USA Compression Partners (USAC) Margin Expansion Challenges Cautious Narratives On Earnings Quality

USA Compression Partners (USAC) has wrapped up FY 2025 with fourth quarter revenue of US$252.5 million and basic EPS of US$0.22, alongside trailing twelve month revenue of US$998.1 million and EPS of US$0.85. Over the past six reported quarters, the partnership has seen revenue move from US$239.97 million in Q3 2024 to just over US$250 million in each quarter of 2025. Quarterly EPS has ranged between US$0.13 and US$0.27, feeding into trailing twelve month net income of US$103.0 million. With net margin sitting at 10.3% over the last year, the latest print gives investors a clear view of a business where earnings power and profitability are front and center.

See our full analysis for USA Compression Partners.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the widely followed growth and income narratives around USA Compression Partners, and where those stories might need a rethink.

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11% Revenue Growth Meets Higher Margins

• Over the last 12 months, total revenue is reported at US$998.1 million and net income at US$103.0 million, which lines up with the 11% revenue growth and 25.6% earnings growth figures you see in the summary.
• Analysts' consensus view ties this revenue and earnings trend to stronger contract pipelines and longer term agreements, and the numbers partly back that up while also showing some pressure points:
  • The net margin moving from 8.6% to 10.3% supports the idea of better pricing or cost control, as the trailing twelve month net income of US$103.0 million is being earned on just under US$1.0b of revenue.
  • At the same time, quarterly EPS bouncing between US$0.14 and US$0.27 over the last six quarters shows that earnings are not smooth, which challenges any assumption that the reported growth rates automatically translate into perfectly steady cash generation.

Quarterly EPS Swings Against a 10.3% Margin

• Within FY 2025, Basic EPS ranged from US$0.14 in Q1 to US$0.27 in Q3 while quarterly revenue sat between US$245.2 million and US$252.5 million, so profit per unit of revenue moved around even though the top line stayed close to US$250 million a quarter.
• Bears argue that rising costs and heavy reinvestment needs could pressure margins over time, and the pattern in these figures offers a mixed read on that concern:
  • The trailing twelve month net margin of 10.3% compared with 8.6% a year earlier points to better profitability on the full year view, which challenges the idea that costs are simply eating into every dollar of sales.
  • However, the spread between Q1 net income of US$16.1 million and Q3 net income of US$32.5 million on fairly similar revenue levels shows that operating leverage can cut both ways, which is relevant for anyone worried about how margins might react if revenue growth slows.

Rich Valuation With Balance Sheet Strain

• The current unit price of US$26.56 sits well above the DCF fair value of US$5.10 and the P/E of 37.4x is higher than the US Energy Services industry average of 25.3x, even though it is slightly below the 40.8x peer average.
• Critics highlight that this valuation sits on top of several flagged risks, and the data gives some clear points to weigh:
  • Reported negative shareholders' equity and weak interest coverage mean that despite trailing twelve month net income of US$103.0 million, lenders and leverage remain a key consideration for unitholders.
  • The 7.91% dividend yield is not covered by earnings or free cash flow and shareholders have been diluted over the past year, so anyone attracted by the income needs to square that payout with the cash coverage and capital structure signals.

On top of these numbers, many investors are asking whether growth and income stories still hold up at this price, and the full bull and bear cases set out how both sides are thinking about it right now. 📊 Read the what the Community is saying about USA Compression Partners.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for USA Compression Partners on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of strengths and concerns has you undecided, take a moment to consider the full picture for yourself by checking the 2 key rewards and 4 important warning signs.

See What Else Is Out There

USA Compression Partners combines a high P/E with negative shareholders' equity, weak interest coverage, uncovered dividends and uneven quarterly earnings. This mix raises questions around resilience.

If you are uneasy about leverage, coverage gaps and balance sheet strain here, compare that setup with our solid balance sheet and fundamentals stocks screener (43 results) and see which businesses feel more comfortable today.

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.

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