Quality Investor

Archrock, Inc.

Rank #399Op. Leverage

AROC · NYSE · Energy

Archrock, Inc. (AROC) — Rank #399 by gross profitability (GP/assets 0.16) · ROE 20.8% · Piotroski F-Score 8 / 9.

As-of 2026-09-15 · CIK 0001389050 · all metrics point-in-time as of the filing date.

About

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States.

Show more

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. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. Archrock, Inc. was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015.

The company was founded in 1990 and is headquartered in Houston, Texas.

Industry
Oil & Gas Equipment & Services
Sector
Energy
Filer Category
Large accelerated filer
Fiscal Year End
December 31

Price History

AROC+432.3% · +39.7% CAGRSPY+80.5% · +12.5% CAGR

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

$5.30B

P/E (annual)

16.5

P/S (annual)

3.6

P/B

3.4

P/OCF (annual)

8.5

Shareholder Yield

-4.9%

Employees

1,350

Industry

Oil & Gas Equipment & Services

Exchange

NYSE

Signal Flags

3 green1 yellow
Revenue growth acceleratingGrowth rate increasing year over year
Deferred revenue growingRevenue and deferred revenue both growing — retention signal
Sequential beat (rev + EPS)Both revenue and EPS exceeded prior quarter — 2-quarter streak
Dilution above 2%Annual share count increase exceeds 2%. May be acceptable for high-growth companies funding talent via stock compensation

Quality Profile

Profitability

1/1 pass
GP / assets
0.16
Return on equity
20.8%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
1.86
Current ratio
1.39×
Net cash
-$2.35B

Cash Flow

2/3 pass
Positive FCF
PASS
Cash-backed earnings
WARN
Accruals healthy
PASS
SBC / revenue
1.3%

Growth

1/2 pass
Revenue growth
28.7%
Piotroski F-Score
8 / 9
Share dilution
7.6%

Terry Smith quality gate

Passes 0/5 Terry Smith thresholds

3 of 5 thresholds not computable from filed data.

What Growth Is Priced In

Implied revenue growth (10Y)

18.5%

fairly valued

The annual FCF growth rate today's price requires over a 10-year horizon (discount rate 10%, terminal growth 2.5%).

Dilution drag: 7.6% — per-share value needs a total required return of 26.1% once share-count change is priced in.

vs. own 6-year median revenue growth: 12.5%

within its own history

Cost-of-equity sensitivity (implied growth at different discount rates)

r = 8%

13.6%

r = 10% (base)

18.5%

r = 12%

22.8%

Net debt / market cap: 44.4%— material leverage inflates the implied growth read.

Base FCF: $119.6M3Y mean FCF: $67.3M

Valuation History

Current multiple vs historical range at each filing date. Band spans 25th-75th percentile.

P / E

Price / diluted EPS

19.4xCheap
19.4xmed 27.6x46.8x

P / S

Price / revenue per share

4.2xExpensive
0.9xmed 1.7x4.2x

P / B

Price / book value per share

4.2xExpensive
1.0xmed 1.5x4.2x

P / FCF

Price / free cash flow per share

51.8xFair
4.7xmed 30.5x246.8x

Operating margin expansion and free cash flow are the primary reads at this stage.

Profitability

Gross profitability (GP / assets)

0.16

Primary signal (Novy-Marx).

4th of 6 SIC 4922 peers

Return on equity

20.8%

Gross margin

48.6%

1st of 6 SIC 4922 peers

Revenue growth (YoY)

28.7%

RPO growth (YoY)

1.3%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

20.8%

Revenue CAGR (5Y)

11.2%

Earnings CAGR (3Y)

93.8%

FCF CAGR (3Y)

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

1.86

Current ratio

1.39×

1st of 6 SIC 4922 peers

Quick ratio

0.88×

Net cash

-$2.35B

Cash & equivalents minus total debt.

Cash-flow health

Free cash flow

$119.64M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

-0.63

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

WARN

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

1.3%

Stock-based comp intensity.

Dividend safety

Composite score

2.5 / 5

Fair
Payout ratio
43.9%4/5 Strong
FCF coverage
0.84×1/5 Weak
Dividend growth streak
9 yr4/5 Strong
Balance-sheet health
D/E 1.86 · IC N/A1/5 Weak

Piotroski F-Score

F-Score

8 / 9

Fundamental-strength score (0-9).

Lifecycle Phase History

20202025
Decline
Value
Capital Return
Op. Leverage