Archrock shows peer-group-leading 21% margins and strong technical momentum, but the stock has essentially reached the analyst consensus target with just 0.4% upside remaining, the risk/reward stands at nearly zero, the dividend appears potentially uncovered, and free cash flow converts at only 46% of net income despite strong reported margins — the setup favors patience over new capital deployment.
Thesis pillars
- Contract Operations Concentration↓Deteriorating
- Dividend Safety Concern↓Deteriorating
- Price At Analyst Target No Upside↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Archrock, Inc. (AROC) Stock Analysis
Range Bound setup
Energy · Oil & Gas Equipment & Services
Sell if holding. At $34.69, A.R:R 0.9:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Concentration risk — Product: contract operations (85.0%); Concentration risk — Geographic: Permian and Eagle Ford.
Archrock provides natural gas compression services and aftermarket services across major U.S. oil and gas producing regions, operating a fleet of 5,319 units totaling 4,788,000 horsepower at December 31, 2025. Contract operations generated 85% of total 2025 revenue under fixed... Read more
Sell if holding. At $34.69, A.R:R 0.9:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Concentration risk — Product: contract operations (85.0%); Concentration risk — Geographic: Permian and Eagle Ford. Chart setup: RSI 45 mid-range, Bollinger mid-band. Score 5.2/10, moderate confidence.
Passes 6/9 gates (positive momentum, clean insider activity, news events none recent, earnings proximity 72d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
About Archrock, Inc.
About Archrock, Inc.
Archrock deployed 4,788,000 aggregate operating horsepower across 5,319 compression units at December 31, 2025, making it the largest outsourced compression service provider in the U.S. by fleet size. Contract operations generated 85% of total revenue in 2025, with the remaining 15% from aftermarket services. The company's fleet serves approximately 300 customers across all major U.S. natural gas and crude oil producing regions, with 60% of the fleet used in gathering and processing and 40% in gas lift applications.
Archrock earns revenue through two channels: fixed monthly fees for compression services under contract operations agreements and parts and services sales under aftermarket services. Contract operations service agreements typically carry initial minimum terms of 12 to 36 months, or up to 60 months for the largest horsepower units, after which they continue month-to-month until either party terminates with 30 days' notice. The five largest customers accounted for 35% of contract operations and aftermarket services revenue in 2025, with no single customer exceeding 10% of consolidated revenue. The Permian and Eagle Ford shales combined account for approximately three-fourths of the company's operating horsepower. Fleet standardization around major components and key suppliers, with 74% of HP from units exceeding 1,000 horsepower, reduces maintenance capital requirements and improves field technician coverage.
Show full overview
Archrock's contract operations service agreements are cancellable on 30 days' notice after initial terms that typically do not cover equipment payback periods, exposing the company to revenue loss if customers do not renew. Additionally, two customers accounted for approximately 30% of consolidated trade accounts receivable at December 31, 2025, reflecting a credit concentration beyond the revenue-based customer figures. In March 2026, the company disclosed via Form 8-K that CFO Douglas Aron notified the company of his intention to retire, with a transition agreement in place until a successor is named or December 31, 2026.
See also: Energy · Oil & Gas Equipment & Services
From Archrock, Inc.'s most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated 2026-08-16Recent Developments — Archrock, Inc.
Latest news
- NEWS AROC Maintains Buy Rating -- Price Target Raised to $43.00 by Ci - GuruFocus — GuruFocus positive
- NEWS Norges Bank Acquires New Stake in Archrock, Inc. $AROC - MarketBeat — MarketBeat positive
- NEWS Mizuho raises Archrock stock price target to $40 on compression demand - Investing.com Australia — Investing.com Australia positive
- NEWS Mizuho raises Archrock stock price target to $40 on compression demand - Investing.com — Investing.com positive
- NEWS Mizuho raises Archrock stock price target to $40 on compression demand By Investing.com - Investing.com South Africa — Investing.com South Africa positive
Generated 2026-08-16T12:27:02Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHProductcontract operations85%10-K Item 1: 'we generated 85%, 85% and 82%, respectively, of our total revenue from contract operations'
- MEDIUMCustomerfive most significant customers35%10-K Item 1A: 'Our five most significant customers collectively accounted for 35%, 35% and 33% of our revenues during the years ended December 31, 2025, 2024 and 2023, respectively.'
- HIGHGeographicPermian and Eagle Ford10-K Item 1: 'Permian and Eagle Ford shales, which, combined, account for approximately three-fourths of our operating horsepower'
Material Events(8-K, last 90d)
- 2026-03-26Item 5.02MEDIUMCFO Douglas S. Aron notified the company on March 25, 2026 of his intention to retire. He will continue as SVP and CFO until a successor is named or December 31, 2026. Transition and Separation Agreement executed; no involuntary departure.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
1 floor-breaker
Revenue shrinking — -3.1% YoY. Growth thesis broken unless recovery story develops.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. At $34.69, A.R:R 0.9:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Concentration risk — Product: contract operations (85.0%); Concentration risk — Geographic: Permian and Eagle Ford. Chart setup: RSI 45 mid-range, Bollinger mid-band. Prior stop was $32.29. Score 5.2/10, moderate confidence.
Take-profit target: $36.98 (+6.6% upside). Prior stop was $32.29. Stop-loss: $32.29.
Concentration risk — Product: contract operations (85.0%); Concentration risk — Geographic: Permian and Eagle Ford; Thin upside margin: 6.6%.
Archrock, Inc. trades at a P/E of 18.7 (forward 15.4). TrendMatrix value score: 6.5/10. Verdict: Sell.
14 analysts cover AROC with a consensus score of 4.1/5. Average price target: $43.
What does Archrock, Inc. do?Archrock provides natural gas compression services and aftermarket services across major U.S. oil and gas producing...
Archrock provides natural gas compression services and aftermarket services across major U.S. oil and gas producing regions, operating a fleet of 5,319 units totaling 4,788,000 horsepower at December 31, 2025. Contract operations generated 85% of total 2025 revenue under fixed monthly fee agreements; the five largest customers accounted for 35% of combined contract operations and aftermarket services revenue.