Is USA Compression Partners LP overvalued or undervalued?

As of 6 May 2025, the valuation grade for USA Compression Partners LP has moved from very attractive to risky, indicating a significant shift in its perceived value. The company appears to be overvalued, particularly when considering its P/E ratio of 30, which is substantially higher than peers like NOV, Inc. with a P/E of 10.22, and Weatherford International plc at 7.99. Additionally, the EV to EBITDA ratio stands at 9.66, while its peers generally show lower ratios, suggesting that the market may be pricing in excessive growth expectations.
The negative price-to-book value of -256.56 further complicates the valuation picture, indicating potential financial distress or asset impairment. Despite a decent ROCE of 12.14%, the overall metrics suggest that USA Compression Partners LP is not aligned with its industry peers, which are generally valued more favorably. Over the past year, the stock has returned 6.67%, significantly lagging behind the S&P 500's 17.14% return, reinforcing the notion that the stock may be overvalued in the current market context.