ARCHROCK INC (AROC)
US03957W1062 - Common Stock
Taking everything into account, AROC scores 5 out of 10 in our fundamental rating. AROC was compared to 60 industry peers in the Energy Equipment & Services industry. AROC has an excellent profitability rating, but 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!
1. Profitability
1.1 Basic Checks
AROC had positive earnings in the past year.
In the past year AROC had a positive cash flow from operations.
AROC had positive earnings in 4 of the past 5 years.
Each year in the past 5 years AROC had a positive operating cash flow.
1.2 Ratios
AROC has a Return On Assets (3.76%) which is comparable to the rest of the industry.
The Return On Equity of AROC (11.11%) is comparable to the rest of the industry.
With a Return On Invested Capital value of 6.70%, AROC perfoms like the industry average, outperforming 51.67% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AROC is below the industry average of 8.29%.
The last Return On Invested Capital (6.70%) for AROC is above the 3 year average (5.35%), which is a sign of increasing profitability.
| 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 better Profit Margin (13.15%) than 85.00% of its industry peers.
AROC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 30.27%, AROC belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
AROC's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 58.41%, AROC belongs to the best of the industry, outperforming 95.00% 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 | 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.
The number of shares outstanding for AROC has been increased compared to 5 years ago.
Compared to 1 year ago, AROC has about the same debt to assets ratio.
2.2 Solvency
AROC has an Altman-Z score of 0.70. This is a bad value and indicates that AROC is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.70, AROC is doing worse than 75.00% of the companies in the same industry.
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.
AROC has a worse Debt to FCF ratio (28.21) than 63.33% of its industry peers.
AROC has a Debt/Equity ratio of 1.73. This is a high value indicating a heavy dependency on external financing.
AROC has a worse Debt to Equity ratio (1.73) than 85.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.73 | ||
| Debt/FCF | 28.21 | ||
| Altman-Z | 0.7 |
ROIC/WACC0.84
WACC8.02%
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.
With a Current ratio value of 1.26, AROC is not doing good in the industry: 81.67% of the companies in the same industry are doing better.
AROC has a Quick Ratio of 1.26. This is a bad value and indicates that AROC is not financially healthy enough and could expect problems in meeting its short term obligations.
AROC has a Quick ratio of 0.82. This is amonst the worse of the industry: AROC underperforms 91.67% 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 81.48%, which is quite impressive.
The Earnings Per Share has been growing by 12.01% on average over the past years. This is quite good.
The Revenue has grown by 14.86% in the past year. This is quite good.
The Revenue has been growing slightly by 1.83% on average over the past years.
EPS 1Y (TTM)81.48%
EPS 3Y42.82%
EPS 5Y12.01%
EPS Q2Q%40%
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 35.21% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 13.19% on average over the next years. This is quite good.
EPS Next Y58.33%
EPS Next 2Y48.39%
EPS Next 3Y35.21%
EPS Next 5YN/A
Revenue Next Year15.94%
Revenue Next 2Y17.62%
Revenue Next 3Y13.19%
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
AROC is valuated quite expensively with a Price/Earnings ratio of 26.27.
The rest of the industry has a similar Price/Earnings ratio as AROC.
The average S&P500 Price/Earnings ratio is at 28.96. AROC is around the same levels.
With a Price/Forward Earnings ratio of 17.45, AROC is valued on the expensive side.
AROC's Price/Forward Earnings is on the same level as the industry average.
AROC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.27 | ||
| Fwd PE | 17.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AROC is valued expensively inside the industry as 83.33% of the companies are valued cheaper.
63.33% of the companies in the same industry are cheaper than AROC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.09 | ||
| EV/EBITDA | 12.81 |
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 35.21% in the coming years.
PEG (NY)0.45
PEG (5Y)2.19
EPS Next 2Y48.39%
EPS Next 3Y35.21%
5. Dividend
5.1 Amount
AROC has a Yearly Dividend Yield of 2.92%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.50, AROC pays a better dividend. On top of this AROC pays more dividend than 81.67% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, AROC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
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.
AROC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)1.11%
Div Incr Years1
Div Non Decr Years6
5.3 Sustainability
72.44% of the earnings are spent on dividend by AROC. This is not a sustainable payout ratio.
The dividend of AROC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP72.44%
EPS Next 2Y48.39%
EPS Next 3Y35.21%
ARCHROCK INC
NYSE:AROC (11/21/2024, 8:12:55 PM)
After market: 25.7 -0.04 (-0.16%)25.74
+1.42 (+5.84%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap4.53B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.27 | ||
| Fwd PE | 17.45 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.45
PEG (5Y)2.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 11.11% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 30.27% | ||
| PM (TTM) | 13.15% | ||
| GM | 58.41% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.73 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)81.48%
EPS 3Y42.82%
EPS 5Y
EPS Q2Q%
EPS Next Y58.33%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)14.86%
Revenue growth 3Y4.21%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y