets of 3.76%. This is comparable to the rest of the industry: AROC outperforms 53.45% of its industry peers.
Looking at the Return On Equity, with a value of 11.11%, AROC is in line with its industry, outperforming 56.90% of the companies in the same industry.
With a Return On Invested Capital value of 6.70%, AROC perfoms like the industry average, outperforming 53.45% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AROC is below the industry average of 8.32%.
The 3 year average ROIC (5.35%) for AROC is below the current ROIC(6.70%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 11.11% | ||
| ROIC | 6.7% |
ROA(3y)2.19%
ROA(5y)1.43%
ROE(3y)6.62%
ROE(5y)4.25%
ROIC(3y)5.35%
ROIC(5y)5.32%
1.3 Margins
AROC has a Profit Margin of 13.15%. This is amongst the best in the industry. AROC outperforms 82.76% of its industry peers.
AROC's Profit Margin has improved in the last couple of years.
The Operating Margin of AROC (30.27%) is better than 94.83% of its industry peers.
In the last couple of years the Operating Margin of AROC has grown nicely.
The Gross Margin of AROC (58.41%) is better than 94.83% of its industry peers.
In the last couple of years the Gross Margin of AROC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.27% | ||
| PM (TTM) | 13.15% | ||
| GM | 58.41% |
OM growth 3Y4.21%
OM growth 5Y6.77%
PM growth 3YN/A
PM growth 5Y36.05%
GM growth 3Y-1.32%
GM growth 5Y2.35%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AROC is destroying value.
The number of shares outstanding for AROC has been increased compared to 1 year ago.
Compared to 5 years ago, AROC has more shares outstanding
The debt/assets ratio for AROC has remained at the same level compared to a year ago.
2.2 Solvency
AROC has an Altman-Z score of 0.94. This is a bad value and indicates that AROC is not financially healthy and even has some risk of bankruptcy.
AROC has a Altman-Z score of 0.94. This is in the lower half of the industry: AROC underperforms 79.31% of its industry peers.
AROC has a debt to FCF ratio of 28.21. This is a negative value and a sign of low solvency as AROC would need 28.21 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 28.21, AROC is doing worse than 60.34% of the companies in the same industry.
AROC has a Debt/Equity ratio of 1.73. This is a high value indicating a heavy dependency on external financing.
AROC has a Debt to Equity ratio of 1.73. This is amonst the worse of the industry: AROC underperforms 86.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.73 | ||
| Debt/FCF | 28.21 | ||
| Altman-Z | 0.94 |
ROIC/WACC0.78
WACC8.6%
2.3 Liquidity
AROC has a Current Ratio of 1.26. 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 1.26 is on the low side compared to the rest of the industry. AROC is outperformed by 84.48% of its industry peers.
A Quick Ratio of 0.82 indicates that AROC may have some problems paying its short term obligations.
AROC has a worse Quick ratio (0.82) than 94.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
AROC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 70.37%, which is quite impressive.
AROC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.01% yearly.
AROC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.86%.
Measured over the past years, AROC shows a small growth in Revenue. The Revenue has been growing by 1.83% on average per year.
EPS 1Y (TTM)70.37%
EPS 3Y42.82%
EPS 5Y12.01%
EPS Q2Q%10%
Revenue 1Y (TTM)14.86%
Revenue growth 3Y4.21%
Revenue growth 5Y1.83%
Sales Q2Q%15.31%
3.2 Future
The Earnings Per Share is expected to grow by 32.97% on average over the next years. This is a very strong growth
Based on estimates for the next years, AROC will show a quite strong growth in Revenue. The Revenue will grow by 13.53% on average per year.
EPS Next Y70.39%
EPS Next 2Y43.76%
EPS Next 3Y32.97%
EPS Next 5YN/A
Revenue Next Year17.53%
Revenue Next 2Y17.87%
Revenue Next 3Y13.53%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 32.98, AROC can be considered very expensive at the moment.
62.07% of the companies in the same industry are cheaper than AROC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.29, AROC is valued at the same level.
AROC is valuated rather expensively with a Price/Forward Earnings ratio of 21.91.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AROC indicates a slightly more expensive valuation: AROC is more expensive than 67.24% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of AROC to the average of the S&P500 Index (24.44), we can say AROC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.98 | ||
| Fwd PE | 21.91 |
4.2 Price Multiples
89.66% of the companies in the same industry are cheaper than AROC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AROC is valued a bit more expensive than 63.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 67.03 | ||
| EV/EBITDA | 14.86 |
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 decent 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 32.97% in the coming years.
PEG (NY)0.47
PEG (5Y)2.75
EPS Next 2Y43.76%
EPS Next 3Y32.97%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.37%, AROC has a reasonable but not impressive dividend return.
AROC's Dividend Yield is rather good when compared to the industry average which is at 3.28. AROC pays more dividend than 81.03% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, AROC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
The dividend of AROC has a limited annual growth rate of 1.11%.
AROC has paid a dividend for at least 10 years, which is a reliable track record.
As AROC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)1.11%
Div Incr Years2
Div Non Decr Years7
5.3 Sustainability
72.44% of the earnings are spent on dividend by AROC. This is not a sustainable payout ratio.
AROC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP72.44%
EPS Next 2Y43.76%
EPS Next 3Y32.97%
ARCHROCK INC
NYSE:AROC (1/21/2025, 8:04:00 PM)
After market: 30.34 0 (0%)30.34
+0.61 (+2.05%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners84.13%
Inst Owner Change0.05%
Ins Owners2.64%
Ins Owner Change-0.07%
Market Cap5.31B
Analysts84.62
Price Target26.55 (-12.49%)
Short Float %4.14%
Short Ratio5.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
Yearly Dividend0.61
Dividend Growth(5Y)1.11%
DP72.44%
Div Incr Years2
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-13.95%
Min EPS beat(2)-19.32%
Max EPS beat(2)-8.59%
EPS beat(4)1
Avg EPS beat(4)-4.31%
Min EPS beat(4)-19.32%
Max EPS beat(4)14.14%
EPS beat(8)4
Avg EPS beat(8)-0.92%
EPS beat(12)6
Avg EPS beat(12)13.49%
EPS beat(16)6
Avg EPS beat(16)1.19%
Revenue beat(2)1
Avg Revenue beat(2)-0.95%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)0.09%
Revenue beat(4)3
Avg Revenue beat(4)-0.16%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)1.04%
Revenue beat(8)5
Avg Revenue beat(8)-0.39%
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)-0.84%
PT rev (3m)10.77%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.56%
EPS NY rev (1m)0%
EPS NY rev (3m)11.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)16.93%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.98 | ||
| Fwd PE | 21.91 | ||
| P/S | 4.87 | ||
| P/FCF | 67.03 | ||
| P/OCF | 14.1 | ||
| P/B | 4.12 | ||
| P/tB | 4.85 | ||
| EV/EBITDA | 14.86 |
EPS(TTM)0.92
EY3.03%
EPS(NY)1.38
Fwd EY4.56%
FCF(TTM)0.45
FCFY1.49%
OCF(TTM)2.15
OCFY7.09%
SpS6.23
BVpS7.37
TBVpS6.26
PEG (NY)0.47
PEG (5Y)2.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 11.11% | ||
| ROCE | 9.12% | ||
| ROIC | 6.7% | ||
| ROICexc | 6.71% | ||
| ROICexgc | 7.09% | ||
| OM | 30.27% | ||
| PM (TTM) | 13.15% | ||
| GM | 58.41% | ||
| FCFM | 7.27% |
ROA(3y)2.19%
ROA(5y)1.43%
ROE(3y)6.62%
ROE(5y)4.25%
ROIC(3y)5.35%
ROIC(5y)5.32%
ROICexc(3y)5.35%
ROICexc(5y)5.33%
ROICexgc(3y)5.43%
ROICexgc(5y)5.47%
ROCE(3y)7.28%
ROCE(5y)7.25%
ROICexcg growth 3Y10.52%
ROICexcg growth 5Y7.57%
ROICexc growth 3Y10.93%
ROICexc growth 5Y7.78%
OM growth 3Y4.21%
OM growth 5Y6.77%
PM growth 3YN/A
PM growth 5Y36.05%
GM growth 3Y-1.32%
GM growth 5Y2.35%
F-Score6
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.73 | ||
| Debt/FCF | 28.21 | ||
| Debt/EBITDA | 4.4 | ||
| Cap/Depr | 167.47% | ||
| Cap/Sales | 27.29% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.21% | ||
| Profit Quality | 55.28% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z | 0.94 |
F-Score6
WACC8.6%
ROIC/WACC0.78
Cap/Depr(3y)126.79%
Cap/Depr(5y)131.56%
Cap/Sales(3y)23.68%
Cap/Sales(5y)25.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)70.37%
EPS 3Y42.82%
EPS 5Y12.01%
EPS Q2Q%10%
EPS Next Y70.39%
EPS Next 2Y43.76%
EPS Next 3Y32.97%
EPS Next 5YN/A
Revenue 1Y (TTM)14.86%
Revenue growth 3Y4.21%
Revenue growth 5Y1.83%
Sales Q2Q%15.31%
Revenue Next Year17.53%
Revenue Next 2Y17.87%
Revenue Next 3Y13.53%
Revenue Next 5YN/A
EBIT growth 1Y48.68%
EBIT growth 3Y8.6%
EBIT growth 5Y8.72%
EBIT Next Year133.5%
EBIT Next 3Y45.93%
EBIT Next 5YN/A
FCF growth 1Y2717.13%
FCF growth 3Y-61.01%
FCF growth 5YN/A
OCF growth 1Y93.31%
OCF growth 3Y-2.56%
OCF growth 5Y6.55%