Assessing Archrock (AROC) Valuation After Strong Long Term Returns And A 16.3% Undervaluation Narrative
What Archrock’s Recent Performance Says About The Stock
Archrock (AROC) has drawn fresh attention after a recent move in its share price, with the stock closing at $26.41, prompting investors to reassess its recent returns and underlying business profile.
See our latest analysis for Archrock.
Recent trading has been mixed, with a 1 month share price return of 5.94% alongside a modest 1 day decline. Over a 1 year period, a total shareholder return of 7.55% sits against very large 3 and 5 year total shareholder returns, suggesting momentum has been strong over the longer term.
If Archrock’s long run returns have caught your eye, it could be a good moment to broaden your search with fast growing stocks with high insider ownership.
With Archrock trading at $26.41, annual revenue of about $1.44b and net income of roughly $262.17m, the key question is whether this pricing is already fair or whether the market is still underestimating its future growth potential.
Most Popular Narrative Narrative: 16.3% Undervalued
Compared with Archrock’s last close at US$26.41, the most followed narrative anchors fair value closer to US$31.56, framing the shares as discounted.
The company's ongoing transformation to a modern, high-horsepower fleet and longer customer commitments (average contract duration now exceeding six years) is associated with higher margins, enhanced operational stability, and increased earnings visibility.
Curious what kind of revenue growth and margin profile underpins that higher value. The narrative focuses on earnings power and a richer future P/E. Want the full picture.
Result: Fair Value of $31.56 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this hinges on US natural gas demand and midstream spending staying supportive, while any tougher regulation or a faster energy transition could pressure compression activity and margins.
Find out about the key risks to this Archrock narrative.
Build Your Own Archrock Narrative
If you come to a different conclusion or simply prefer to evaluate the numbers yourself, you can build a custom view in just a few minutes with Do it your way.
A great starting point for your Archrock research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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