USA Compression Partners, LP (USAC): A Bull Case Theory

We came across a bullish thesis on USA Compression Partners, LP on X.com by @MoneyShow. In this article, we will summarize the bulls’ thesis on USAC. USA Compression Partners, LP's share was trading at $27.60 as of February 26th. USAC’s trailing and forward P/E were 35.73 and 23.36 respectively according to Yahoo Finance.

USA Compression Partners, LP provides natural gas compression services in the United States. USAC emerges as a compelling income-focused energy play for 2026, offering investors an 8.5% indicated annualized yield at a recent price of $24.60, with potential upside to $30. The Master Limited Partnership provides essential compression services under long-term, take-or-pay contracts, enabling natural gas transportation through domestic pipelines and supporting crude oil production.

Its operations are concentrated on high-horsepower applications, which comprise over 75% of its active compression fleet, deployed across five major basins with favorable economics, demonstrating resilience even during periods of stressed pricing. In 3Q 2025, USAC posted record adjusted EBITDA of $160 million, exceeding analyst expectations, with contract operations revenue rising 5% year-over-year and full-year EBITDA guidance increased by 2.5%, reflecting tight market conditions and a 94% average horsepower utilization rate.

The company benefits from strong financial backing, with Energy Transfer LP owning the non-economic general partnership and 46.9% of outstanding common units, while Moody’s, S&P, and Fitch affirm stable credit profiles with Ba3, B+, and BB ratings, respectively. Rating agencies highlight USAC’s geographic diversity, scale, customer retention, and long-term relationships with investment-grade counterparties, emphasizing the stability of its cash flows driven by 100% fixed-fee contracts with no commodity price or short-term volumetric risk.

The combination of resilient operations, strong contract coverage, and attractive yield positions USAC as a medium- to high-risk MLP well-suited for taxable income-focused portfolios. With proven execution, steady demand for compression services, and long-term contractual visibility, USAC represents a distinctive opportunity for investors seeking both high current income and exposure to the domestic energy infrastructure sector.

Previously, we covered a bullish thesis on Kinder Morgan, Inc. (KMI) by Gregg Jahnke in October 2024, which highlighted the company’s growing project backlog, AI-driven and reshoring-related industrial demand, and potential upside from regulatory approvals. KMI’s stock price has appreciated by approximately 36.84% since our coverage. @MoneyShow shares a similar view but emphasizes USAC’s income-focused MLP structure, long-term take-or-pay contracts, and high utilization compression fleet, offering stable cash flows and an attractive yield.

USA Compression Partners, LP is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held USAC at the end of the third quarter which was 0 in the previous quarter. While we acknowledge the risk and potential of USAC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than USAC and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.