USA Compression Partners, LP (USAC) Stock Analysis

USA Compression Partners’ primary competitive advantage lies in its scale, fleet composition, and contract structure. With 3.9 million horsepower in its fleet—over 75% of which is large-horsepower units—USAC is one of the largest independent providers of natural gas compression in the U.S. This scale enables it to serve major midstream and upstream customers who require reliable, high-capacity compression, a segment where barriers to entry are high due to capital intensity and long equipment lead times.

USAC’s focus on large, standardized, modern units (average age ~12 years) allows for operational flexibility and high utilization (Q2 2025: 94.4%). Its take-or-pay, fixed-fee contracts (typically 6 months to 5 years) provide revenue stability and reduce exposure to commodity price swings, unlike smaller peers or those with more spot exposure.

Customer relationships are sticky: 86% of revenue is under primary term agreements, and the top 10 customers average 16+ years of relationship duration. USAC’s customer base is weighted toward investment-grade midstream operators, reducing credit risk.

Compared to rivals such as Archrock (AROC) and Kodiak Gas Services (KGS), USAC’s higher proportion of large-horsepower units and longer contract tenors support superior pricing power and utilization. However, its high leverage (net debt/EBITDA ~4x) and sub-investment grade credit rating are notable weaknesses, potentially limiting financial flexibility relative to better-capitalized peers.