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what it is
Archrock rents out gas-compression equipment and crews so oil and gas companies can keep wells and pipelines moving.
how it gets paid
Last year Archrock made $1.5B in revenue. Contract Ops equipment rental was the main engine at $0.96B, or 64% of sales.
why it's growing
Revenue grew 28.7% last year. The 191% revenue jump mattered most because it says compression demand stayed strong enough to outrun the usual energy-cycle worries.
what just happened
Archrock posted a revenue jump to $1.1B and the market cared because demand stayed hot.
At a glance
B+ balance sheet — decent shape, but not bulletproof
40/100 earnings predictability — expect surprises
15.8x trailing p/e — the market's not buying it — or you found a deal
3.3% dividend yield — cash in your pocket every quarter
12.5% return on capital — nothing to write home about
xvary composite: 63/100 — average
What they do
Archrock rents out gas-compression equipment and crews so oil and gas companies can keep wells and pipelines moving.
Scale matters when your customer loses money every minute gas is not moving. Archrock has 4.85 million horsepower in the field, and Contract Operations made up 85% of 2024 sales, so customers usually rent the machine and the service team together. That makes switching a hassle for them and steadier cash flow for you.
How they make money
$1.5B
annual revenue · their business grew +28.7% last year
Contract Ops equipment rental
$0.96B
Contract Ops field service
$0.32B
Aftermarket parts
$0.10B
Aftermarket maintenance
$0.13B
The products that matter
compresses gas under contract
Contract Operations
96% utilization · 70%+ gross margin
this is where the money is made. When a rental fleet is nearly full and gross margin stays above 70%, a lot of revenue growth falls through to earnings.
profit engine
repairs and maintains compression units
Aftermarket Services
around 23% gross margin
this business matters because it keeps customer relationships close. It does not carry the same economics. 23% gross margin versus 70%+ tells you which segment pays the bills.
support business
adds fleet capacity through deals
Fleet expansion and acquisitions
2025 growth driver
2025 growth got help from the Total Operations and Production Services and Natural Gas Compression Systems deals. That's useful, but it also means you should separate organic demand from acquisition lift when you read the next report.
growth assist
Key numbers
58.0%
operating margin
Operating margin → profit after running the business → so what: this is a very fat margin for an equipment-heavy company.
$2.6B
long-term debt
Debt → borrowed money owed over years → so what: leverage boosts returns when demand is strong and raises the pain if it weakens.
4.85M
horsepower fleet
Installed horsepower → compression capacity in the field → so what: scale helps Archrock win contracts and service revenue.
3.3%
dividend yield
Dividend yield → cash paid to you each year as a percent of the stock price → so what: you get paid while waiting.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 45 / 100
- long-term debt $2.6B (37% of capital)
- net profit margin 23.5% — keeps 24 cents of every dollar in revenue
- return on equity 24% — $0.24 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in AROC 3 years ago → it's now worth $29,930.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Archrock posted a revenue jump to $1.1B and the market cared because demand stayed hot.
The latest quarter showed revenue up 191% vs. prior year, while gross margin held at 47.1%. Yahoo Finance also shows the last reported quarter at $0.69 per share versus a $0.42 estimate, a 64.29% surprise.
$1.1B
revenue
$0.69
eps
47.1%
gross margin
the number that mattered
The 191% revenue jump mattered most because it says compression demand stayed strong enough to outrun the usual energy-cycle worries.
-
end-market demand points to another positive year for archrock.
-
it’s likely that the company completed 2025 with revenues of close to $1.5 billion, up nearly 30%.such an impressive gain was supported by the acquisitions of industry peers total operations and production services and natural gas compression systems. in addition, elevated needs for domestic natural gas compression solutions gave a meaningful lift to the top line. this year, though u.s. oil exploration & production might be flat, gas supply should continue to rise, given evolving requirements for utilities to deliver electricity to an expanding base of domestic data centers, as well as firm demand for the fossil fuel, in its gaseous and liquid forms, from mexico and europe.
-
revenue from ongoing operations could increase more than 8%, to above $1.6 billion, this year.
-
we expect operating margins to stay favorable.
-
utilization of the company’s high-quality, high-horsepower gas compression fleet, at 96%, is sound, enabling a gross margin, excluding special items, above 70% at the core contract operations segment and one of around 23% at the smaller aftermarket services business.
source: company earnings report, 2026
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What could go wrong
Archrock's risk stack is unusually concentrated. When one company is this tied to 96% fleet utilization, you do not need a long list. You need the right list.
high
utilization rollback
A weaker production market means fewer wells and systems needing compression. If utilization falls from 96%, pricing usually gets less friendly right behind it.
the stock looks cheap while the fleet is nearly full. That math changes fast if it is not.
med
acquisition digestion
Last year's growth was helped by the Total Operations and Production Services and Natural Gas Compression Systems deals. If those assets need more maintenance spending or integrate less cleanly than expected, reported growth stays up while underlying quality gets murkier.
you want acquisition help, not acquisition dependence.
med
debt load
$2.6B of long-term debt equals 37% of capital. That is manageable while net margin is 20.3% and the fleet stays busy. It gets tighter if growth slows and investors start underwriting the downside instead of the base case.
debt is not the problem today. It becomes the problem if the operating story weakens.
low
emissions and safety rules
New operating or emissions requirements would raise compliance costs across the fleet and service network. This page does not have a precise dollar estimate for that impact, so pretending otherwise would be fake precision.
higher compliance spending pressures a business now enjoying a 57% operating margin.
if utilization and contract margin hold, most other issues stay manageable. If they do not, the 20.3% net margin, 3.3% yield, and fair-looking multiple all get harder to defend.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
fleet utilization
96% is the whole setup. If that starts slipping for more than a quarter, the easy part of the thesis is over.
metric
revenue above $1.6B
The current outlook points above $1.6B from ongoing operations. That tells you whether 2025 was a real step up or a deal-assisted spike.
risk
debt versus cash generation
$2.6B of long-term debt is fine while margins hold. If earnings flatten, you will care less about the dividend and more about balance-sheet flexibility.
calendar
next margin check
Contract operations gross margin above 70% and aftermarket around 23% are the two numbers to check next report. Same company. Very different economics.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts think this stock still has above-average 12-month upside.
risk profile
average
stability score 3 — you are not buying a bunker stock, but this is also not the flimsiest name in energy.
chart momentum
average
technical score 3 — the chart is not making a dramatic argument on its own.
earnings predictability
40 / 100
the assets are useful and the cash engine is real, but quarterly results still move around more than the market's favorite compounders.
source: institutional data
Institutional activity
172 buyers vs. 193 sellers in 3q2025. total institutional holdings: 0.2B shares.
source: institutional data
Price targets
3-5 year target range
$21
$59
$25
current price
$40
target midpoint · +58% from current · 3-5yr high: $40 (+60% · 15% ann'l return)
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