ARCHROCK INC (AROC)
US03957W1062 - Common Stock
We assign a fundamental rating of 5 out of 10 to AROC. AROC was compared to 65 industry peers in the Energy Equipment & Services industry. AROC scores excellent on profitability, but 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.
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
Looking at the Return On Assets, with a value of 4.48%, AROC is in line with its industry, outperforming 56.92% of the companies in the same industry.
AROC has a better Return On Equity (13.65%) than 69.23% of its industry peers.
The Return On Invested Capital of AROC (9.00%) is better than 63.08% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AROC is below the industry average of 8.42%.
The last Return On Invested Capital (9.00%) for AROC is above the 3 year average (5.35%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.48% | ||
| ROE | 13.65% | ||
| ROIC | 9% |
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's Profit Margin of 9.74% is fine compared to the rest of the industry. AROC outperforms 75.38% of its industry peers.
AROC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 25.13%, AROC belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
In the last couple of years the Operating Margin of AROC has grown nicely.
With an excellent Gross Margin value of 53.91%, AROC belongs to the best of the industry, outperforming 93.85% 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 | 25.13% | ||
| PM (TTM) | 9.74% | ||
| GM | 53.91% |
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) just above the Cost of Capital (WACC), AROC is creating some value.
AROC has more shares outstanding than it did 1 year ago.
AROC has more shares outstanding than it did 5 years ago.
AROC has about the same debt/assets ratio as last year.
2.2 Solvency
Based on the Altman-Z score of 0.61, we must say that AROC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AROC (0.61) is worse than 78.46% of its industry peers.
The Debt to FCF ratio of AROC is 137.16, which is on the high side as it means it would take AROC, 137.16 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AROC (137.16) is worse than 69.23% of its industry peers.
A Debt/Equity ratio of 1.82 is on the high side and indicates that AROC has dependencies on debt financing.
With a Debt to Equity ratio value of 1.82, AROC is not doing good in the industry: 89.23% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.82 | ||
| Debt/FCF | 137.16 | ||
| Altman-Z | 0.61 |
ROIC/WACC1.15
WACC7.84%
2.3 Liquidity
AROC has a Current Ratio of 1.40. This is a normal value and indicates that AROC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.40, AROC is doing worse than 70.77% of the companies in the same industry.
A Quick Ratio of 0.86 indicates that AROC may have some problems paying its short term obligations.
AROC has a Quick ratio of 0.86. This is amonst the worse of the industry: AROC underperforms 84.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.4 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
AROC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 123.33%, which is quite impressive.
AROC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.01% yearly.
The Revenue has grown by 44.30% in the past year. This is a very strong growth!
AROC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.83% yearly.
EPS 1Y (TTM)123.33%
EPS 3Y42.82%
EPS 5Y12.01%
EPS growth Q2Q162.5%
Revenue 1Y (TTM)44.3%
Revenue growth 3Y4.21%
Revenue growth 5Y1.83%
Revenue growth Q2Q18.61%
3.2 Future
AROC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 34.22% yearly.
AROC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.04% yearly.
EPS Next Y48.18%
EPS Next 2Y34.22%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year9.86%
Revenue Next 2Y8.04%
Revenue Next 3YN/A
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.
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
AROC is valuated quite expensively with a Price/Earnings ratio of 30.16.
Compared to the rest of the industry, the Price/Earnings ratio of AROC is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.28, AROC is valued at the same level.
A Price/Forward Earnings ratio of 20.36 indicates a rather expensive valuation of AROC.
72.31% of the companies in the same industry are cheaper than AROC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.88, AROC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.16 | ||
| Fwd PE | 20.36 |
4.2 Price Multiples
AROC's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AROC is more expensive than 70.77% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AROC is valued a bit more expensive than the industry average as 69.23% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 273.36 | ||
| EV/EBITDA | 10.03 |
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 34.22% in the coming years.
PEG (NY)0.63
PEG (5Y)2.51
EPS Next 2Y34.22%
EPS Next 3YN/A
5. Dividend
5.1 Amount
AROC has a Yearly Dividend Yield of 3.30%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.36, AROC pays a better dividend. On top of this AROC pays more dividend than 89.23% of the companies listed in the same industry.
AROC's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
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 Years1
Div Non Decr Years6
5.3 Sustainability
80.58% of the earnings are spent on dividend by AROC. This is not a sustainable payout ratio.
AROC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP80.58%
EPS Next 2Y34.22%
EPS Next 3YN/A
ARCHROCK INC
NYSE:AROC (5/3/2024, 7:04:00 PM)
After market: 20.35 +0.14 (+0.69%)20.21
+0.18 (+0.9%)
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 Cap3.16B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
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)
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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)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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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 | 30.16 | ||
| Fwd PE | 20.36 | ||
| 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)0.63
PEG (5Y)2.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.48% | ||
| ROE | 13.65% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 25.13% | ||
| PM (TTM) | 9.74% | ||
| GM | 53.91% | ||
| 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 Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.82 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.4 | ||
| Quick Ratio | 0.86 | ||
| 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)
Growth
EPS 1Y (TTM)123.33%
EPS 3Y42.82%
EPS 5Y
EPS growth Q2Q
EPS Next Y48.18%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)44.3%
Revenue growth 3Y4.21%
Revenue growth 5Y
Revenue growth 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