Value
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.7 |
| P/S | 7.9 |
| EV/EBITDA | 5.6 |
| Fwd P/E | 8.1 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.7x
- ▸PEG: 0.15
USAC · Why this verdict
Why USA Compression Partners (USAC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue growth of 35% year-over-year ranks USA Compression as an industry growth leader, reflecting strong demand for natural gas compression infrastructure as production volumes expand. Growth breakdown | Revenue growth should remain above 15% year-over-year over the next 12 months, sustaining the industry-leading growth position. | →Stable |
| CounterTwo consecutive earnings misses in the most recent quarters suggest the growth rate is not translating cleanly to the bottom line, possibly due to rising operating costs or pricing pressure. | ||
A debt-to-equity ratio of 9.5 is among the highest in the screened universe, and the dividend distribution yield is flagged as potentially unsafe relative to coverage, creating meaningful financial risk if earnings soften. Bear case | The leverage ratio should decline below 7.0 within 12 months as cash flows are used to pay down debt, improving financial stability. | →Stable |
| CounterLimited partnerships in the midstream energy sector routinely carry high debt-to-equity ratios as part of their business model, and the 198% free cash flow to net income conversion suggests strong actual cash coverage. | ||
USA Compression Partners posts a return on equity of 85%, a Piotroski financial strength score of 8 out of 9, and a Rule of 40 score of 59, placing it in the top tier of business quality among all screened names in the energy services sector. Quality breakdown | Return on equity should remain above 60% and the Piotroski score should stay at 7 or above over the next 12 months. | →Stable |
| CounterThe extreme return on equity is partly a function of very high financial leverage at 9.5 debt-to-equity, meaning returns are magnified by debt rather than purely by operating efficiency. | ||
USA Compression missed earnings estimates in both of its most recent quarters with average misses of about 10%, indicating that analyst models outpace what the business is currently delivering. Earnings | The company should return to beating estimates in at least 1 of the next 2 quarters, reversing the consecutive miss streak. | →Stable |
| CounterThe two prior quarters were beats, suggesting this is a short-term earnings variability pattern rather than a structural deterioration in the business model. | ||
Revenue growth of 35% year-over-year ranks USA Compression as an industry growth leader, reflecting strong demand for natural gas compression infrastructure as production volumes expand.
→StableGrowth breakdown
- Expectation
- Revenue growth should remain above 15% year-over-year over the next 12 months, sustaining the industry-leading growth position.
CounterTwo consecutive earnings misses in the most recent quarters suggest the growth rate is not translating cleanly to the bottom line, possibly due to rising operating costs or pricing pressure.
A debt-to-equity ratio of 9.5 is among the highest in the screened universe, and the dividend distribution yield is flagged as potentially unsafe relative to coverage, creating meaningful financial risk if earnings soften.
→StableBear case
- Expectation
- The leverage ratio should decline below 7.0 within 12 months as cash flows are used to pay down debt, improving financial stability.
CounterLimited partnerships in the midstream energy sector routinely carry high debt-to-equity ratios as part of their business model, and the 198% free cash flow to net income conversion suggests strong actual cash coverage.
USA Compression Partners posts a return on equity of 85%, a Piotroski financial strength score of 8 out of 9, and a Rule of 40 score of 59, placing it in the top tier of business quality among all screened names in the energy services sector.
→StableQuality breakdown
- Expectation
- Return on equity should remain above 60% and the Piotroski score should stay at 7 or above over the next 12 months.
CounterThe extreme return on equity is partly a function of very high financial leverage at 9.5 debt-to-equity, meaning returns are magnified by debt rather than purely by operating efficiency.
USA Compression missed earnings estimates in both of its most recent quarters with average misses of about 10%, indicating that analyst models outpace what the business is currently delivering.
→StableEarnings
- Expectation
- The company should return to beating estimates in at least 1 of the next 2 quarters, reversing the consecutive miss streak.
CounterThe two prior quarters were beats, suggesting this is a short-term earnings variability pattern rather than a structural deterioration in the business model.
TrendMatrix Research · core thesis
Engine thesis — one sentence
USA Compression Partners combines top-decile business quality (quality score 8.1 out of 10, Rule of 40 at 59, return on equity at 85%) with strong revenue growth of 35% year-over-year, but very high leverage (debt-to-equity of 9.5) and two consecutive earnings misses dampen the near-term setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.4 |
| Gross margin | 9.3 |
| Op margin | 10.0 |
| Net margin | 6.0 |
| Current ratio | 5.6 |
| FCF quality | 10.0 |
| Moat | 7.5 |
| Rule of 40 | 9.3 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 85%
- ▸Excellent cash conversion: 198% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 35% YoY
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 7.2 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.4 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.8 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 8.7 |
| growth rank | 8.3 |
- ▸Superior ROE vs peers
- ▸Industry growth leader
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.5 |
| support resistance | 6.2 |
| 52w position | 7.3 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 0.0 |
| volatility | 3.3 |
| put call | 10.0 |
| implied vol | 3.7 |
| beta | 10.0 |
| debt equity | 0.0 |
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 3.5 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.15, quality 8.1/10, growth 10.0/10). | News modifier -1 (STRONG_BUY_WAIT → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|L3:NEWS_MOD=-1Passed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:37d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.28
Upside
-2.1%
Downside
7.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.8B<$5B
Investment implication
The C-path quality+growth combination triggered the HOLD_IF_HOLDING verdict: quality 8.1 and growth 10.0 both clear their thresholds, with asymmetric R:R of -0.28 supporting the read.
The strongest dimensions are Growth at 10.0, Quality at 8.1, and Value at 6.8; the weakest are Momentum at 4.0, Catalyst at 4.1, and Risk (lower is worse) at 5.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.28 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Operating Quality
Trip ifReturn on equity falls below 50% in any of the next 4 reported quarters.
- P2Strong Revenue Growth
Trip ifRevenue growth falls below 10% year-over-year in at least 2 of the next 4 quarters.
- P3Leverage And Distribution Risk
Trip ifDebt-to-equity ratio rises above 11.0, exceeding the current 9.5 level.
- P4Earnings Miss Pattern
Trip ifEPS surprise falls below -15% in at least 2 of the next 4 quarters.