Company Overview
USA Compression Partners, LP operates within the energy sector, specifically focusing on the oil and gas equipment and services industry, where it delivers essential natural gas compression services across the United States to a diverse clientele including oil companies, independent producers, processors, gatherers, and transporters. The firm also extends its service offerings to infrastructure applications, providing critical support for the broader natural gas and crude oil supply chains that rely on efficient compression capabilities to maintain pressure and flow integrity throughout distribution networks. In terms of scale, the company commands a market capitalization of $4.08B and generates annual revenue of $998.10M, supported by a workforce of 885 employees dedicated to operational execution. These valuation and revenue figures position USA Compression Partners, LP as a significant entity within its niche, indicating a substantial asset base and a capacity to serve a wide range of industrial clients with a high degree of operational reach and market penetration.
Financial Health
The financial performance of USA Compression Partners, LP is characterized by a revenue stream of $998.10M (TTM) that supports a net income of $103.03M (TTM) and an EBITDA of $607.41M, revealing a distinct gap between total revenue and bottom-line earnings that highlights a robust cost structure where operating expenses and depreciation significantly impact the conversion of gross revenue into taxable profit. Despite the lower net income relative to EBITDA, the company maintains strong free cash flow of $267.70M, which provides significant financial flexibility to fund capital expenditures, manage debt obligations, or pursue strategic opportunities without immediate reliance on external financing. The company's profitability is further elucidated by three key margin metrics: a gross margin of 67.5% indicating efficient production and service delivery costs, an operating margin of 31.2% reflecting effective overhead management, and a profit margin of 11.2% that captures the final return after all taxes and interest expenses. On the balance sheet, the company holds $8.56M in cash against $2.54B in debt, resulting in a debt-to-equity ratio that is marked as N/A, suggesting a leveraged capital structure typical of the capital-intensive compression services industry. Liquidity is supported by a current ratio of 1.27, which indicates that the company possesses sufficient short-term assets to cover its current liabilities with a comfortable cushion. Return metrics show a return on assets of 7.5% while return on equity is listed as N/A, offering insight into how management utilizes the company's total asset base to generate earnings, though the absence of a standard ROE figure often relates to the partnership structure or negative book value implications found in the price-to-book ratio.
Valuation Assessment
Valuation metrics for USA Compression Partners, LP present a mix of historical and forward-looking perspectives, with a trailing twelve-month P/E ratio of 33.14 contrasted against a forward P/E of 15.87, implying that the market expects earnings growth that will significantly compress the multiple over the coming year. The price-to-book ratio stands at -31.76, a figure that indicates the market price is negative relative to the book value, a scenario often seen in partnerships with substantial accumulated losses or specific accounting treatments, rather than a traditional premium over book value. Alternative valuation lenses such as the price-to-sales ratio of 4.09 and an EV/EBITDA of 11.01 provide context for the company's valuation relative to its sales volume and operating earnings power, suggesting the market is pricing in specific growth or risk factors distinct from standard P/E comparisons. Price volatility is captured by a 52-week high of $28.90 and a 52-week low of $21.59, meaning the stock trades within a range that reflects recent market sentiment shifts, though the exact current price position relative to these bounds requires real-time data not provided in the static facts. The beta value of 0.16 indicates that the stock's price volatility is significantly lower than the broader market, suggesting that the stock moves independently of general market swings, likely due to its specific operational drivers and defensive characteristics within the energy infrastructure space.
Growth & Income
The growth profile of USA Compression Partners, LP is defined by a revenue growth rate of 2.7% year-over-year and an earnings growth rate of 22.3% year-over-year, demonstrating that earnings are expanding at a pace more than eight times faster than revenue, which implies significant leverage to operational efficiency or pricing power in the current cycle. The company offers a dividend yield of 7.5%, supported by a payout ratio of 247.1%, which indicates that the cash distributed to shareholders exceeds the reported net income, a situation that requires careful scrutiny regarding sustainability given the high payout relative to earnings. While the payout ratio appears unsustainable based on traditional accounting measures, the high free cash flow generation allows for the maintenance of the yield, though the mathematical relationship between distributed dividends and reported earnings remains a notable characteristic of the firm's capital allocation. Overall, the company presents a growth and income profile where substantial earnings expansion coexists with a high-yield dividend strategy, creating a unique investment characteristic that balances capital returns with operational scaling.