• If you are wondering whether USA Compression Partners is still attractively priced at around US$26.60, you are not alone. This article looks at what the current market price might be implying about its value.
• The unit price has been relatively firm, with returns of 0.9% over the last 7 days, 5.0% over the last 30 days, 11.8% year to date and 2.2% over the past year. The 3 year and 5 year returns of 69.1% and 211.3% highlight how different holding periods can look.
• Recent coverage has focused on USA Compression Partners within the broader energy and midstream space, including discussions of how income-focused names have been trading as investors weigh yield, inflation and interest rate expectations. That backdrop helps frame the partnership's recent price moves and provides useful context before you consider what the current unit price might be offering.
• Our valuation model gives USA Compression Partners a score of 3 out of 6. Next we will walk through the different valuation approaches behind that score and, toward the end of the article, look at a more complete way to think about value that goes beyond a single number.

Approach 1: USA Compression Partners Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and then discounting them back to today’s value.

For USA Compression Partners, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $183.5 million. Simply Wall St then projects cash flows forward, with analyst input up to 2026 and extrapolated figures beyond that, reaching a projected Free Cash Flow of about $527.0 million in 2035. All projections are in US$.

When these cash flows are discounted back and combined with a terminal value, the model arrives at an estimated intrinsic value of about $54.96 per unit. Compared with the recent unit price of around $26.60, the DCF output implies the units are about 51.6% undervalued under these assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests USA Compression Partners is undervalued by 51.6%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

Approach 2: USA Compression Partners Price vs Earnings

For profitable companies, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. Investors usually accept a higher P/E if they expect stronger growth or see the earnings as relatively resilient, and tend to prefer a lower P/E when they see more risk or more volatile cash flows.

USA Compression Partners currently trades on a P/E of about 38.9x. That compares with an Energy Services industry average P/E of around 25.0x and a peer group average of about 42.6x. Simply Wall St also calculates a proprietary “Fair Ratio” for each stock, which is the P/E level it would expect given factors such as the company’s earnings growth profile, industry, profit margins, market cap and risk characteristics.

This Fair Ratio for USA Compression Partners is 24.1x. Because it blends company specific factors with industry context, it can be more tailored than a simple comparison against peers or an industry average alone. Putting this alongside the current P/E of 38.9x suggests the units are trading above the level implied by those fundamentals.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your USA Compression Partners Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives, which are simple stories you create about USA Compression Partners that link your view of its business to specific forecasts for revenue, earnings and margins, then to a Fair Value you can compare with the current price.

On Simply Wall St’s Community page, Narratives are an easy tool that millions of investors use to set their own assumptions, see what Fair Value those assumptions imply, and then decide whether the current unit price looks attractive, fully priced, or expensive against that story.

Narratives update automatically when fresh information such as earnings or news comes in, so your Fair Value view adjusts in line with the latest data rather than staying tied to a static model.

For USA Compression Partners, one investor might build a more optimistic Narrative that lines up with a Fair Value near US$30.0 based on stronger contract wins and margin assumptions. Another might prefer a more cautious Narrative closer to US$23.0 if they focus more on customer concentration, capital intensity and long term industry risks.

Do you think there's more to the story for USA Compression Partners? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.