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Assessing Archrock (AROC)’s Valuation as Shares Trade Sideways Despite Strong Earnings Growth

Simply Wall St · 2d ago

Archrock (AROC) continues to trade around 25 dollars, and that steady price action masks an important story. This gas compression specialist has grown revenue and net income faster than many investors might expect.

See our latest analysis for Archrock.

Over the past year, Archrock’s share price has held near 25 dollars even as its fundamentals improved, and a three year total shareholder return above 240 percent signals momentum that is cooling rather than collapsing.

If Archrock’s long run total shareholder returns have caught your eye, this could be a good moment to discover fast growing stocks with high insider ownership.

With shares treading water despite solid earnings growth and a sizable gap to analyst targets, the big question is whether Archrock is quietly undervalued, or if the market has already priced in its future growth potential?

Most Popular Narrative: 20.3% Undervalued

With Archrock last closing at 25.14 dollars against a most popular narrative fair value of 31.56 dollars, the valuation case leans toward upside potential.

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.

Read the complete narrative.

Curious how steady contract upgrades could justify a richer future earnings multiple than many energy peers enjoy today? Explore the revenue, margin, and profit projections this narrative considers, and how they combine to support that higher fair value without relying on aggressive growth assumptions.

Result: Fair Value of $31.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained U.S. gas demand and favorable regulation are not guaranteed, and any policy shift or downturn in midstream spending could quickly undercut this bullish setup.

Find out about the key risks to this Archrock narrative.

Build Your Own Archrock Narrative

If you see the story differently or want to dive into the numbers yourself, you can build a personalized view in just minutes: Do it your way.

A great starting point for your Archrock research is our analysis highlighting 5 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.