A month has gone by since the last earnings report for USA Compression Partners (USAC Quick QuoteUSAC - Free Report) . Shares have lost about 9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is USA Compression due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

USA Compression’s Q3 Loss Narrower Than Expected

USA Compression Partners reported third-quarter 2021 net loss per common unit of 8 cents, narrower than the Zacks Consensus Estimate of a loss of 10 cents, attributable to lower costs and expenses.

However, the loss was wider than the year-ago quarter’s loss per share of 6 cents. This unfavorable comparison was due to lower year-over-year revenue-generating horsepower capacity.

Revenues of $159 million were 1.9% lower than the year-ago quarter’s reading and also missed the Zacks Consensus Estimate of $165 million.

Adjusted EBITDA was down 4.1% to $99.6 million. Moreover, the partnership’s distributable cash flow fell from $56.9 million in the prior-year quarter to $52 million.

The firm reported an operating cash flow of $45.3 million in the quarter, down from $48.2 million generated in the prior-year quarter. Also, its gross operating margin of 69% declined from the year-ago period’s 71.1%.

In the third quarter, the firm’s revenue-generating horsepower capacity decreased 4.2% to 2,914,100 horsepower from the level recorded in the corresponding period of last year.  The average monthly revenue per horsepower was in line with the year-ago quarter’s figure of $16.62. USA Compression Partners’ average quarterly horsepower utilization rate came in at 82.3%, down from 83.9% in the year-ago period.

DCF, Capex & Balance Sheet

USA Compression Partners’ DCF available to limited partners for the third quarter totaled $52 million (providing 1.02X distribution coverage), down 8.6% from the year-ago level. On Oct 14, the firm announced a third-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis).

It spent $13.5 million as growth capex. The partnership’s maintenance capex consisted of $5.3 million.

As of Sep 30, 2021, the firm had $1.96 billion of net long-term debt. Net debt-to-capitalization was 92.6%.

Guidance

For 2021, USA Compression Partners projects DCF between $200 million and $210 million. It estimates an adjusted EBITDA within $390-$400 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, USA Compression has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

USA Compression has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.