JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Tuesday, Raymond (NSE:RYMD) James reaffirmed its Outperform rating and $27.00 price target for USA Compression Partners LP (NYSE:USAC), following the company’s fourth-quarter performance. Trading near its 52-week high of $30.10, InvestingPro analysis suggests the stock is currently overvalued. USA Compression Partners exceeded revenue expectations and achieved an approximate 7% higher EBITDA than projected by Raymond James and consensus estimates, with last twelve months EBITDA reaching $551.6 million. This outperformance was attributed to strong margins and contributions from the firm’s smaller segments, which helped offset a minor underperformance in the core contract compression segment.
The company set a new record for quarterly revenue-generating horsepower (HP (NYSE:HPQ)), reaching 3.56 million, with an increase in revenue per HP per month and high utilization at the end of the quarter. The adjusted EBITDA included several one-time factors such as an asset sale loss, impairment charges, and increased unit-based compensation, which were not accounted for in the earnings per unit (EPU) that fell slightly short of expectations. Notably, the company maintains a strong dividend yield of 7.2% and has consistently paid dividends for 8 consecutive years, as highlighted by InvestingPro data.
Looking forward, USA Compression Partners’ management anticipates a positive environment for the compression industry, bolstered by favorable oil prices and rising gas volumes, especially in the Permian region. With revenue growth of 14.6% over the last twelve months and net income expected to grow this year, the company shows promising momentum. The forecast for 2025’s EBITDA is roughly in line with analyst expectations, being about 1% below the midpoint of the Street’s projections. Capital expenditures for expansion are expected to be modestly lower than initially anticipated and are likely to be concentrated towards the latter part of the year. This could potentially position the company for more robust growth in 2026. For deeper insights into USAC’s valuation and growth prospects, including 15+ additional ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, Energy Transfer (NYSE:ET) LP recently announced a 3.2 percent increase in its quarterly cash distribution to $0.3250 per common unit for the fourth quarter of 2024. The increased distribution, reflecting an annualized distribution rate of $1.30 per common unit, is payable on February 19, 2025. The company also plans to release its earnings for the fourth quarter and full year of 2024, providing updates for 2025.
Simultaneously, USA Compression Partners LP has received an updated outlook from Mizuho (NYSE:MFG) Securities, which increased the price target to $26 from $24, maintaining a Neutral rating on the company’s shares. The firm’s analyst cited potential benefits from broader market trends expected to bolster financial and operational performance. However, the analyst also noted some inconsistencies in USA Compression’s growth communication.
USA Compression is expected to embark on a significant expansionary capital expenditure, estimated at around $245 million. However, there has been a lack of clarity regarding the potential activation of horsepower from the company’s idle-to-active fleet conversion, a primary focus of the capital investments. The analyst suggests that if USA Compression can demonstrate that its fiscal year 2024 capital expenditures will contribute to earnings growth, there is a possibility for the partnership’s equity to experience a revaluation in fiscal year 2025. These are recent developments for both companies, crucial for investors to note.
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