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Cactus Inc (WHD)
NYSE:WHD
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Cactus
(NYSE:WHD)
80Outperform
Positive Factors
Market Performance
The company's shares have increased by 5.4% since the better-than-expected quarterly results and the implementation of a tariff mitigation strategy.
Revenue Growth
Revenue will outperform the market, driven by continued market share gains and new product introductions.
Tariff Mitigation Strategy
The company has been executing a strategy to mitigate tariff risk by establishing a new vertically integrated low-cost facility in Vietnam.
Negative Factors
Market Activity
There is potential for a 30 rig decline, which could pressure overall activity in the latter half of the year.
Revenue and EBITDA
4Q24 Revenue and EBITDA came in below consensus.
Tariff Challenges
Tariffs will present supply chain challenges, with costs increasing on imports from its China facility.
Cactus (WHD) vs. S&P 500 (SPY)
Market Cap
$3.49B
Dividend Yield1.17%
Average Volume (3M)977.54K
Price to Earnings (P/E)15.5
Beta (1Y)1.08
Revenue Growth-0.58%
EPS Growth12.02%
CountryUS
Employees1,600
SectorEnergy
Sector Strength45
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.73
Shares Outstanding68,461,010
10 Day Avg. Volume661,556
30 Day Avg. Volume977,542
Financial Highlights & Ratios
PEG Ratio8.05
Price to Book (P/B)2.46
Price to Sales (P/S)0.00
P/FCF Ratio11.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$52.00Price Target Upside20.99% Upside
Rating ConsensusHold
Number of Analyst Covering5
Cactus Business Overview & Revenue Model
Company Descriptionnull
How the Company Makes Moneynull
Cactus Financial Statement Overview
Summary
Cactus exhibits a strong financial position with robust revenue and profit growth, effective cost management, and operational efficiency. The balance sheet is solid with low leverage, though there's room for improved returns on equity. Cash flow management is efficient, supporting strategic growth.Income Statement
Cactus has demonstrated strong revenue growth over the years, with the latest TTM revenue at $1.136 billion, up from $688 million in 2022. Gross profit margins have been consistently healthy, reaching 42.8% in the TTM period. The net profit margin of 16.8% is robust for the industry, indicating effective cost management. The EBIT and EBITDA margins also show solid profitability, at 26.3% and 30.8% respectively. Overall, the income statement reflects a positive growth trajectory and profitability.85
Very Positive
Balance Sheet
Cactus maintains a strong balance sheet with a low debt-to-equity ratio of 0.04, indicating a conservative use of leverage. The equity ratio stands at 62.6%, reflecting a solid equity base relative to assets. However, return on equity is modest at 17.2%, suggesting room for improvement in generating returns on shareholders' equity. Overall, the balance sheet shows financial stability with minimal leverage risks.78
Positive
Cash Flow
The company has shown a favorable cash flow position, with free cash flow showing steady growth and reaching $240 million in the TTM period. The operating cash flow to net income ratio of 1.42 indicates strong cash generation relative to net income. The free cash flow to net income ratio is also healthy at 1.26, demonstrating efficient cash utilization. Overall, the cash flow statement highlights effective cash management and operational efficiency.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.14B | 1.13B | 1.10B | 688.37M | 438.59M | 348.57M | Gross Profit |
| 485.98M | 436.39M | 406.29M | 242.45M | 121.45M | 111.62M | EBIT |
| 298.55M | 289.61M | 264.37M | 174.75M | 75.43M | 70.04M | EBITDA |
| 365.27M | 363.54M | 337.66M | 217.27M | 111.73M | 112.42M | Net Income Common Stockholders |
| 190.66M | 185.41M | 169.17M | 110.17M | 67.47M | 59.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 347.66M | 342.84M | 133.79M | 344.53M | 301.67M | 288.66M | Total Assets |
| 1.77B | 1.74B | 1.52B | 1.12B | 982.08M | 815.59M | Total Debt |
| 43.16M | 41.72M | 39.97M | 35.52M | 33.21M | 28.13M | Net Debt |
| -304.50M | -301.13M | -93.82M | -309.01M | -268.46M | -260.53M | Total Liabilities |
| 463.70M | 475.15M | 457.79M | 408.45M | 387.05M | 264.82M | Stockholders Equity |
| 1.11B | 1.07B | 865.52M | 710.45M | 595.03M | 550.77M |
| Cash Flow | Free Cash Flow | ||||
| 229.89M | 276.94M | 296.30M | 89.59M | 49.82M | 118.89M | Operating Cash Flow |
| 271.39M | 316.11M | 340.28M | 117.88M | 63.76M | 143.38M | Investing Cash Flow |
| -44.03M | -35.39M | -654.79M | -25.54M | -11.63M | -18.15M | Financing Cash Flow |
| -71.81M | -70.14M | 103.28M | -47.38M | -39.39M | -40.21M |
Cactus Technical Analysis
Neutral
42.98
Price Trends
41.83
Positive
50.18
Negative
55.68
Negative
Market Momentum
0.69
Negative
55.68
Neutral
65.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WHD, the sentiment is Neutral. The current price of 42.98 is above the 20-day moving average (MA) of 40.76, above the 50-day MA of 41.83, and below the 200-day MA of 55.68, indicating a neutral trend. The MACD of 0.69 indicates Negative momentum. The RSI at 55.68 is Neutral, neither overbought nor oversold. The STOCH value of 65.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WHD.
Cactus Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.49B | 15.50 | 19.05% | 1.17% | -0.58% | 12.02% | |
73 Outperform | $4.50B | 21.55 | 17.89% | 2.73% | 20.14% | 43.55% | |
71 Outperform | $1.98B | 8.11 | 13.18% | 2.45% | -7.45% | -44.88% | |
67 Neutral | $3.52B | 7.71 | 38.48% | 1.55% | 0.77% | 1.69% | |
67 Neutral | $3.12B | 67.50 | 3.88% | 4.53% | 45.41% | -37.84% | |
61 Neutral | $2.83B | 35.99 | 148.57% | 8.73% | 10.03% | 65.28% | |
57 Neutral | $7.18B | 3.26 | -3.67% | 5.68% | 0.47% | -50.25% |
* Energy Sector Average
Performance Comparison
WHD
Cactus
42.98
-8.30
-16.19%
AROC
Archrock
25.45
4.81
23.30%
WFRD
Weatherford International
47.59
-75.71
-61.40%
USAC
USA Compression
24.24
1.48
6.50%
LBRT
Liberty Oilfield Services
11.97
-11.61
-49.24%
KGS
Kodiak Gas Services, Inc.
35.52
7.95
28.84%
Cactus Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 13.28%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
Cactus demonstrated strong performance with record bookings and revenue growth, along with a solid cash position and successful international expansion. However, the company faces challenges with margin declines in the Pressure Control segment, reduced revenue in Spoolable Technologies, and increased costs due to tariffs, which are impacting profitability. Despite these challenges, the company is taking steps to mitigate tariff impacts and continues to see opportunities for growth.Q1-2025 Updates
Positive Updates
Record First Quarter Bookings
Cactus reported record levels of pressure control product revenues per rig and record first quarter bookings in the Spoolable Technologies segment, indicating strong demand and performance.
Revenue and EBITDA Growth
Total Q1 revenues were $280 million, up 3% sequentially, with an adjusted EBITDA of $94 million, up 1.2% sequentially, showing continued financial growth.
Strong Cash Position and Dividends
Cactus increased its cash balance to $348 million and paid a quarterly dividend of $0.13 per share, reflecting a strong financial position and shareholder return.
Successful International Expansion
Sales to international locations increased by 30% quarter-over-quarter, driven by robust demand in Canada and the shipment of the first commercial order of sour service pipe for high H2S applications.
Negative Updates
Pressure Control Segment Margin Decline
Despite revenue growth, the Pressure Control segment saw a margin decline due to reserves taken in connection with litigation claims.
Spoolable Technologies Revenue Drop
Revenues in the Spoolable Technologies segment were down 3.6% sequentially, attributed to lower domestic customer activity in the seasonally slow quarter.
Impact of Tariffs on Costs
Cactus is facing increased tariffs on imports, particularly from China, which has resulted in increased costs and the need for mitigation strategies.
Decline in Net Income
GAAP net income decreased to $54 million from $57 million in the previous quarter, largely due to professional fees incurred at corporate.
Company Guidance
During the Cactus Q1 2025 earnings call, the company provided several key financial metrics and guidance for the upcoming quarter. Total revenue for the first quarter was reported at $280 million, a 3% sequential increase, with adjusted EBITDA at $94 million, representing an adjusted EBITDA margin of 33.5%. The company paid a quarterly dividend of $0.13 per share and increased its cash balance to $348 million. For the second quarter, Cactus anticipates pressure control revenue to decline by low to mid-single digits compared to the first quarter's $190 million, while the Spoolable Technologies segment is expected to see mid to high single-digit revenue growth. Adjusted EBITDA margins for the pressure control segment are projected to remain stable between 33% and 35%, and margins for Spoolable Technologies are expected to be around 35% to 37%. The company plans to neutralize the increased tariff expenses by mid-next year through various initiatives, including ramping up production in its Vietnam facility. The Board also approved a quarterly dividend of $0.13 per share, to be paid in June.Cactus Corporate Events
Executive/Board ChangesShareholder Meetings
Cactus Inc. Holds Annual Stockholders Meeting
Neutral
May 15, 2025
On May 13, 2025, Cactus, Inc. held its Annual Meeting of Stockholders where several key decisions were made. The stockholders elected three Class II directors to serve until the 2026 annual meeting, ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025, and approved an amendment to the Long-Term Incentive Plan to increase the number of shares of Class A common stock. Additionally, the stockholders approved the compensation of the company’s named executive officers and decided to hold advisory votes on this compensation annually.
The most recent analyst rating on (WHD) stock is a Hold with a $61.00 price target. To see the full list of analyst forecasts on Cactus stock, see the WHD Stock Forecast page.
Spark’s Take on WHD Stock
According to Spark, TipRanks’ AI Analyst, WHD is a Outperform.
Cactus, Inc. presents a strong financial foundation with notable revenue and profit growth, supported by effective cash management and low leverage. However, technical indicators suggest caution due to recent price trends, while valuation metrics are fair. The recent merger and earnings guidance provide optimism for future growth, albeit with some challenges related to margins and costs.
To see Spark’s full report on WHD stock, click here.
M&A TransactionsBusiness Operations and Strategy
Cactus Completes Merger with HighRidge Resources
Positive
Mar 17, 2025
On February 28, 2023, Cactus, Inc. completed its merger with HighRidge Resources, Inc., acquiring the FlexSteel business, which has been integrated into Cactus Companies, LLC, a subsidiary of Cactus Inc. This strategic move is expected to strengthen Cactus’s market position and operational capabilities, particularly in the onshore equipment solutions sector, and enhance its financial performance with improved margins and cash flow generation.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.