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Relative valuation derived from Utilities sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 45.1GRADE C
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
-3498.6%
Sector: 9.9%
Dividend Analysis audit
HIGH YIELD
8.95%
Trailing Yield
$8.95
Per $100 Invested
High yield — monitor payout sustainability closely.
Est. Payout Ratio
349%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, USA Compression Partners, LP (USAC) receives a "Hold" rating with a composite score of 46.2/100, ranked #550 out of 4446 stocks. Key factor scores: Quality 45/100, Value 62/100, Momentum 49/100. This is quantitative analysis only — not investment advice.
USA Compression Partners, LP (USAC) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does USA Compression Partners, LP Do?
USA Compression Partners, LP, a growth-oriented Delaware limited partnership that provides natural gas compression services in terms of total compression fleet horsepower. The company offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil, as well as operates stations. It primarily focuses on providing natural gas compression services to infrastructure applications, including centralized natural gas gathering systems and processing facilities. The company was founded in 1998 and is headquartered in Austin, Texas. USA Compression Partners, LP (USAC) is classified as a mid-cap stock in the Utilities sector. The company is led by CEO Eric D. Long and employs approximately 730 people, headquartered in AUSTIN, Texas. With a market capitalization of $4.0B, USAC is one of the notable companies in the Utilities sector.
USA Compression Partners, LP (USAC) Stock Rating — Hold (April 2026)
As of April 2026, USA Compression Partners, LP receives a Hold rating with a composite score of 46.2/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.USAC ranks #550 out of 4,446 stocks in our coverage universe. Within the Utilities sector, USA Compression Partners, LP ranks #53 of 112 stocks, placing it in the upper half of its Utilities peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
USAC Stock Price and 52-Week Range
USA Compression Partners, LP (USAC) currently trades at $27.57. The stock lost $0.12 (0.4%) in the most recent trading session. The 52-week high for USAC is $28.61, which means the stock is currently trading -3.6% from its annual peak. The 52-week low is $21.59, putting the stock 27.7% above its annual trough. Recent trading volume was 48K shares, suggesting relatively thin trading activity.
Is USAC Overvalued or Undervalued? — Valuation Analysis
USA Compression Partners, LP (USAC) carries a value factor score of 62/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 39.00x, compared to the Utilities sector average of 23.47x — a premium of 66%. The price-to-sales ratio is 4.07x, compared to 0.82x for the average Utilities stock. On an enterprise value basis, USAC trades at 11.17x EV/EBITDA, versus 4.75x for the sector.
Overall, USAC's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
USA Compression Partners, LP Profitability — ROE, Margins, and Quality Score
USA Compression Partners, LP (USAC) earns a quality factor score of 45/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is -3498.6%, compared to the Utilities sector average of 9.9%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 3.9% versus the sector average of 3.1%.
On a margin basis, USA Compression Partners, LP reports gross margins of 69.0%, compared to 53.1% for the sector. The operating margin is 31.0% (sector: 21.5%). Net profit margin stands at 10.4%, versus 12.8% for the average Utilities stock. Revenue growth is running at 6.3% on a trailing basis, compared to 20.1% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
USAC Debt, Balance Sheet, and Financial Health
USA Compression Partners, LP has a debt-to-equity ratio of -3293.0%, compared to the Utilities sector average of 164.5%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 1.27x, suggesting adequate working capital coverage. Total debt on the balance sheet is $2.52B. Cash and equivalents stand at $0.
USAC has a beta of 0.79, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for USA Compression Partners, LP is 79/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
USA Compression Partners, LP Revenue and Earnings History — Quarterly Trend
In TTM 2026, USA Compression Partners, LP reported revenue of $986M. Net income for the quarter was $103M. Gross margin was 69.0%. Operating income came in at $306M.
In FY 2025, USA Compression Partners, LP reported revenue of $998M. Net income for the quarter was $111M. Revenue grew 5.0% year-over-year compared to FY 2024. Operating income came in at $307M.
In Q3 2025, USA Compression Partners, LP reported revenue of $250M. Net income for the quarter was $34M. Revenue grew 4.3% year-over-year compared to Q3 2024. Operating income came in at $84M.
In Q2 2025, USA Compression Partners, LP reported revenue of $250M. Net income for the quarter was $29M. Revenue grew 6.3% year-over-year compared to Q2 2024. Operating income came in at $77M.
Over the past 8 quarters, USA Compression Partners, LP has demonstrated a growth trajectory, with revenue expanding from $235M to $986M. Investors analyzing USAC stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
USAC Dividend Yield and Income Analysis
USA Compression Partners, LP (USAC) currently pays a dividend yield of 8.9%. At this yield, a $10,000 investment in USAC stock would generate approximately $$895.00 in annual dividend income. This compares to the Utilities sector average dividend yield of 2.8%, meaning USAC offers above-average income for its sector. The net margin of 10.4% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
USAC Momentum and Technical Analysis Profile
USA Compression Partners, LP (USAC) has a momentum factor score of 49/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 31/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 3/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
USAC vs Competitors — Utilities Sector Ranking and Peer Comparison
Comparing USAC against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full USAC vs S&P 500 (SPY) comparison to assess how USA Compression Partners, LP stacks up against the broader market across all factor dimensions.
USAC Next Earnings Date
No upcoming earnings date has been announced for USA Compression Partners, LP (USAC) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy USAC? — Investment Thesis Summary
USA Compression Partners, LP presents a balanced picture with arguments on both sides. The value score of 62/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 79/100) reduces downside risk.
In summary, USA Compression Partners, LP (USAC) earns a Hold rating with a composite score of 46.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on USAC stock.
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Institutional Research Dossier
USA Compression Partners, LP (USAC) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain our Hold rating on USA Compression Partners, LP (USAC). While the company operates in a critical segment of the natural gas value chain and exhibits strong gross and operating margins compared to its sector, its high leverage and relatively rich valuation, particularly its P/E ratio, temper our enthusiasm. The company's ability to sustain its growth trajectory and manage its debt burden will be crucial in determining its future performance.
USAC's focus on natural gas compression services for infrastructure applications provides a degree of stability, but the partnership structure and sensitivity to energy market fluctuations introduce complexities. The current valuation reflects optimism regarding future growth, but the high debt levels and negative ROE warrant caution. We believe a Hold rating is appropriate, reflecting a balanced view of the company's strengths and weaknesses.
Business Strategy & Overview
USA Compression Partners, LP (USAC) operates within the midstream segment of the oil and gas industry, specifically providing natural gas compression services. These services are essential for maintaining pressure in pipelines and facilitating the transportation of natural gas from production sites to processing plants and ultimately to end-users. USAC's business model revolves around owning, operating, and maintaining a large fleet of compression equipment, leasing this equipment to oil and gas companies under various contract terms.
The company primarily focuses on infrastructure applications, which involve providing compression services for centralized natural gas gathering systems and processing facilities. This strategic focus aims to capitalize on the long-term demand for natural gas and the need for reliable compression services to support the expanding natural gas infrastructure. USAC's operations are geographically concentrated in key shale plays across the United States, including the Permian Basin, the Marcellus Shale, and the Utica Shale, allowing it to serve major natural gas producing regions.
USAC's revenue is generated through a combination of horsepower-based fees and fixed monthly fees, depending on the specific contract terms. The company's ability to maintain high utilization rates for its compression equipment is critical to its financial performance. USAC competes with other compression service providers, as well as with oil and gas companies that choose to own and operate their own compression equipment. The competitive landscape is influenced by factors such as equipment availability, pricing, and service quality.
The company's growth strategy involves expanding its compression fleet through acquisitions and organic investments, as well as securing new contracts with oil and gas producers. USAC's management team has a track record of successfully integrating acquisitions and managing a large fleet of compression equipment. The company's partnership structure, as a limited partnership (LP), allows it to distribute a significant portion of its cash flow to unitholders, which can be attractive to income-seeking investors. However, this structure also introduces complexities related to taxation and governance.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
6.3%
Sector: 20.1%
-68% VS SCTR
Economic Moat Analysis
USA Compression Partners' economic moat is likely Narrow. The company's competitive advantage stems primarily from its scale and established relationships within the natural gas compression services market. While the services provided are not highly differentiated, USAC's large fleet of compression equipment and its geographic presence in key shale plays provide a competitive edge.
Switching costs for customers are moderate. While changing compression service providers involves some logistical challenges and potential downtime, it is not prohibitively expensive or time-consuming. Therefore, USAC cannot rely solely on high switching costs to retain customers. Instead, the company must focus on providing reliable service and competitive pricing to maintain its market share.
The company's intangible assets, such as its reputation and technical expertise, contribute to its competitive advantage. USAC has a long track record of providing compression services to the oil and gas industry, which has allowed it to build strong relationships with its customers. The company's technical expertise in operating and maintaining compression equipment is also a valuable asset, as it enables it to provide reliable and efficient service.
Efficient scale may also play a role in USAC's moat. The natural gas compression services market is characterized by relatively high capital costs and specialized equipment. This creates a barrier to entry for smaller players, as they may lack the financial resources and technical expertise to compete effectively. USAC's large scale allows it to achieve economies of scale and offer competitive pricing, further strengthening its competitive position.
However, the moat is not Wide due to the relatively commoditized nature of the service and the presence of several other established players. The industry is also susceptible to cyclical downturns in the energy market, which can impact demand for compression services and put pressure on pricing. Therefore, while USAC has some competitive advantages, they are not strong enough to warrant a Wide moat rating.
Financial Health & Profitability
USA Compression Partners' financial health presents a mixed picture. The company has demonstrated consistent revenue growth over the past several years, with revenue increasing from $846.18 million in FY2023 to $998.10 million in FY2025. This growth reflects the increasing demand for natural gas compression services and USAC's ability to capture market share. The company's gross margin is strong at 69.0%, significantly higher than the sector average of 53.3%, indicating efficient operations and pricing power. Similarly, the operating margin of 31.0% is also higher than the sector average of 21.7%, demonstrating effective cost management.
However, the company's profitability metrics raise concerns. While net income has increased from $68.27 million in FY2023 to $111.32 million in FY2025, the company's ROE is a staggering -3,498.6%, significantly lower than the sector average of 10.0%. This negative ROE is likely due to the company's high debt levels and partnership structure. The company's net margin of 10.4% is slightly lower than the sector average of 12.8%, suggesting that it may be facing some challenges in converting revenue into profit.
USAC's balance sheet is heavily leveraged, with total debt of $2.52 billion and no reported total cash. The debt-to-equity ratio is a concerning -3,293.00, far exceeding the sector average of 165.00. This high level of debt increases the company's financial risk and makes it more vulnerable to economic downturns. The current ratio of 1.27 indicates that the company has sufficient current assets to cover its current liabilities, but the high debt levels remain a significant concern.
Free cash flow generation is positive, with a reported FCF of $219.77 million. This indicates that the company is generating sufficient cash to fund its operations and potentially reduce its debt burden. However, the company's partnership structure requires it to distribute a significant portion of its cash flow to unitholders, which may limit its ability to deleverage its balance sheet. The quarterly financial history shows consistent revenue and net income growth, but the underlying profitability metrics and high debt levels warrant careful monitoring.
Valuation Assessment
USA Compression Partners' valuation presents a mixed picture. The company's P/E ratio of 40.4x is significantly higher than the sector average of 22.7x, suggesting that the stock is relatively expensive compared to its peers. This high P/E ratio may reflect investor optimism regarding the company's future growth prospects, but it also indicates that the stock may be vulnerable to a correction if growth slows or profitability declines.
However, the company's EV/EBITDA ratio of 2.8x is lower than the sector average of 4.8x, suggesting that the stock may be undervalued on an enterprise value basis. This lower EV/EBITDA ratio may reflect the company's high debt levels, which reduce its enterprise value. It could also indicate that the market is not fully recognizing the company's potential for future growth and cash flow generation.
Given the lack of available FCF data in the quarterly history, a detailed FCF yield analysis is not possible. However, the reported FCF of $219.77 million suggests that the company is generating positive cash flow, which could support a higher valuation. The company's partnership structure and distribution policy also need to be considered when assessing its valuation. The company's ability to distribute a significant portion of its cash flow to unitholders may make it attractive to income-seeking investors, which could support a higher valuation.
Overall, USAC's valuation appears to be relatively rich based on its P/E ratio, but potentially undervalued based on its EV/EBITDA ratio. The high debt levels and negative ROE warrant caution, but the company's consistent revenue growth and positive free cash flow generation provide some support for its valuation. A more detailed valuation analysis, including a discounted cash flow (DCF) model, would be necessary to determine a more precise fair value estimate. However, based on the available data, we believe that the stock is currently fairly valued, justifying our Hold rating.
Risk & Uncertainty
Several risks and uncertainties could impact USA Compression Partners' future performance. One of the most significant risks is the company's high level of debt. The company's debt-to-equity ratio is extremely high, which increases its financial risk and makes it more vulnerable to economic downturns. A decline in natural gas prices or a slowdown in drilling activity could reduce demand for compression services and put pressure on the company's revenue and cash flow, making it more difficult to service its debt.
Another risk is the cyclical nature of the oil and gas industry. Demand for compression services is closely tied to the level of drilling activity and natural gas production. A decline in these activities could reduce demand for compression services and put pressure on pricing. The company's contracts may not fully protect it from these fluctuations, and it may be forced to reduce prices to maintain utilization rates.
Competition from other compression service providers is also a risk. The natural gas compression services market is competitive, and USAC faces competition from other established players, as well as from oil and gas companies that choose to own and operate their own compression equipment. Increased competition could put pressure on pricing and reduce the company's market share.
Regulatory risks are also a concern. The oil and gas industry is subject to extensive regulation, and changes in these regulations could impact the company's operations and profitability. For example, new regulations related to emissions or safety could increase the company's operating costs. The company's partnership structure also introduces regulatory complexities related to taxation and governance.
Bulls Say / Bears Say
The Bull Case
BULL VIEWUSAC's strategic focus on infrastructure applications provides a stable revenue stream and positions it to benefit from the long-term growth in natural gas demand.
BULL VIEWThe company's high gross and operating margins demonstrate its efficient operations and pricing power, allowing it to generate strong cash flow.
BULL VIEWUSAC's partnership structure and distribution policy make it an attractive investment for income-seeking investors, supporting a higher valuation.
The Bear Case
BEAR VIEWUSAC's extremely high debt levels pose a significant financial risk and make it vulnerable to economic downturns and fluctuations in natural gas prices.
BEAR VIEWThe company's negative ROE and relatively high P/E ratio suggest that the stock is overvalued and may be due for a correction.
BEAR VIEWIncreased competition and regulatory changes could put pressure on USAC's pricing and profitability, reducing its ability to service its debt and maintain its distribution.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score USAC and 4,400+ other equities.
USA Compression Partners, LP exhibits a 17104% valuation discount relative to institutional benchmarks. This represents a constructive entry window based on current multiples.
Return on Assets
Efficiency of asset utilization
3.9%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
69.0%
Sector: 53.1%
Operating Margin
Core business profitability
31.0%
Sector: 21.5%
Net Margin
Bottom-line profitability
10.4%
Sector: 12.8%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.83%
Yield Delta+216%
Income Projection audit
A $10,000 investment would generate approximately $895 annually in dividends at the current trailing rate.
