Archrock Inc

Archrock, a natural gas compression specialist, has been assigned a Zacks Rank #5 (Strong Sell) following two consecutive earnings and revenue misses and a sharp decline in analyst expectations. The company's Q2 adjusted EPS of $0.38 missed estimates by 17%, and revenue of $371.24 million fell short of the $390.4 million consensus, with aftermarket services revenue plunging to $42 million from $64.8 million a year earlier. Archrock also tightened its 2026 adjusted EBITDA outlook to $865-$885 million from $865-$915 million, citing higher costs and softer demand. Over the past 30 days, the fiscal 2026 EPS estimate has fallen nearly 9% to $1.73, and the current-quarter estimate has been slashed 10% to $0.45. Despite shares being up 20% year to date, the stock has fallen below its 50-day and 200-day moving averages, suggesting investors may want to look elsewhere until the earnings outlook stabilizes.

Archrock reported second quarter 2026 earnings per share of $0.38 and adjusted EBITDA of $213 million, while tightening its full-year adjusted EBITDA guidance to $865 million to $885 million from a prior range of $865 million to $915 million. The company cited near-term lube oil and make-ready cost pressures, aftermarket services customer deferrals, and higher long-term incentive compensation as reasons for the guidance revision, while emphasizing that demand fundamentals remain unchanged. Contract operations utilization was 94.4% with adjusted gross margin of 71%, and Archrock signed a long-term agreement covering approximately 665,000 horsepower for midstream applications. The company also announced a long-term capital allocation framework targeting $1.4 billion to $1.6 billion of growth capital from 2027 through 2030, and raised its quarterly dividend to $0.23 per share, marking its fifth increase in two years.