Archrock, Inc. (AROC) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Archrock, Inc. (AROC) Energy Operations & Outlook

Archrock, Inc. (AROC) is a leading energy infrastructure company focused on natural gas compression in the U.S. With a comprehensive service offering including contract operations and aftermarket support, Archrock supports critical midstream operations, leveraging a large owned fleet and established customer relationships within the oil and gas sector.

What Is the Investment Thesis for AROC?

The company's consistent profitability, demonstrated by a profit margin of 21.4%, and a robust gross margin of 57.2%, highlight its operational efficiency. AROC's dividend yield of 2.25% offers an appealing income stream for investors. Growth catalysts include increasing demand for natural gas compression services driven by rising natural gas production and infrastructure development. However, potential risks include fluctuations in commodity prices and regulatory changes impacting the energy sector. With a beta of 0.91, AROC exhibits relatively stable performance compared to the broader market, making it a potentially noteworthy option for risk-averse investors seeking exposure to the energy sector.

Based on FMP financials and quantitative analysis

AROC Key Highlights

Market capitalization of $5.73B, reflecting substantial investor confidence in Archrock's market position.

• P/E ratio of 17.40, indicating a reasonable valuation relative to earnings.
• Profit margin of 21.4%, showcasing efficient operations and strong profitability.
• Gross margin of 57.2%, demonstrating the company's ability to control costs and maintain pricing power.
• Dividend yield of 2.25%, providing a steady income stream for investors.

Who Are AROC's Competitors?

AROC is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are AROC's Key Strengths?

Large fleet of compression equipment.

• Strong relationships with key customers.
• Technical expertise in compression services.
• Stable revenue from contract operations and aftermarket services.

What Are AROC's Weaknesses?

Exposure to fluctuations in commodity prices.

• Dependence on the oil and natural gas industry.
• Capital-intensive business model.
• Potential for environmental liabilities.

What Could Drive AROC Stock Higher?

Increased natural gas production driving demand for compression services.

• Potential acquisitions to expand market share and service offerings.
• Development and deployment of new compression technologies.
• Focus on ESG initiatives attracting environmentally conscious customers and investors.

What Are the Key Risks for AROC?

Financial-distress signal — its Altman Z-Score of 1.24 sits in the distress zone (elevated bankruptcy risk).

• Insider selling — insiders were net sellers of roughly $11.9M recently.
• Fluctuations in oil and natural gas prices impacting demand.
• Increased competition from other compression service providers.
• Regulatory changes impacting the energy sector.
• Technological obsolescence of compression equipment.
• Environmental liabilities associated with compression operations.

What Are the Growth Opportunities for AROC?

• Expansion of Compression Services: The increasing demand for natural gas as a transitional fuel source offers a significant growth opportunity for Archrock's compression services. As natural gas production expands, particularly in shale basins, the need for compression infrastructure to transport and process the gas will also rise. Archrock can capitalize on this trend by expanding its fleet and service offerings in key production areas. The market for natural gas compression services is projected to grow at a rate of 3-5% annually over the next five years.
• Aftermarket Services Growth: Archrock's Aftermarket Services segment provides a stable and recurring revenue stream. As the installed base of compression equipment grows, the demand for maintenance, repair, and overhaul services will also increase. Archrock can enhance this growth by expanding its service capabilities, offering specialized maintenance programs, and leveraging its expertise to capture a larger share of the aftermarket services market. The aftermarket services market is estimated to be worth $2 billion annually.
• Technological Innovation: Investing in advanced compression technologies can provide Archrock with a competitive edge. Developing more efficient, reliable, and environmentally friendly compression solutions can attract new customers and enhance existing relationships. This includes exploring electric-driven compression and other technologies that reduce emissions and improve operational efficiency. The market for advanced compression technologies is expected to grow at a rate of 6-8% annually.
• Strategic Acquisitions: Archrock can pursue strategic acquisitions to expand its geographic footprint, enhance its service offerings, and consolidate its position in the market. Acquiring smaller compression service providers or companies with complementary technologies can accelerate growth and create synergies. The company has a history of successful acquisitions and can leverage its expertise to identify and integrate attractive targets. The market for acquisitions in the compression services sector is active, with numerous opportunities available.
• Focus on ESG Initiatives: As environmental concerns grow, Archrock can differentiate itself by focusing on environmental, social, and governance (ESG) initiatives. This includes reducing emissions from its compression operations, investing in renewable energy sources, and promoting sustainable practices. By demonstrating a commitment to ESG, Archrock can attract environmentally conscious customers and investors. The market for sustainable energy solutions is rapidly expanding, with significant opportunities for companies that prioritize ESG.

What Are AROC's Competitive Advantages?

• Extensive fleet of owned compression equipment, providing a significant barrier to entry.
• Established relationships with key customers in the oil and natural gas industry.
• Technical expertise in designing, operating, and maintaining compression equipment.
• Geographic presence in key natural gas production regions.

What Does AROC Do?

Founded in 1990 and headquartered in Houston, Texas, Archrock, Inc. has evolved into a key player in the U.S. energy infrastructure sector. Originally known as Exterran Holdings, Inc., the company rebranded to Archrock, Inc. in November 2015, marking a strategic shift to emphasize its core competencies in natural gas compression. Archrock operates through two primary segments: Contract Operations and Aftermarket Services. The Contract Operations segment involves designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining a substantial fleet of natural gas compression equipment. This segment provides natural gas compression services to customers in the oil and natural gas industry, supporting the transportation and processing of natural gas. The Aftermarket Services segment offers a range of services, including the sale of parts and components, as well as operation, maintenance, overhaul, and reconfiguration services for customer-owned compression equipment. Archrock's comprehensive service portfolio and extensive asset base position it as a critical partner for companies involved in natural gas production and transportation across the United States.

What Products and Services Does AROC Offer?

• Designs, sources, and owns natural gas compression equipment.
• Installs and operates compression equipment for customers.
• Provides natural gas compression services to the oil and natural gas industry.
• Offers maintenance, repair, and overhaul services for compression equipment.
• Sells parts and components for compression equipment.
• Provides reconfiguration services for compression equipment.

How Does AROC Make Money?

• Generates revenue through contract operations, providing compression services to customers.
• Earns revenue from aftermarket services, including parts sales and maintenance services.
• Leverages its fleet of compression equipment to generate recurring revenue.
• Focuses on long-term customer relationships to ensure stable revenue streams.

What Industry Does AROC Operate In?

Archrock operates within the oil and gas equipment and services industry, a sector characterized by cyclical demand and sensitivity to commodity prices. The industry is currently experiencing growth driven by increased natural gas production and infrastructure development. Key trends include a focus on efficiency, technological innovation, and environmental sustainability. Archrock competes with companies like NOV Inc. (NOV) and Weatherford International plc (WFRD), striving to differentiate itself through service quality, technological capabilities, and customer relationships. The company's focus on natural gas compression positions it favorably in a market driven by increasing demand for natural gas as a cleaner energy source.

Who Are AROC's Key Customers?

• Oil and natural gas exploration and production companies.
• Midstream companies involved in natural gas transportation and processing.
• Utilities that use natural gas for power generation.
• Industrial companies that rely on natural gas for their operations.

Over the past six months, Archrock, Inc. insiders filed 7 SEC Form 4 transactions — 6 sales and 1 purchases. On net that is roughly 311K shares disposed (about $11.9M), a signal worth weighing alongside the fundamentals.

Quarterly Financial Performance: Archrock, Inc.

Revenue for Archrock, Inc. came in at $371.2M during Q2 FY2026. The company recorded net income of $66.7M, with diluted EPS of $0.38. Revenue has contracted over three consecutive quarters, which investors in this mid-cap Energy stock should monitor closely. Across the four most recent quarters, AROC averaged $0.47 in diluted EPS.

AROC Valuation & Market Position

With a $5.73B market cap, Archrock, Inc. sits in the mid-cap segment of the market. Analyst price targets span from $40.00 to $46.00, with a consensus of $42.17. At the current price of $32.72, that implies approximately 29% upside potential. Relative to its peer group, AROC's quantitative score of 58/100 is roughly in line with the peer average of 66/100.

Return on equity for Archrock, Inc. stands at 22.3%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 7.4%, showing how much profit it generates from its asset base. AROC trades at a trailing price-to-earnings ratio of 17.40, above the Energy sector average of ~15.80x. Its free cash flow yield is 3.9%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.41 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 5.2%, the inverse of the P/E and a quick read on earnings relative to price.

Archrock, Inc.'s Piotroski F-Score is 8/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 1.24 places it in the distress zone, a signal of elevated financial risk.

Archrock, Inc. has beaten Wall Street's EPS estimate in 5 of its last 8 reported quarters — more hits than misses. Reported results have landed about 7.1% above estimates on average.

Company Profile

Archrock, Inc. operates in the Oil & Gas Equipment & Services industry within the Energy sector. It is headquartered in Houston, US. The company is led by CEO D. Bradley Childers. AROC has traded publicly since 2007.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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