USA Compression (USAC) Up 6.4% Since Last Earnings Report: Can It Continue?

Core Viewpoint - USA Compression Partners has shown a positive trend in its stock performance, with shares increasing by approximately 6.4% since the last earnings report, outperforming the S&P 500. Investors are questioning whether this trend will continue leading up to the next earnings release [1]. Financial Performance - The company reported a fourth-quarter adjusted net profit of 28 cents per common unit, matching the Zacks Consensus Estimate and improving from 18 cents per common unit in the previous year [2]. - Revenues for the fourth quarter reached $252.5 million, a 2.7% increase from the prior year and exceeding the Zacks Consensus Estimate by $1 million, driven by a 3.9% rise in contract operations and a 3.4% increase in related-party revenues [3]. - Adjusted EBITDA decreased by 0.6% to $154.5 million, falling short of the estimate of $156.2 million [3]. - Distributable cash flow increased to $103.2 million from $96.3 million year-over-year, with net income rising to $27.8 million compared to $25.4 million in the previous year [4]. - The company reported net operating cash flow of $139.5 million, up from $130.2 million in the prior year [4]. Revenue and Capacity - The revenue-generating capacity slightly declined to 3.58 million horsepower, exceeding the estimate of 3.57 million horsepower [5]. - Average monthly revenue per horsepower increased to $21.69 from $20.85 in the previous year, although it was lower than the estimate of $21.91 [5]. - The average quarterly horsepower utilization rate remained stable at 94.5%, consistent with the prior year's level [5]. Costs and Capital Expenditures - Total costs and expenses amounted to $175.9 million, a 2.7% increase from $171.4 million in the previous year [7]. - The company allocated $40 million for growth capital expenditures and $7.8 million for maintenance capital expenditures [7]. Guidance and Future Outlook - For the full year 2026, USA Compression expects adjusted EBITDA to be between $770 million and $800 million, with distributable cash flow projected to range from $480 million to $510 million [9][10]. - The company anticipates expansion capital expenditures between $230 million and $250 million, and maintenance capital expenditures totaling between $60 million and $70 million [10]. - Recent estimates have trended downward, with a consensus estimate shift of -26.6% [11]. - Despite the downward revisions, USA Compression holds a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [13]. VGM Scores - USA Compression has a strong Growth Score of A but is lagging in Momentum Score with an F. The stock received a grade of C on the value side, placing it in the middle 20% for value investors, resulting in an aggregate VGM Score of B [12].