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 substantial decline in U.S. natural gas production or persistent low commodity prices would directly reduce demand for Archrock's compression services, negatively impacting its utilization rates, revenue, and ability to grow its dividend.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
Medium
Execution
Low
Regulatory
Low
Red Flags
- ⚠
CFO sold 98,050 shares in the last 90 days, which can signal a lack of conviction or personal financial planning.
- ⚠
Q4 2025 revenue slightly missed estimates, which warrants monitoring for Q1 2026.
Upcoming Risk Events
- 📅
Significant downturn in natural gas prices or drilling activity
- 📅
Unexpected operational disruptions or safety incidents
When to Reconsider
- 🚪
Exit if quarterly revenue growth turns negative year-over-year for two consecutive quarters.
- 🚪
Sell if free cash flow becomes consistently negative, indicating unsustainable operations or capital allocation.
- 🚪
Consider exit if management provides materially reduced full-year guidance for profitability or CapEx efficiency.
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What Does Archrock Inc (AROC) Do?
Market Cap
$6.84B
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 fundamentally sound investment for investors seeking stable income and exposure to the essential natural gas infrastructure sector. While not a 10x growth prospect, its operational excellence, strong cash generation, healthy balance sheet, and consistent dividend increases offer a compelling profile for conservative, yield-focused portfolios that anticipate continued demand for natural gas in the U.S.
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AROC Price Targets & Strategy
12-Month Target
$40.00
Bull Case
$44.00
Bear Case
$34.20
Valuation Basis
20x forward P/E applied to the higher end of the FY26 EPS consensus ($2.00) implies a $40.00 target.
Entry Strategy
Dollar-cost average on any dips towards $37.00, considering its stable dividend yield and fair valuation around the current price.
Exit Strategy
Consider taking profits above $42.00 if the stock approaches overbought levels; a stop-loss at $35.00 could manage downside risk.
Portfolio Allocation
2-3% for moderate risk tolerance, primarily for income and stability rather than aggressive growth.
Price Targets & Strategy
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Is AROC Financially Healthy?
Valuation
P/E Ratio
21.22
Forward P/E
18.79
EV/EBITDA
2.90
PEG Ratio
1.64
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
Other
Beta (Volatility)
0.95
Dividend Yield
2.26%
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 fleet of compression assets, the specialized technical expertise needed for operations, and the sticky customer relationships forged through integrated services. New entrants face significant barriers.
Moat Erosion Risks
- •Long-term shift away from natural gas as a primary energy source, reducing demand for compression.
- •Technological advancements that drastically reduce the need for or change the nature of compression services.
AROC Competitive Moat Analysis
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AROC Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral, as discussions are likely focused on dividend yield and energy sector stability rather than disruptive growth.
Institutional Sentiment
Neutral. Analyst consensus is 'Moderate Buy' at the current price, indicating fair valuation rather than significant undervaluation or overbought conditions. No specific upgrades/downgrades provided.
Insider Activity (Form 4)
CFO sold 98,050 shares (exact date/value not specified) within the last 90 days. No CEO/CFO buys reported.
Options Flow
Normal options activity observed; no unusual institutional positioning indicated by current research.
Earnings Intelligence
Next Earnings
2026-05-05
Surprise Probability
Medium
Historical Earnings Pattern
Archrock typically reacts positively to earnings beats, especially with strong cash flow generation and dividend increases, but stock movements are generally incremental due to its mature industry profile.
Key Metrics to Watch
Competitive Position
Top Competitor
Not explicitly detailed in research, but peer companies often include Universal Compression (USA) and other regional compression service providers.
Market Share Trend
Stable (no data provided to suggest otherwise, typical for a mature market leader).
Valuation vs Peers
Trading around 19x TTM P/E and 18.8x forward P/E, AROC likely trades in line with or at a slight premium to its direct, capital-intensive peers, reflecting its strong operational execution and dividend policy.
Competitive Advantages
- •Efficient Scale and extensive asset base across key U.S. basins
- •Operational excellence and strong service delivery reputation
- •Long-standing 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 (expected May 5, 2026)
- •Quarterly Dividend Payment ($0.22/share payable May 19, 2026)
Medium-Term (6-18 months)
- •Sustained strong U.S. natural gas production growth
- •Continued operational efficiency improvements
Long-Term (18+ months)
- •Energy infrastructure modernization and expansion
- •Strategic acquisitions for incremental market share gains
Catalysts & Growth Drivers
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What's the Bull Case for AROC?
- ✓
Acceleration in U.S. natural gas production growth forecasts.
- ✓
Any further expansion in net margins and free cash flow per share.
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 | $6.8B | 3.5 | 21.2 | $1.5B | 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, primarily operating in the United States. The company leases and operates a large fleet of specialized compression equipment, which is critical for moving natural gas from production wells to processing plants and through pipelines. Archrock also offers aftermarket services, providing parts and maintenance for customer-owned compression equipment. Its revenue is primarily generated from long-term contracts for these essential services, making it an asset-heavy, service-oriented business within the energy infrastructure sector.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Archrock Inc (AROC)?
As of May 4, 2026, Archrock Inc has a DVR Score of 3.5 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 $6.8B. 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 21.2. 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 2.26%.
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 May 4, 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.