USA Compression Partners (USAC): Evaluating Current Valuation Following Recent Share Price Gains

USA Compression Partners (USAC) shares have gained 3% over the past month, outpacing some industry peers. Investors seem interested in the company’s steady revenue growth and solid one-year total return, which is near 9%.

See our latest analysis for USA Compression Partners.

After a steady climb in recent weeks, USA Compression Partners is showing signs that investor optimism is holding up, especially with its 8.6% one-year total shareholder return. While the latest share price sits at $23.64, momentum over the past month suggests the market is still weighing the company’s long-term growth story against the industry’s shifting landscape.

If you’re searching for your next investing angle, now is a good opportunity to expand your horizons and discover fast growing stocks with high insider ownership

The real question for investors now is whether USA Compression Partners is trading below its true value, or if the recent gains mean the market has already factored in all the future growth. Is there still a buying opportunity, or is everything priced in?

Most Popular Narrative: 10.8% Undervalued

According to the most widely followed narrative, USA Compression Partners is trading below the analysts’ fair value estimate, with room for further upside from the last close at $23.64. Investor focus is now on the factors driving this optimistic view and what could keep momentum going.

Robust growth in natural gas demand fueled by AI, cloud computing, and massive new data center investments is driving a sustained need for reliable, high-horsepower compression solutions. This positions USAC for ongoing contract wins and steady revenue growth.

Read the complete narrative.

Curious about the ambitious projections powering this target? There is a crucial earnings milestone and revenue surge that could shift USAC’s story. Uncover which financial levers shape this surprisingly bullish outlook, see what makes the analysts’ calculation so compelling, and why the path to that price might not be what you expect.

Result: Fair Value of $26.5 (UNDERVALUED)

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

However, a concentrated customer base and higher costs could quickly shift the outlook if market or industry conditions worsen from this point.

Find out about the key risks to this USA Compression Partners narrative.

Another View: Looking at Value Through Multiples

Switching perspectives, current price-to-earnings shows USA Compression Partners trading at 30.1 times earnings, which is much higher than the industry’s 16.6, and a bit under the peer average of 30.7. This is also well above the fair ratio of 19 times earnings, suggesting today’s price could mean more downside risk if sentiment shifts. Does the market expect continued outperformance, or is there hidden risk waiting to show up?

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

Build Your Own USA Compression Partners Narrative

If you think there’s another angle worth exploring, or prefer building your own investment case, you can put together a personal narrative in just a few minutes. Do it your way

A great starting point for your USA Compression Partners research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Unlock new investment themes today and make your next move with confidence. Don’t wait and let great opportunities slip by, as these ideas could change your portfolio’s trajectory.

• Tap into the next wave of artificial intelligence by evaluating companies driving breakthroughs through these 26 AI penny stocks in machine learning, automation, and innovation.
• Maximize your income potential by targeting reliable quarterly cash flow with these 16 dividend stocks with yields > 3%, featuring stocks offering yields over 3%.
• Take advantage of market mispricings and get ahead of the crowd with these 926 undervalued stocks based on cash flows, a list of stocks flagged as undervalued based on strong cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com