Comparison Analysis Of Archrock, Inc. (AROC) and At Energy Fuels Inc. (UUUU)

The shares of Archrock, Inc. have increased by more than 14.29% this year alone. The shares recently went down by -3.93% or -$0.35 and now trades at $8.56. The shares of Energy Fuels Inc. (NYSE:UUUU), has slumped by -41.40% year to date as of 08/12/2019. The shares currently trade at $1.67 and have been able to report a change of -2.91% over the past one week.

The stock of Archrock, Inc. and Energy Fuels Inc. were two of the most active stocks on Monday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. AROC has an EBITDA margin of 55.26%, this implies that the underlying business of AROC is more profitable. These figures suggest that AROC ventures generate a higher ROI than that of UUUU.

Cash Flow

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, AROC’s free cash flow per share is a negative -0.01, while that of UUUU is also a negative -0.05.

Valuation

AROC currently trades at a forward P/E of 9.62, a P/B of 1.32, and a P/S of 1.21 while UUUU trades at a P/B of 1.17, and a P/S of 4.85. This means that looking at the earnings, book values and sales basis, AROC is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of AROC is currently at a -39.72% to its one-year price target of 14.20. Looking at its rival pricing, UUUU is at a -55.47% relative to its price target of 3.75.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), AROC is given a 2.20 while 2.50 placed for UUUU. This means that analysts are more bullish on the outlook for UUUU stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for AROC is 3.22 while that of UUUU is just 7.07. This means that analysts are more bullish on the forecast for AROC stock.

Conclusion

The stock of Archrock, Inc. defeats that of Energy Fuels Inc. when the two are compared, with AROC taking 7 out of the total factors that were been considered. AROC happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, AROC is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for AROC is better on when it is viewed on short interest.