A strong stock as of late has been Archrock Inc. (AROC). Shares have been marching higher, with the stock up 21.4% over the past month. The stock hit a new 52-week high of $33.03 in the previous session. Archrock Inc. has gained 25.7% since the start of the year compared to the 16.6% gain for the Zacks Oils-Energy sector and the 28.6% return for the Zacks Oil and Gas - Field Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 28, 2025, Archrock Inc. reported EPS of $0.42 versus consensus estimate of $0.41.
For the current fiscal year, Archrock Inc. is expected to post earnings of $1.94 per share on $1.49 in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $2.31 per share on $1.58 in revenues. This represents a year-over-year change of 21.46% and 6.25%, respectively.
Valuation Metrics
Archrock Inc. may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Archrock Inc. has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22.1X. On a trailing cash flow basis, the stock currently trades at 13.9X versus its peer group's average of 8.5X. Additionally, the stock has a PEG ratio of 1.4. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Archrock Inc. currently has a Zacks Rank of #1 (Strong Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Archrock Inc. fits the bill. Thus, it seems as though Archrock Inc. shares could still be poised for more gains ahead.
How Does AROC Stack Up to the Competition?
Shares of AROC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Oceaneering International, Inc. (OII). OII has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Oceaneering International, Inc. beat our consensus estimate by 30.95%, and for the current fiscal year, OII is expected to post earnings of $1.86 per share on revenue of $2.83 billion.
Shares of Oceaneering International, Inc. have gained 21.1% over the past month, and currently trade at a forward P/E of 17.4X and a P/CF of 14.82X.
The Oil and Gas - Field Services industry is in the top 32% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AROC and OII, even beyond their own solid fundamental situation.
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Archrock, Inc. (AROC): Free Stock Analysis Report Oceaneering International, Inc. (OII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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