ARCHROCK INC (AROC) Stock Fundamental Analysis
NYSE:AROC - New York Stock Exchange, Inc. - US03957W1062 - Common Stock - Currency: USD
Overall AROC gets a fundamental rating of 5 out of 10. We evaluated AROC against 59 industry peers in the Energy Equipment & Services industry. While AROC has a great profitability rating, there are quite some 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.
In the past 5 years AROC always reported a positive cash flow from operatings.
1.2 Ratios
AROC's Return On Assets of 3.76% is in line compared 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 the better half of the industry, outperforming 62.07% of the companies in the same industry.
AROC's Return On Invested Capital of 6.70% is in line compared to the rest of the industry. AROC outperforms 56.90% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AROC is below the industry average of 8.19%.
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
Looking at the Profit Margin, with a value of 13.15%, AROC belongs to the top of the industry, outperforming 82.76% of the companies in the same industry.
In the last couple of years the Profit Margin of AROC has grown nicely.
Looking at the Operating Margin, with a value of 30.27%, AROC belongs to the top of the industry, outperforming 94.83% of the companies in the same industry.
In the last couple of years the Operating Margin of AROC has grown nicely.
AROC has a Gross Margin of 58.41%. This is amongst the best in the industry. AROC outperforms 94.83% of its industry peers.
AROC's Gross Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AROC is destroying value.
Compared to 1 year ago, AROC has more shares outstanding
AROC has more shares outstanding than it did 5 years ago.
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 0.81. This is a bad value and indicates that AROC is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.81, AROC is not doing good in the industry: 75.86% of the companies in the same industry are doing better.
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 Debt to FCF ratio of 28.21. This is in the lower half of the industry: AROC underperforms 60.34% 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's Debt to Equity ratio of 1.73 is on the low side compared to the rest of the industry. AROC is outperformed by 86.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.73 | ||
| Debt/FCF | 28.21 | ||
| Altman-Z | 0.81 |
ROIC/WACC0.74
WACC9.1%
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 has a Current ratio of 1.26. This is amonst the worse of the industry: AROC underperforms 84.48% of its industry peers.
A Quick Ratio of 0.82 indicates that AROC may have some problems paying its short term obligations.
The Quick ratio of AROC (0.82) is worse than 94.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 70.37% over the past year.
Measured over the past years, AROC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.01% on average per year.
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
AROC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 36.15% yearly.
The Revenue is expected to grow by 15.00% on average over the next years. This is quite good.
EPS Next Y68.68%
EPS Next 2Y46.38%
EPS Next 3Y36.15%
EPS Next 5YN/A
Revenue Next Year18.03%
Revenue Next 2Y18.76%
Revenue Next 3Y15%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 28.68, which means the current valuation is very expensive for AROC.
Compared to the rest of the industry, the Price/Earnings ratio of AROC is on the same level as its industry peers.
AROC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.63.
With a Price/Forward Earnings ratio of 18.38, AROC is valued on the expensive side.
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 63.79% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, AROC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.68 | ||
| Fwd PE | 18.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AROC indicates a rather expensive valuation: AROC more expensive than 91.38% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AROC indicates a slightly more expensive valuation: AROC is more expensive than 67.24% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.31 | ||
| EV/EBITDA | 13.78 |
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 36.15% in the coming years.
PEG (NY)0.42
PEG (5Y)2.39
EPS Next 2Y46.38%
EPS Next 3Y36.15%
5. Dividend
5.1 Amount
AROC has a Yearly Dividend Yield of 2.79%.
AROC's Dividend Yield is rather good when compared to the industry average which is at 3.47. AROC pays more dividend than 82.76% of the companies in the same industry.
AROC's Dividend Yield is a higher than the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
The dividend of AROC has a limited annual growth rate of 1.11%.
AROC has been paying a dividend for at least 10 years, so it has 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
AROC pays out 72.44% of its income as dividend. 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 2Y46.38%
EPS Next 3Y36.15%
26.39
-0.83 (-3.05%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners96.88%
Inst Owner Change3.1%
Ins Owners2.64%
Ins Owner Change-0.02%
Market Cap4.62B
Analysts84.29
Price Target30.22 (14.51%)
Short Float %3.73%
Short Ratio4.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Yearly Dividend0.61
Dividend Growth(5Y)1.11%
DP72.44%
Div Incr Years2
Div Non Decr Years7
Ex-Date
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)4.68%
PT rev (3m)11.79%
EPS NQ rev (1m)6.36%
EPS NQ rev (3m)9.08%
EPS NY rev (1m)-1%
EPS NY rev (3m)6.54%
Revenue NQ rev (1m)1.56%
Revenue NQ rev (3m)18.75%
Revenue NY rev (1m)0.42%
Revenue NY rev (3m)1.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.68 | ||
| Fwd PE | 18.38 | ||
| P/S | 4.24 | ||
| P/FCF | 58.31 | ||
| P/OCF | 12.26 | ||
| P/B | 3.58 | ||
| P/tB | 4.22 | ||
| EV/EBITDA | 13.78 |
EPS(TTM)0.92
EY3.49%
EPS(NY)1.44
Fwd EY5.44%
FCF(TTM)0.45
FCFY1.72%
OCF(TTM)2.15
OCFY8.16%
SpS6.23
BVpS7.37
TBVpS6.26
PEG (NY)0.42
PEG (5Y)2.39
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 | 0.81 |
F-Score6
WACC9.1%
ROIC/WACC0.74
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 Y68.68%
EPS Next 2Y46.38%
EPS Next 3Y36.15%
EPS Next 5YN/A
Revenue 1Y (TTM)14.86%
Revenue growth 3Y4.21%
Revenue growth 5Y1.83%
Sales Q2Q%15.31%
Revenue Next Year18.03%
Revenue Next 2Y18.76%
Revenue Next 3Y15%
Revenue Next 5YN/A
EBIT growth 1Y48.68%
EBIT growth 3Y8.6%
EBIT growth 5Y8.72%
EBIT Next Year133.74%
EBIT Next 3Y46.28%
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%