Assessing Archrock (AROC) Valuation After a Steady Week of Trading

Archrock (AROC) shares were little changed after a steady week, with the stock edging down nearly 0.4% on the day. Investors have been tracking Archrock’s long-term growth, especially considering its 20% gain over the past year.

See our latest analysis for Archrock.

Archrock’s share price has held steady lately, but the bigger story is its solid momentum. The stock boasts a 1-year total shareholder return of just over 20%, reflecting growing optimism about its long-term prospects despite quieter trading sessions.

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Given Archrock’s strong shareholder returns and notable discount to analyst price targets, the question remains: does the current share price underestimate future growth, or has the market already factored in the company’s potential?

Most Popular Narrative: 18.7% Undervalued

Compared to its last close at $25.11, the most followed narrative sets Archrock’s fair value at $30.89. This suggests notable potential grounded in expectations for robust earnings and margin gains ahead.

Sustained investments in domestic energy production and infrastructure, supported by energy security priorities and manufacturing onshoring, are generating broad-based demand across major shale basins. This environment allows Archrock to expand geographically and diversify its customer base, which reduces revenue volatility and supports stable earnings.

Read the complete narrative.

Can Archrock’s expansion and contract growth continue to drive its margins? The narrative’s fair value points to significant profit increases and earnings potential. What is the factor that truly impacts performance? Unlock the full breakdown behind this price target and discover which financial lever is most influential.

Result: Fair Value of $30.89 (UNDERVALUED)

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

However, shifts in U.S. energy policy or rapid advances in renewables could quickly change demand and potentially undermine Archrock’s stable outlook.

Find out about the key risks to this Archrock narrative.

Another View: A Look at Valuation Ratios

While the current narrative suggests Archrock is undervalued, a closer look at its price-to-earnings ratio tells a different story. The company currently trades at 19.3x earnings, making it more expensive than both its industry peers (17.8x) and the fair ratio of 17.7x. This higher valuation indicates investors are paying a premium, which could leave less room for upside if expectations fall short. Does this gap mean more risk than opportunity ahead?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Archrock Narrative

If you want to dig deeper, check the numbers for yourself and build a personalized story. Craft your own Archrock 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 2 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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