Archrock Beneish M Score

AROC
 Stock
  

USD 7.61  0.02  0.26%   

This module uses fundamental data of Archrock to approximate the value of its Beneish M Score. Archrock M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please continue to Archrock Piotroski F Score and Archrock Altman Z Score analysis.
  
The current year Debt to Equity Ratio is expected to grow to 2.15, whereas Total Debt is forecasted to decline to about 1.5 B. Archrock Interest Coverage is projected to slightly decrease based on the last few years of reporting. The past year's Interest Coverage was at 1.04. The current year PPandE Turnover is expected to grow to 0.53, whereas Long Term Debt to Equity is forecasted to decline to 1.55.
At this time, it appears that Archrock is an unlikely manipulator. The earnings manipulation may begin if Archrock's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Archrock executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Archrock's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.57
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.31Focus
Asset QualityN/AFocus
Expense Coverage0.98Focus
Gross Margin Strengs1.04Focus
Accruals Factor0.98Focus
Depreciation Resistance0.95Focus
Net Sales Growth1.18Focus
Financial Leverage Condition0.95Focus

Archrock Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Archrock's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues922.5 M781.5 M
Fairly Up
Decreasing
Slightly volatile
Selling General and Administrative Expense124.1 M107.2 M
Fairly Up
Decreasing
Slightly volatile
Net Cash Flow from Operations248.9 M237.4 M
Sufficiently Up
Increasing
Very volatile
Depreciation Amortization and Accretion190.8 M182.8 M
Sufficiently Up
Decreasing
Slightly volatile
Total Assets2.8 B2.6 B
Notably Up
Decreasing
Slightly volatile
Property Plant and Equipment Net2.2 B2.2 B
Fairly Down
Decreasing
Slightly volatile
Trade and Non Trade Receivables162.8 M104.9 M
Way Up
Decreasing
Slightly volatile
Total Liabilities1.8 B1.7 B
Sufficiently Up
Decreasing
Slightly volatile
Current Assets191.5 M186.6 M
Fairly Up
Decreasing
Slightly volatile
Assets Non Current2.4 B2.4 B
Slightly Up
Decreasing
Slightly volatile
Current Liabilities128.6 M125.3 M
Fairly Up
Decreasing
Slightly volatile
Liabilities Non Current1.6 B1.6 B
Slightly Up
Decreasing
Slightly volatile
Total Debt1.5 B1.5 B
Sufficiently Down
Decreasing
Stable
Debt Non Current1.5 B1.5 B
Sufficiently Down
Decreasing
Stable
Operating Income153.6 M142.4 M
Significantly Up
Increasing
Slightly volatile
Gross Margin0.560.541
Sufficiently Up
Increasing
Slightly volatile

Archrock Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Archrock's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Archrock in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Archrock's degree of accounting gimmicks and manipulations.

About Archrock Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

190.8 Million

Archrock Depreciation Amortization and Accretion is projected to decrease significantly based on the last few years of reporting. The past year's Depreciation Amortization and Accretion was at 182.83 Million

Archrock Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Archrock. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues794.65 M904.44 M965.49 M874.97 M781.46 M922.49 M
Total Assets2.41 B2.55 B3.11 B2.78 B2.59 B2.75 B
Current Assets221.16 M256.2 M232.2 M182.01 M186.57 M191.48 M
Assets Non Current2.19 B2.3 B2.88 B2.6 B2.4 B2.41 B
Total Liabilities1.67 B1.71 B2.02 B1.84 B1.7 B1.78 B
Current Liabilities130.86 M150.74 M138.74 M111.69 M125.25 M128.55 M
Total Debt1.42 B1.53 B1.86 B1.71 B1.55 B1.5 B
Debt Non Current1.42 B1.53 B1.86 B1.71 B1.55 B1.5 B
Operating Income46.19 M130.93 M166.13 M22.35 M142.39 M153.63 M

About Archrock Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Archrock's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Archrock using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Archrock based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas. Archrock operates under Oil Gas Equipment Services classification in the United States and is traded on New York Stock Exchange. It employs 1100 people.

Archrock Investors Sentiment

The influence of Archrock's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Archrock. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.
Investor biases related to Archrock's public news can be used to forecast risks associated with investment in Archrock. The trend in average sentiment can be used to explain how an investor holding Archrock can time the market purely based on public headlines and social activities around Archrock. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Archrock's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Archrock's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Archrock's news discussions. The higher the estimate score, the more favorable is the investor's outlook on Archrock.

Archrock Implied Volatility

    
  65.6  
Archrock's implied volatility exposes the market's sentiment of Archrock stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Archrock's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Archrock stock will not fluctuate a lot when Archrock's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Archrock in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Archrock's short interest history, or implied volatility extrapolated from Archrock options trading.

Pair Trading with Archrock

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Archrock position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Archrock will appreciate offsetting losses from the drop in the long position's value.

Moving together with Archrock

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Moving against Archrock

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The ability to find closely correlated positions to Archrock could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Archrock when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Archrock - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Archrock to buy it.
The correlation of Archrock is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Archrock moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Archrock moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Archrock can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Please continue to Archrock Piotroski F Score and Archrock Altman Z Score analysis. Note that the Archrock information on this page should be used as a complementary analysis to other Archrock's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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When running Archrock price analysis, check to measure Archrock's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Archrock is operating at the current time. Most of Archrock's value examination focuses on studying past and present price action to predict the probability of Archrock's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Archrock's price. Additionally, you may evaluate how the addition of Archrock to your portfolios can decrease your overall portfolio volatility.
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Is Archrock's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Archrock. If investors know Archrock will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Archrock listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.93
Market Capitalization
1.2 B
Quarterly Revenue Growth YOY
0.1
Return On Assets
0.0313
Return On Equity
0.0378
The market value of Archrock is measured differently than its book value, which is the value of Archrock that is recorded on the company's balance sheet. Investors also form their own opinion of Archrock's value that differs from its market value or its book value, called intrinsic value, which is Archrock's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Archrock's market value can be influenced by many factors that don't directly affect Archrock's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Archrock's value and its price as these two are different measures arrived at by different means. Investors typically determine Archrock value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Archrock's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.