AROC Stock Risk & Deep Value Analysis
Archrock Inc
Energy • Oil & Gas Equipment & Services
DVR Score
out of 10
What You Need to Know About AROC Stock
We analyzed Archrock Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran AROC through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
AROC Risk Analysis & Red Flags
What Could Go Wrong
A prolonged and significant decline in natural gas prices could severely impact Archrock's fleet utilization rates and pricing power, directly leading to lower revenue and compressed margins, thereby eroding its strong profitability and cash generation.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Low
Red Flags
- ⚠
CFO Doug Aron's significant share sales, although linked to retirement, can signal a lack of long-term conviction.
- ⚠
Reliance on commodity price volatility for demand stability.
- ⚠
Capital-intensive business model limits inherent exponential growth potential.
Upcoming Risk Events
- 📅
Significant downturn in natural gas prices or demand
- 📅
Slower-than-expected fleet utilization or pricing pressure from competitors
When to Reconsider
- 🚪
Exit if fleet utilization rates drop below 80% for two consecutive quarters.
- 🚪
Sell if quarterly adjusted EBITDA declines YoY for two consecutive quarters.
- 🚪
Exit if natural gas prices fall below $2.00/MMBtu for an extended period.
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What Does Archrock Inc (AROC) Do?
Market Cap
$6.36B
Sector
Energy
Industry
Oil & Gas Equipment & Services
Employees
1,300
Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components, as well as provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment; and operates as a packager of reciprocal and rotary screw natural gas compressors for sale or on a contract compression basis. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.
Visit Archrock Inc WebsiteInvestment Thesis
Archrock represents a high-quality, stable investment in the critical U.S. natural gas compression infrastructure. Its strong financial health, consistent operational execution, and prudent capital allocation make it an attractive income and stability play within the energy sector, benefiting from sustained natural gas demand. While lacking 10x growth potential, it offers resilience and shareholder returns.
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AROC Price Targets & Strategy
12-Month Target
$40.00
Bull Case
$45.00
Bear Case
$32.00
Valuation Basis
Based on 9.0x FY2026e EV/EBITDA on midpoint $890M Adjusted EBITDA and ~$1.6B estimated net debt.
Entry Strategy
Consider accumulation on dips towards the $34-$36 range, which represents recent support levels. Dollar-cost averaging is prudent given the stock's lower volatility.
Exit Strategy
Consider taking profits around $42-$45, representing the upper end of analyst targets. A stop-loss order at $32 would protect against significant downturns.
Portfolio Allocation
2-4% for a moderate risk tolerance, focused on income and stability rather than exponential growth.
Price Targets & Strategy
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Is AROC Financially Healthy?
Valuation
P/E Ratio
19.74
Forward P/E
18.70
PEG Ratio
0.26
Profitability
Gross Margin
65.81%
Operating Margin
36.37%
Net Margin
21.63%
Return on Equity
22.73%
Revenue Growth
28.70%
EPS
$1.85
Balance Sheet
Current Ratio
1.54
Quick Ratio
0.99
Debt/Equity
1.62
Total Debt
$2.40B
Cash Flow
Free Cash Flow
$147.00M
EBITDA
$890.00M
Other
Beta (Volatility)
0.92
Dividend Yield
2.43%
Does AROC Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable
Moat Sources
3 Identified
Archrock's moat is durable due to the high capital intensity required to build and maintain a large compression fleet, creating barriers to entry. Existing infrastructure and long-term customer contracts also contribute to high switching costs and stable revenue streams.
Moat Erosion Risks
- •Significant technological advancements rendering current compression technology obsolete.
- •Aggressive shifts in energy policy away from natural gas, reducing long-term demand.
- •New entrants with lower-cost structures or disruptive technologies (less likely given capital requirements).
AROC Competitive Moat Analysis
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AROC Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (no specific data provided, but generally stable for a utility-like stock)
Institutional Sentiment
Positive (Analyst consensus 'Buy' rating; Mizuho upgrade to Outperform with target increase from $32 to $38).
Insider Activity (Form 4)
CFO Doug S. Aron sold 71,500 shares on Mar 27, 2026 at avg $35.61 ($2.55M) and 98,050 shares on Mar 30, 2026 at avg $34.76 ($3.41M), totaling 169,550 shares ($5.95M). Sales are attributed to retirement plans.
Options Flow
Normal options activity (no specific unusual activity detailed in research).
Earnings Intelligence
Next Earnings
2026-05-04
Surprise Probability
Medium
Historical Earnings Pattern
Based on Q4 2025's significant EPS beat, the company has demonstrated an ability to exceed expectations, potentially leading to positive short-term price reactions on strong reports.
Key Metrics to Watch
Competitive Position
Top Competitor
USA Compression (USAC)
Market Share Trend
Stable, maintaining leadership in the US natural gas compression market; potentially gaining incrementally through strategic fleet expansion.
Valuation vs Peers
Trading at a fair valuation (approx. 8.9x EV/EBITDA) compared to peers in the natural gas compression sector, which typically range from 7x-10x.
Competitive Advantages
- •Largest fleet of compression equipment in the U.S.
- •Operational scale and efficiency resulting in cost advantages.
- •Established customer relationships and integrated service offerings.
Market Intelligence
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What Could Drive AROC Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings report on May 4, 2026
- •Successful transition plan and appointment of new CFO by end-2026
Medium-Term (6-18 months)
- •Continued fleet expansion and modernization via 2026 capex ($250-275M)
- •Sustained strength in natural gas demand and favorable pricing environment
Long-Term (18+ months)
- •Potential industry consolidation or strategic M&A opportunities
- •Evolution of natural gas infrastructure and associated service demand
Catalysts & Growth Drivers
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What's the Bull Case for AROC?
- ✓
Sustained strong natural gas demand and favorable pricing environment.
- ✓
Maintenance or improvement in fleet utilization and contract pricing.
- ✓
Announcements of new large-scale contracts or strategic acquisitions.
Bull Case Analysis
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Competing with AROC
See how Archrock Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Archrock Inc AROC | $6.4B | 3.3 | 19.7 | — | 21.6% | 28.7% | |
Chevron Corp CVX | $317.8B | 0.1 | 20.3 | — | — | — | Compare → |
EOG Resources Inc EOG | — | 1.2 | — | — | — | — | Compare → |
Slb NV SLB | $79.4B | 0.9 | 23.5 | $40.0B | 9.4% | -1.6% | Compare → |
Exxon Mobil Corp XOM | $644.6B | 2.0 | 22.3 | $85.1B | 8.9% | -4.5% | Compare → |
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How Archrock Inc Makes Money
Archrock Inc. is a leading provider of natural gas compression services in the United States. The company owns, operates, and maintains a large fleet of compression equipment crucial for moving natural gas through pipelines from production sites to processing facilities and consumers. They generate revenue by contracting these compression services to natural gas producers, midstream companies, and other energy operators, ensuring efficient and reliable gas transport.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Archrock Inc (AROC)?
As of April 18, 2026, Archrock Inc has a DVR Score of 3.3 out of 10, placing it in the "Risk Trap" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Archrock Inc?
Archrock Inc's market capitalization is approximately $6.4B. The company operates in the Energy sector within the Oil & Gas Equipment & Services industry.
What ticker symbol does Archrock Inc use?
AROC is the ticker symbol for Archrock Inc. The company trades on the NYQ.
What is the risk level for AROC stock?
Our analysis rates Archrock Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of AROC?
Archrock Inc currently has a price-to-earnings (P/E) ratio of 19.7. This is in line with broader market averages.
Does Archrock Inc pay a dividend?
Yes, Archrock Inc pays a dividend with a current yield of approximately 2.43%.
Is Archrock Inc's revenue growing?
Archrock Inc has reported revenue growth of 28.7%. The company is showing strong top-line momentum.
Is AROC stock profitable?
Archrock Inc has a profit margin of 21.6%. This indicates strong profitability.
How often is the AROC DVR analysis updated?
Our AI-powered analysis of Archrock Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 18, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for AROC (Archrock Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.