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 61 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 is growing strongly while it is still valued neutral. This is a good combination! Finally AROC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year AROC was profitable.
In the past year AROC had a positive cash flow from operations.
Of the past 5 years AROC 4 years were profitable.
In the past 5 years AROC always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 5.03%, AROC perfoms like the industry average, outperforming 59.02% of the companies in the same industry.
Looking at the Return On Equity, with a value of 14.79%, AROC is in the better half of the industry, outperforming 78.69% of the companies in the same industry.
AROC has a better Return On Invested Capital (8.06%) than 65.57% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AROC is in line with the industry average of 8.05%.
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 has a Profit Margin of 16.15%. This is amongst the best in the industry. AROC outperforms 90.16% of its industry peers.
AROC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 33.33%, AROC belongs to the best of the industry, outperforming 96.72% of the companies in the same industry.
AROC's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 61.92%, AROC belongs to the best of the industry, outperforming 96.72% 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 | 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
AROC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AROC has more shares outstanding
AROC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AROC has an improved debt to assets ratio.
2.2 Solvency
AROC has an Altman-Z score of 0.76. This is a bad value and indicates that AROC is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AROC (0.76) is worse than 75.41% 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.
AROC has a Debt to Equity ratio of 1.70. This is amonst the worse of the industry: AROC underperforms 85.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.76 |
ROIC/WACC0.96
WACC8.4%
2.3 Liquidity
A Current Ratio of 1.47 indicates that AROC should not have too much problems paying its short term obligations.
AROC has a Current ratio of 1.47. This is in the lower half of the industry: AROC underperforms 70.49% of its industry peers.
A Quick Ratio of 0.96 indicates that AROC may have some problems paying its short term obligations.
AROC has a Quick ratio of 0.96. This is amonst the worse of the industry: AROC underperforms 80.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
AROC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.11%, which is quite impressive.
AROC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.59% yearly.
Looking at the last year, AROC shows a quite strong growth in Revenue. The Revenue has grown by 16.89% in the last year.
AROC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.70% yearly.
EPS 1Y (TTM)51.11%
EPS 3Y76.8%
EPS 5Y5.59%
EPS Q2Q%69.57%
Revenue 1Y (TTM)16.89%
Revenue growth 3Y13.99%
Revenue growth 5Y3.7%
Sales Q2Q%41.63%
3.2 Future
Based on estimates for the next years, AROC will show a very strong growth in Earnings Per Share. The EPS will grow by 25.65% on average per year.
The Revenue is expected to grow by 9.64% on average over the next years. This is quite good.
EPS Next Y51.74%
EPS Next 2Y32.17%
EPS Next 3Y25.65%
EPS Next 5YN/A
Revenue Next Year27.43%
Revenue Next 2Y17.5%
Revenue Next 3Y9.64%
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
AROC is valuated correctly with a Price/Earnings ratio of 16.77.
The rest of the industry has a similar Price/Earnings ratio as AROC.
The average S&P500 Price/Earnings ratio is at 27.24. AROC is valued slightly cheaper when compared to this.
AROC is valuated correctly with a Price/Forward Earnings ratio of 12.44.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AROC is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of AROC to the average of the S&P500 Index (36.42), we can say AROC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.77 | ||
| Fwd PE | 12.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AROC is valued expensively inside the industry as 85.25% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.12 |
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 excellent profitability rating of AROC may justify a higher PE ratio.
AROC's earnings are expected to grow with 25.65% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.32
PEG (5Y)3
EPS Next 2Y32.17%
EPS Next 3Y25.65%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.74%, AROC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.89, AROC pays a better dividend. On top of this AROC pays more dividend than 83.61% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, AROC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.74% |
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 2Y32.17%
EPS Next 3Y25.65%
22.81
+0.33 (+1.47%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.71%
Inst Owner Change0.05%
Ins Owners2.7%
Ins Owner Change-0.18%
Market Cap4.03B
Analysts84.29
Price Target31.49 (38.05%)
Short Float %2.96%
Short Ratio3.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.74% |
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)0%
PT rev (3m)-2.76%
EPS NQ rev (1m)-2.2%
EPS NQ rev (3m)-7%
EPS NY rev (1m)-3.34%
EPS NY rev (3m)-3.5%
Revenue NQ rev (1m)0.94%
Revenue NQ rev (3m)3.9%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)1.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.77 | ||
| Fwd PE | 12.44 | ||
| P/S | 3.26 | ||
| P/FCF | N/A | ||
| P/OCF | 9.9 | ||
| P/B | 2.99 | ||
| P/tB | 3.35 | ||
| EV/EBITDA | 10.12 |
EPS(TTM)1.36
EY5.96%
EPS(NY)1.83
Fwd EY8.04%
FCF(TTM)-0.11
FCFYN/A
OCF(TTM)2.3
OCFY10.1%
SpS6.99
BVpS7.64
TBVpS6.8
PEG (NY)0.32
PEG (5Y)3
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 | 0.76 |
F-Score7
WACC8.4%
ROIC/WACC0.96
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)51.11%
EPS 3Y76.8%
EPS 5Y5.59%
EPS Q2Q%69.57%
EPS Next Y51.74%
EPS Next 2Y32.17%
EPS Next 3Y25.65%
EPS Next 5YN/A
Revenue 1Y (TTM)16.89%
Revenue growth 3Y13.99%
Revenue growth 5Y3.7%
Sales Q2Q%41.63%
Revenue Next Year27.43%
Revenue Next 2Y17.5%
Revenue Next 3Y9.64%
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%