The market is witnessing mounting U.S. LNG exports, reflecting rising demand for natural gas from different corners of the world. The business outlook appears highly favorable for companies like Archrock Inc. AROC, which provide natural gas compression services. Let’s delve a little deeper.
Investors should note that in its latest short-term energy outlook, the U.S. Energy Information Administration (“EIA”) revealed that it expects U.S. LNG exports to reach 16.7 billion cubic feet per day, higher than 15.1 billion cubic feet per day last year. Thus, the expectations for rising clean energy demand, also getting reflected in EIA’s expectations for higher gas prices in 2026, will continue to aid the demand for natural gas compression services.
AROC is already locked in fee-based contracts with premium customers, which depicts a stable business model. Given the increasing demand for its services and fee-based contracts, Archrock will likely continue to generate handsome cash flows for shareholders.
Will EQT & AR Also Gain?
The business environment of EQT Corporation EQT and Antero Resources AR is also favorable, with handsome natural gas prices. This is because EQT is a leading producer of natural gas in the United States, having a strong presence in the Appalachian basin, one of the most prolific basins in the domestic market.
Antero Resources is also a leading upstream energy company involved in producing natural gas in the Appalachian Basin. AR has decades of drilling inventories, reflecting a bright production outlook.
AROC’s Price Performance, Valuation & Estimates
Archrock’s shares have gained 44.8% over the past year compared with the 46.9% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, AROC trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.97X. This is above the broader industry average of 9.41X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AROC’s 2026 earnings has seen upward revisions over the past 30 days.
Image Source: Zacks Investment Research
AROC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Antero Resources Corporation (AR) : Free Stock Analysis Report
Archrock, Inc. (AROC) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
