Archrock, Inc. (AROC)
For informational purposes only. Not financial advice. Analysis by Sedat Aydin, Founder & Editor-in-Chief | AI-powered analysis. Data sourced from SEC filings and institutional-grade financial providers. Editorially reviewed. Not financial advice.
Archrock, Inc. (AROC) trades at $37.02 with AI Score 46/100 (Weak). Archrock, Inc. is an energy infrastructure company providing natural gas compression services in the United States. Market cap: $6.49B, Sector: Energy.
Last analyzed: Feb 9, 2026Archrock, Inc. (AROC) Energy Operations & Outlook
Archrock, Inc. (AROC) delivers vital natural gas compression services, boasting a robust 64.0% gross margin and a 2.50% dividend yield. With a strategic focus on contract operations and aftermarket services, Archrock is positioned to capitalize on the growing demand for energy infrastructure in the U.S.
Investment Thesis
Archrock presents a notable research candidate due to its strategic position in the natural gas compression market and its consistent profitability. With a profit margin of 18.4% and a gross margin of 64.0%, the company demonstrates strong operational efficiency. The company's dividend yield of 2.50% provides an attractive income stream for investors. Key value drivers include the increasing demand for natural gas compression services driven by rising natural gas production and infrastructure development. Ongoing investments in its compression fleet and aftermarket service capabilities are expected to fuel future growth. The company's P/E ratio of 21.10 suggests a reasonable valuation relative to its earnings.
Based on FMP financials and quantitative analysis
Key Highlights
- Market capitalization of $5.62 billion reflects investor confidence in Archrock's market position and growth potential.
- Gross margin of 64.0% demonstrates efficient operations and strong pricing power in the natural gas compression market.
- Profit margin of 18.4% indicates effective cost management and profitability.
- Dividend yield of 2.50% provides a steady income stream for investors.
- Beta of 0.91 suggests lower volatility compared to the broader market, making it a relatively stable investment.
Competitors & Peers
Strengths
- Strong market position in natural gas compression services.
- High gross margin of 64.0% indicates efficient operations.
- Recurring revenue from long-term contracts.
- Comprehensive aftermarket service offerings.
Weaknesses
- Dependence on the oil and natural gas industry.
- Exposure to commodity price fluctuations.
- Capital-intensive business model.
- Limited geographic diversification.
Catalysts
- Ongoing: Increasing natural gas production in the United States driving demand for compression services.
- Ongoing: Infrastructure development projects expanding the need for compression equipment.
- Upcoming: Potential acquisitions of smaller competitors to expand market share.
- Ongoing: Technological advancements leading to more efficient compression solutions.
Risks
- Potential: Fluctuations in oil and natural gas prices impacting demand for compression services.
- Potential: Increased competition from other compression service providers.
- Potential: Changes in environmental regulations increasing compliance costs.
- Potential: Economic downturn reducing energy demand.
Growth Opportunities
- Expansion of Compression Fleet: Archrock can grow by strategically expanding its compression fleet to meet increasing demand in key shale basins. Investing in new, efficient compression units will allow the company to capture a larger share of the market. The market for natural gas compression is expected to grow as natural gas production increases, driven by both domestic consumption and export opportunities. This expansion will enhance Archrock's revenue streams and solidify its position as a leading provider of compression services.
- Geographic Expansion: Expanding operations into new geographic regions presents a significant growth opportunity for Archrock. By targeting areas with growing natural gas production, such as emerging shale plays, the company can diversify its revenue base and reduce its reliance on existing markets. This expansion requires careful market analysis and strategic partnerships to ensure successful entry and sustainable growth. The timeline for geographic expansion is dependent on identifying suitable markets and securing necessary infrastructure and resources.
- Aftermarket Services Growth: Archrock can capitalize on the growing demand for aftermarket services by expanding its service offerings and geographic reach. Providing comprehensive maintenance, repair, and overhaul services for compression equipment can generate recurring revenue streams and enhance customer loyalty. The market for aftermarket services is substantial, as operators seek to optimize the performance and extend the lifespan of their existing equipment. Investing in skilled technicians and expanding service facilities will be crucial for capturing this growth opportunity.
- Technological Innovation: Investing in research and development to develop and deploy advanced compression technologies can provide a competitive advantage for Archrock. Developing more efficient and environmentally friendly compression solutions can attract customers seeking to reduce their operating costs and environmental footprint. This includes exploring electric compression and other innovative technologies. The timeline for technological innovation is ongoing, with continuous efforts to improve existing technologies and develop new solutions.
- Strategic Acquisitions: Pursuing strategic acquisitions of smaller compression service providers or related businesses can accelerate Archrock's growth and expand its market presence. Acquiring companies with complementary assets or geographic footprints can create synergies and enhance Archrock's overall competitiveness. Careful due diligence and integration planning are essential for successful acquisitions. The timing and scope of acquisitions will depend on market conditions and available opportunities.
Opportunities
- Expansion into new geographic regions.
- Increased demand for natural gas compression services.
- Technological innovation in compression equipment.
- Strategic acquisitions of smaller competitors.
Threats
- Decline in oil and natural gas prices.
- Increased competition from other compression service providers.
- Stringent environmental regulations.
- Economic downturn affecting energy demand.
Competitive Advantages
- Specialized Expertise: Deep technical knowledge and experience in natural gas compression.
- Extensive Infrastructure: Large fleet of compression equipment strategically located in key basins.
- Long-Term Contracts: Recurring revenue from long-term contracts with customers.
- Aftermarket Services: Comprehensive aftermarket services provide a steady stream of revenue and enhance customer relationships.
About AROC
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 in its business focus. 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 fleet of natural gas compression equipment. This segment provides essential natural gas compression services to customers in the oil and natural gas industry. The Aftermarket Services segment offers a comprehensive suite of services, including the sale of parts and components, as well as operation, maintenance, overhaul, and reconfiguration services for customer-owned compression equipment. With approximately 1,300 employees, Archrock is committed to providing reliable and efficient solutions to its clients, supporting the critical infrastructure that enables the production and transportation of natural gas across the United States.
What They Do
- Designs and sources natural gas compression equipment.
- Owns and installs natural gas compression units.
- Operates and services its owned fleet of compression equipment.
- Repairs and maintains compression equipment.
- Sells parts and components for compression units.
- Provides operation and maintenance services for customer-owned equipment.
- Offers overhaul and reconfiguration services for compression equipment.
Business Model
- Generates revenue through contract operations by providing natural gas compression services.
- Earns revenue from aftermarket services, including parts sales and maintenance contracts.
- Focuses on long-term contracts with customers in the oil and natural gas industry.
Industry Context
Archrock operates within the oil and gas equipment and services industry, which is experiencing increased demand due to rising natural gas production in the United States. The industry is characterized by technological advancements, stringent environmental regulations, and fluctuating commodity prices. Archrock competes with companies that offer similar compression services and aftermarket support. The company's focus on maintaining a modern and efficient compression fleet, coupled with its comprehensive service offerings, allows it to maintain a competitive edge. Key industry trends include the adoption of more efficient compression technologies and the increasing importance of aftermarket services for maintaining existing infrastructure.
Key Customers
- Oil and natural gas exploration and production companies.
- Midstream companies that transport and process natural gas.
- Utilities that distribute natural gas to end-users.
Financials
Chart & Info
Archrock, Inc. (AROC) stock price: $37.02 (+0.00, +0.00%)
Latest News
-
EIA Expects US LNG Export to Rise in 2026: Can Archrock Gain?
Zacks · Mar 13, 2026
-
Chevron to Sell Angola Offshore Stakes to Energean for $260M
Zacks · Mar 13, 2026
-
Archrock Announces Redemption of All Outstanding 6.25% Senior Notes Due 2028
globenewswire.com · Feb 26, 2026
-
Stifel Maintains Buy on Archrock, Raises Price Target to $40
benzinga · Feb 26, 2026
Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for AROC.
Price Targets
Consensus target: $40.00
MoonshotScore
What does this score mean?
The MoonshotScore rates AROC's growth potential on a scale of 0-100 across multiple factors including innovation, market disruption, financial health, and momentum.
Competitors & Peers
Latest News
EIA Expects US LNG Export to Rise in 2026: Can Archrock Gain?
Chevron to Sell Angola Offshore Stakes to Energean for $260M
Archrock Announces Redemption of All Outstanding 6.25% Senior Notes Due 2028
Stifel Maintains Buy on Archrock, Raises Price Target to $40
Latest Archrock, Inc. Analysis
Archrock, Inc. Stock: Key Questions Answered
What does Archrock, Inc. do?
Archrock, Inc. is a leading energy infrastructure company that provides natural gas compression services to the oil and natural gas industry in the United States. The company operates through two segments: Contract Operations and Aftermarket Services. Through Contract Operations, Archrock designs, sources, owns, installs, operates, services, repairs, and maintains its owned fleet of natural gas compression equipment. The Aftermarket Services segment offers parts sales, operation, maintenance, overhaul, and reconfiguration services for customer-owned compression equipment, supporting the operational needs of its clients.
Is AROC stock worth researching?
AROC stock presents a potentially attractive investment opportunity, supported by its strong gross margin of 64.0% and a dividend yield of 2.50%. The company's strategic focus on natural gas compression services positions it well to benefit from increasing natural gas production. However, investors may want to evaluate the risks associated with the oil and gas industry, including commodity price volatility and regulatory changes. AROC's P/E ratio of 21.10 should be evaluated in comparison to its peers and historical performance to determine if it is fairly valued.
What are the main risks for AROC?
Archrock faces several key risks, including its dependence on the cyclical oil and natural gas industry, which is subject to commodity price volatility. Increased competition from other compression service providers could put pressure on pricing and market share. Changes in environmental regulations could increase compliance costs and limit operational flexibility. Additionally, an economic downturn could reduce energy demand, negatively impacting Archrock's revenue and profitability. These factors should be carefully considered when evaluating an investment in AROC.
What are the key factors to evaluate for AROC?
Archrock, Inc. (AROC) currently holds an AI score of 46/100, indicating low score. The stock trades at a P/E of 19.1x, below the S&P 500 average (~20-25x), potentially signaling value. Analysts target $40.00 (+8% from $37.02). Key strength: Strong market position in natural gas compression services.. Primary risk to monitor: Potential: Fluctuations in oil and natural gas prices impacting demand for compression services.. This is not financial advice.
How frequently does AROC data refresh on this page?
AROC prices update in real time during U.S. market hours (9:30 AM-4:00 PM ET, weekdays). Fundamentals refresh after quarterly or annual filings. Analyst ratings and AI insights update daily. News is aggregated continuously from financial sources.
What has driven AROC's recent stock price performance?
Recent price movement in Archrock, Inc. (AROC) can be influenced by earnings results, analyst revisions, sector rotation, and broader market sentiment. The current analyst target of $40.00 implies 8% upside from here. Notable catalyst: Strong market position in natural gas compression services.. Check the News and Technical Analysis tabs for the latest drivers. Past performance does not predict future results.
Should investors consider AROC overvalued or undervalued right now?
Determining whether Archrock, Inc. (AROC) is overvalued or undervalued requires examining multiple metrics. Its P/E ratio is 19.1. Analysts target $40.00 (+8% from current price), suggesting analysts see the stock near fair value. Compare valuation ratios (P/E, P/S, EV/EBITDA) against sector peers for a comprehensive view.
What research should beginners do before buying AROC?
Before investing in Archrock, Inc. (AROC), research these four areas: (1) the company's revenue model and competitive position (see Company Overview), (2) financial health through revenue growth, margins, and cash flow (see MoonshotScore), (3) what Wall Street analysts recommend and their price targets (see Analyst tab), and (4) specific risk factors that could impact the stock (see Risk Factors section).
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.
Official Resources
Data provided for informational purposes only.
- Stock data pending update. Financial data is based on the most recent available information.