Archrock Inc. Common Stock (AROC)

FairStock Score: 62/100 — STEADY

Key Financials

Strengths

• Generates $13 million in annual free cash flow (0.2% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 22.9% demonstrating efficient capital deployment
• Revenue growth of 15.5% demonstrates strong top-line momentum
• Attractive 2.3% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($19) with negative 95% margin of safety—limited downside protection
• Altman Z-Score of 0.9 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Archrock Inc. Common Stock is a small-cap energy company valued at $6.4 billion. The business generates $1.5 billion in annual revenue with a 7.8% net margin and $13 million in free cash flow. From a quality standpoint, Archrock shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 0.9 warrants caution. On valuation, the stock is reasonably priced at 19.8x earnings, with trades above its Graham Number with a negative 95% margin. Growth dynamics show revenue growing at 15.5% and profit growth of 95.4%. The 2.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 62/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Archrock's 16% revenue growth trajectory could accelerate as it captures additional market share in the energy sector. With $13 million in annual free cash flow (0.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the energy space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer