ARCHROCK INC (AROC)
US03957W1062 - Common Stock
AROC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 59 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 shows excellent growth, but is valued quite expensive already.
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.
Of the past 5 years AROC 4 years were profitable.
Each year in the past 5 years AROC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AROC (3.76%) is comparable to the rest of the industry.
The Return On Equity of AROC (11.11%) is comparable to the rest of the industry.
AROC has a Return On Invested Capital (6.70%) which is in line with its industry peers.
AROC had an Average Return On Invested Capital over the past 3 years of 5.35%. This is below the industry average of 8.50%.
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
With an excellent Profit Margin value of 13.15%, AROC belongs to the best of the industry, outperforming 81.36% of the companies in the same industry.
In the last couple of years the Profit Margin of AROC has grown nicely.
The Operating Margin of AROC (30.27%) is better than 94.92% of its industry peers.
AROC's Operating Margin has improved in the last couple of years.
AROC has a better Gross Margin (58.41%) than 94.92% 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.
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
Compared to 1 year ago, AROC has about the same debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.70, we must say that AROC is in the distress zone and has some risk of bankruptcy.
AROC's Altman-Z score of 0.70 is on the low side compared to the rest of the industry. AROC is outperformed by 79.66% 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 64.41% of the companies in the same industry.
A Debt/Equity ratio of 1.73 is on the high side and indicates that AROC has dependencies on debt financing.
AROC has a Debt to Equity ratio of 1.73. This is amonst the worse of the industry: AROC underperforms 86.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.73 | ||
| Debt/FCF | 28.21 | ||
| Altman-Z | 0.7 |
ROIC/WACC0.83
WACC8.11%
2.3 Liquidity
A Current Ratio of 1.26 indicates that AROC should not have too much problems paying its short term obligations.
The Current ratio of AROC (1.26) is worse than 83.05% of its industry peers.
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 94.92% 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.
The Earnings Per Share has been growing by 12.01% on average over the past years. This is quite good.
Looking at the last year, AROC shows a quite strong growth in Revenue. The Revenue has grown by 14.86% in the last year.
AROC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.83% yearly.
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.
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
A Price/Earnings ratio of 26.68 indicates a quite expensive valuation of AROC.
Compared to the rest of the industry, the Price/Earnings ratio of AROC indicates a slightly more expensive valuation: AROC is more expensive than 61.02% of the companies listed in the same industry.
AROC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.73 indicates a rather expensive valuation of AROC.
Based on the Price/Forward Earnings ratio, AROC is valued a bit more expensive than the industry average as 64.41% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, AROC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.68 | ||
| Fwd PE | 17.73 |
4.2 Price Multiples
AROC's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. AROC is more expensive than 91.53% of the companies 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 67.80% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.24 | ||
| EV/EBITDA | 12.86 |
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.
AROC has a very decent profitability rating, which may justify a higher PE ratio.
AROC's earnings are expected to grow with 32.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.38
PEG (5Y)2.22
EPS Next 2Y43.76%
EPS Next 3Y32.97%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.91%, AROC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.64, AROC pays a bit more dividend than its industry peers.
AROC's Dividend Yield is a higher than the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
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.
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 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.
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 (12/20/2024, 8:04:00 PM)
After market: 25.079 +0.53 (+2.15%)24.55
+0.52 (+2.16%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners84.13%
Inst Owner Change12.23%
Ins Owners2.64%
Ins Owner Change-0.07%
Market Cap4.30B
Analysts84.62
Price Target26.78 (9.08%)
Short Float %3.41%
Short Ratio4.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
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)7.69%
PT rev (3m)11.7%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.56%
EPS NY rev (1m)7.62%
EPS NY rev (3m)11.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)16.93%
Revenue NY rev (1m)1.37%
Revenue NY rev (3m)5.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.68 | ||
| Fwd PE | 17.73 | ||
| P/S | 3.94 | ||
| P/FCF | 54.24 | ||
| P/OCF | 11.41 | ||
| P/B | 3.33 | ||
| P/tB | 3.92 | ||
| EV/EBITDA | 12.86 |
EPS(TTM)0.92
EY3.75%
EPS(NY)1.38
Fwd EY5.64%
FCF(TTM)0.45
FCFY1.84%
OCF(TTM)2.15
OCFY8.77%
SpS6.23
BVpS7.37
TBVpS6.26
PEG (NY)0.38
PEG (5Y)2.22
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 | 0.7 |
F-Score6
WACC8.11%
ROIC/WACC0.83
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 Year132.97%
EBIT Next 3Y44.82%
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%