ARCHROCK INC (AROC) Stock Fundamental Analysis
NYSE:AROC - New York Stock Exchange, Inc. - US03957W1062 - Common Stock - Currency: USD
AROC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 63 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 growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
AROC had positive earnings in the past year.
AROC had a positive operating cash flow in the past year.
AROC had positive earnings in 4 of the past 5 years.
In the past 5 years AROC always reported a positive cash flow from operatings.
1.2 Ratios
AROC has a Return On Assets (5.03%) which is in line with its industry peers.
The Return On Equity of AROC (14.79%) is better than 76.19% of its industry peers.
AROC's Return On Invested Capital of 8.06% is fine compared to the rest of the industry. AROC outperforms 61.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AROC is below the industry average of 8.50%.
The 3 year average ROIC (6.45%) for AROC is below the current ROIC(8.06%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 14.79% | ||
| ROIC | 8.06% |
ROA(3y)3.33%
ROA(5y)1.7%
ROE(3y)9.89%
ROE(5y)5.05%
ROIC(3y)6.45%
ROIC(5y)5.83%
1.3 Margins
AROC's Profit Margin of 16.15% is amongst the best of the industry. AROC outperforms 90.48% of its industry peers.
In the last couple of years the Profit Margin of AROC has grown nicely.
Looking at the Operating Margin, with a value of 33.33%, AROC belongs to the top of the industry, outperforming 96.83% of the companies in the same industry.
In the last couple of years the Operating Margin of AROC has grown nicely.
AROC has a better Gross Margin (61.92%) than 96.83% of its industry peers.
AROC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.33% | ||
| PM (TTM) | 16.15% | ||
| GM | 61.92% |
OM growth 3Y20.43%
OM growth 5Y8.34%
PM growth 3Y61.88%
PM growth 5Y8.11%
GM growth 3Y3.75%
GM growth 5Y2.75%
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.
The number of shares outstanding for AROC has been increased compared to 5 years ago.
Compared to 1 year ago, AROC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.84, we must say that AROC is in the distress zone and has some risk of bankruptcy.
AROC has a worse Altman-Z score (0.84) than 79.37% of its industry peers.
AROC has a Debt/Equity ratio of 1.70. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.70, AROC is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.84 |
ROIC/WACC0.64
WACC12.61%
2.3 Liquidity
A Current Ratio of 1.47 indicates that AROC should not have too much problems paying its short term obligations.
AROC's Current ratio of 1.47 is on the low side compared to the rest of the industry. AROC is outperformed by 71.43% of its industry peers.
AROC has a Quick Ratio of 1.47. 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's Quick ratio of 0.96 is on the low side compared to the rest of the industry. AROC is outperformed by 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 44.58% over the past year.
Measured over the past 5 years, AROC shows a small growth in Earnings Per Share. The EPS has been growing by 5.59% on average per year.
Looking at the last year, AROC shows a very strong growth in Revenue. The Revenue has grown by 20.14%.
The Revenue has been growing slightly by 3.70% on average over the past years.
EPS 1Y (TTM)44.58%
EPS 3Y76.8%
EPS 5Y5.59%
EPS Q2Q%57.69%
Revenue 1Y (TTM)20.14%
Revenue growth 3Y13.99%
Revenue growth 5Y3.7%
Sales Q2Q%29.3%
3.2 Future
AROC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 26.56% yearly.
AROC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.34% yearly.
EPS Next Y56.76%
EPS Next 2Y34.12%
EPS Next 3Y26.56%
EPS Next 5YN/A
Revenue Next Year27%
Revenue Next 2Y17.35%
Revenue Next 3Y9.34%
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.
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
Based on the Price/Earnings ratio of 20.68, the valuation of AROC can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of AROC is on the same level as its industry peers.
When comparing the Price/Earnings ratio of AROC to the average of the S&P500 Index (26.31), we can say AROC is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 13.14, the valuation of AROC can be described as correct.
AROC's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.13, AROC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.68 | ||
| Fwd PE | 13.14 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AROC is valued expensively inside the industry as 88.89% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.71 |
4.3 Compensation for Growth
AROC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
AROC has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as AROC's earnings are expected to grow with 26.56% in the coming years.
PEG (NY)0.36
PEG (5Y)3.7
EPS Next 2Y34.12%
EPS Next 3Y26.56%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.05%, AROC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.73, 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 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.05% |
5.2 History
The dividend of AROC has a limited annual growth rate of 3.62%.
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)3.62%
Div Incr Years2
Div Non Decr Years7
5.3 Sustainability
AROC pays out 59.40% of its income as dividend. This is a bit on the high side, but may be sustainable.
AROC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP59.4%
EPS Next 2Y34.12%
EPS Next 3Y26.56%
24.82
-0.09 (-0.36%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.71%
Inst Owner Change0.45%
Ins Owners2.7%
Ins Owner Change0.4%
Market Cap4.39B
Analysts84.29
Price Target31.49 (26.87%)
Short Float %3.79%
Short Ratio4.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.05% |
Yearly Dividend0.67
Dividend Growth(5Y)3.62%
DP59.4%
Div Incr Years2
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.72%
Min EPS beat(2)5%
Max EPS beat(2)10.45%
EPS beat(4)2
Avg EPS beat(4)-3.11%
Min EPS beat(4)-19.32%
Max EPS beat(4)10.45%
EPS beat(8)5
Avg EPS beat(8)1.35%
EPS beat(12)7
Avg EPS beat(12)11.92%
EPS beat(16)8
Avg EPS beat(16)9.93%
Revenue beat(2)0
Avg Revenue beat(2)-1.96%
Min Revenue beat(2)-3.21%
Max Revenue beat(2)-0.71%
Revenue beat(4)1
Avg Revenue beat(4)-1.46%
Min Revenue beat(4)-3.21%
Max Revenue beat(4)0.09%
Revenue beat(8)4
Avg Revenue beat(8)-0.71%
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)-1.98%
PT rev (3m)-1.98%
EPS NQ rev (1m)-3.69%
EPS NQ rev (3m)11.5%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)14.78%
Revenue NQ rev (1m)2.95%
Revenue NQ rev (3m)4.95%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)4.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.68 | ||
| Fwd PE | 13.14 | ||
| P/S | 3.55 | ||
| P/FCF | N/A | ||
| P/OCF | 10.77 | ||
| P/B | 3.25 | ||
| P/tB | 3.65 | ||
| EV/EBITDA | 10.71 |
EPS(TTM)1.2
EY4.83%
EPS(NY)1.89
Fwd EY7.61%
FCF(TTM)-0.11
FCFYN/A
OCF(TTM)2.3
OCFY9.29%
SpS6.99
BVpS7.64
TBVpS6.8
PEG (NY)0.36
PEG (5Y)3.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.03% | ||
| ROE | 14.79% | ||
| ROCE | 10.9% | ||
| ROIC | 8.06% | ||
| ROICexc | 8.07% | ||
| ROICexgc | 8.4% | ||
| OM | 33.33% | ||
| PM (TTM) | 16.15% | ||
| GM | 61.92% | ||
| FCFM | N/A |
ROA(3y)3.33%
ROA(5y)1.7%
ROE(3y)9.89%
ROE(5y)5.05%
ROIC(3y)6.45%
ROIC(5y)5.83%
ROICexc(3y)6.45%
ROICexc(5y)5.83%
ROICexgc(3y)6.61%
ROICexgc(5y)5.97%
ROCE(3y)8.72%
ROCE(5y)7.88%
ROICexcg growth 3Y21.54%
ROICexcg growth 5Y7.48%
ROICexc growth 3Y20.63%
ROICexc growth 5Y7.9%
OM growth 3Y20.43%
OM growth 5Y8.34%
PM growth 3Y61.88%
PM growth 5Y8.11%
GM growth 3Y3.75%
GM growth 5Y2.75%
F-Score7
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.68 | ||
| Cap/Depr | 200.63% | ||
| Cap/Sales | 34.57% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.19% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 0.84 |
F-Score7
WACC12.61%
ROIC/WACC0.64
Cap/Depr(3y)167.19%
Cap/Depr(5y)125.78%
Cap/Sales(3y)29.85%
Cap/Sales(5y)23.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)44.58%
EPS 3Y76.8%
EPS 5Y5.59%
EPS Q2Q%57.69%
EPS Next Y56.76%
EPS Next 2Y34.12%
EPS Next 3Y26.56%
EPS Next 5YN/A
Revenue 1Y (TTM)20.14%
Revenue growth 3Y13.99%
Revenue growth 5Y3.7%
Sales Q2Q%29.3%
Revenue Next Year27%
Revenue Next 2Y17.35%
Revenue Next 3Y9.34%
Revenue Next 5YN/A
EBIT growth 1Y42.48%
EBIT growth 3Y37.29%
EBIT growth 5Y12.34%
EBIT Next Year116.23%
EBIT Next 3Y35.92%
EBIT Next 5YN/A
FCF growth 1Y69.23%
FCF growth 3Y-20.33%
FCF growth 5YN/A
OCF growth 1Y89.78%
OCF growth 3Y21.86%
OCF growth 5Y8.17%