MeritValue

Archrock, Inc.

AROCdata completeness 100%18 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'

The thesis, from the filings

Archrock, Inc. earns about 6% on invested capital, but has diluted owners by 15% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $6.23 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$781.5M1$845.6M2$990.3M3$1.16B3$1.49B3
Net income$28.2M4$44.3M5$105M6$172.2M6$322.3M6
Operating cash flow$237.4M7$203.5M8$310.2M9$429.6M9$622.1M9
Capital expenditure$97.9M10$239.9M11$298.6M12$359M12$502.5M12
Free cash flow (derived)$139.5M7−$36.4M8$11.6M9$70.6M9$119.6M9
Total debt$1.53B13$1.55B14$1.58B15$2.2B16$2.41B16
Cash & equivalents$1.57M17$1.57M18$1.34M19$4.42M20$1.55M20
Diluted shares151.8M153.4M154.3M162.4M174.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$85.35
your share of equity
Profit it earned you last year
$18.44
Free cash flow it threw off
$6.85
Debt you’d be carrying
$137.96

10 shares is a claim on $85.35 of net worth that earned you $18.44 and generated $6.85 of cash last year, against $137.96 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
6% avg · 5y
FY21 4%FY22 5%FY23 8%FY24 5%FY25 8%

It earned an average 6% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+15% shares · 5y

Share count is up 15% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 57% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$70.6M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$70.6M
Earnings Power Value
$6.23
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$105M
  • growthAssumed0.0%
Graham Number
$18.75
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001389050-24-000007 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001389050-25-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001389050-26-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001389050-24-000007 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001389050-25-000009 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001389050-26-000009 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001389050-24-000007 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001389050-25-000009 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001389050-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001389050-24-000007 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-31 · accession 0001389050-25-000009 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0001389050-26-000009 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-31 · accession 0001389050-23-000013 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001389050-24-000007 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001389050-25-000009 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001389050-26-000009 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001389050-23-000013 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001389050-24-000007 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001389050-25-000009 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001389050-26-000009 (CashAndCashEquivalentsAtCarryingValue)