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    Archrock’s Cheaper Credit Facility Might Change The Case For Investing In Archrock (AROC)

    Simply Wall St·12/19/2025 15:23:42
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    • On December 12, 2025, Archrock and its lending group amended the company’s senior secured asset-based revolving credit facility, cutting interest margins, removing a prior credit spread adjustment, and lowering unused commitment fees when less than half the facility is drawn.
    • This refinement of Archrock’s borrowing terms points to improved financial flexibility, which sits alongside recent revenue and earnings beats that have drawn fresh attention to the business.
    • Now we’ll explore how lower borrowing costs under the amended credit facility may influence Archrock’s existing investment narrative and risk profile.

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    Archrock Investment Narrative Recap

    To own Archrock, you need to believe that U.S. natural gas compression will remain in demand for years, supporting high fleet utilization and long contracts. The recent reduction in borrowing costs slightly improves near term financial flexibility but does not materially shift the main catalyst, which is sustained U.S. gas infrastructure growth, or the key risk around debt funded expansion if financing conditions tighten.

    The most relevant recent development alongside the amended credit facility is Archrock’s continued earnings outperformance, with year over year revenue and EPS growth and raised 2025 net income guidance. Together, stronger profitability and cheaper revolving credit support the existing narrative of a scaled, cash generative compression platform, while also sharpening the focus on how much incremental leverage investors are comfortable with as the company funds fleet upgrades and dividends.

    Yet even with better terms on its revolver, investors should still keep a close eye on Archrock’s reliance on debt funded growth if...

    Read the full narrative on Archrock (it's free!)

    Archrock's narrative projects $1.8 billion revenue and $393.7 million earnings by 2028. This requires 9.4% yearly revenue growth and about a $165 million earnings increase from $228.6 million today.

    Uncover how Archrock's forecasts yield a $31.56 fair value, a 25% upside to its current price.

    Exploring Other Perspectives

    AROC 1-Year Stock Price Chart
    AROC 1-Year Stock Price Chart

    Five fair value estimates from the Simply Wall St Community span a wide range, from US$9.41 to US$48.34 per share. Set these against Archrock’s improved but still debt heavy balance sheet and ask how different funding conditions could affect that spread over time.

    Explore 5 other fair value estimates on Archrock - why the stock might be worth less than half the current price!

    Build Your Own Archrock Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.