Cactus (WHD) AI Stock Analysis

148 Followers

Top Page

Cactus

(NYSE:WHD)

71Outperform

Cactus Inc. has demonstrated strong financial performance, particularly in revenue growth and profitability. However, the stock is currently in a bearish trend, as per technical analysis, which weighs negatively on the overall score. The valuation is reasonable, and recent corporate activities, including the merger, enhance future prospects. The balanced sentiment from the earnings call highlights both achievements and challenges, contributing to a solid but cautious overall score.

Positive Factors

Market Share and Product Innovation

Revenue will outperform the market, driven by continued market share gains and new product introductions.

Order Book Strength

Strong order book sets stage for meaningful rebound starting in 2Q25.

Negative Factors

Financial Performance

4Q24 Revenue and EBITDA came in below consensus.

Tariffs and Supply Chain Challenges

Tariffs will present supply chain challenges. Costs will increase on imports from its China facility.

Cactus (WHD) vs. S&P 500 (SPY)

Market Cap

$2.96B

Dividend Yield1.38%

Average Volume (3M)1.10M

Price to Earnings (P/E)13.4

Beta (1Y)1.16

Revenue Growth3.00%

EPS Growth6.72%

CountryUS

Employees1,600

SectorEnergy

Sector Strength45

IndustryOil & Gas Equipment & Services

Share Statistics

EPS (TTM)2.77

Shares Outstanding68,314,125

10 Day Avg. Volume1,382,167

30 Day Avg. Volume1,096,877

Financial Highlights & Ratios

PEG Ratio1.99

Price to Book (P/B)N/A

Price to Sales (P/S)3.23

Price to Cash Flow (P/CF)13.70

P/FCF Ratio13.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$54.25

Price Target Upside49.90% 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 strong financial health with consistent revenue growth, robust profit margins, a healthy balance sheet with low leverage, and strong cash flow generation. The company is well-positioned to capitalize on opportunities in the fossil fuels industry.

Income Statement

Very Positive

Cactus has demonstrated consistent revenue growth, with a notable increase from $688 million in 2022 to $1.13 billion in 2024. The gross profit margin remains robust at 100% in 2024, indicating excellent cost management. The net profit margin improved to 16.41%, reflecting strong profitability. Both EBIT and EBITDA margins are solid, showing efficient operations. Overall, the income statement highlights strong growth and profitability, positioning the company well in the fossil fuels industry.

Balance Sheet

Very Positive

Cactus maintains a healthy balance sheet with a low debt-to-equity ratio of 0.04, indicative of conservative leverage. The equity ratio is strong at 61.58%, suggesting a solid capital structure. The return on equity has been improving, reaching 17.31% in 2024, pointing to effective use of equity capital. The balance sheet reflects stability and low financial risk, supporting the company's growth trajectory.

Cash Flow

Very Positive

The company has shown strong free cash flow generation, with a steady increase in free cash flow from $89 million in 2022 to $316 million in 2024. The operating cash flow to net income ratio is healthy, reinforcing the quality of earnings. However, the free cash flow growth rate has been moderate. Overall, the cash flow statement indicates solid cash generation and efficient capital management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.13B	1.10B	688.37M	438.59M	348.57M
	Gross Profit
436.39M	406.29M	242.45M	121.45M	111.62M
	EBIT
289.61M	264.37M	174.75M	75.43M	70.04M
	EBITDA
361.99M	337.66M	217.27M	111.73M	112.42M
	Net Income Common Stockholders
185.41M	169.17M	110.17M	67.47M	59.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
342.84M	133.79M	344.53M	301.67M	288.66M
	Total Assets
1.74B	1.52B	1.12B	982.08M	815.59M
	Total Debt
41.72M	39.97M	35.52M	33.21M	28.13M
	Net Debt
-301.13M	-93.82M	-309.01M	-268.46M	-260.53M
	Total Liabilities
475.15M	457.79M	408.45M	387.05M	264.82M
	Stockholders Equity
1.07B	865.52M	710.45M	595.03M	550.77M
Cash Flow		Free Cash Flow
316.11M	296.30M	89.59M	49.82M	118.89M
	Operating Cash Flow
316.11M	340.28M	117.88M	63.76M	143.38M
	Investing Cash Flow
-35.39M	-654.79M	-25.54M	-11.63M	-18.15M
	Financing Cash Flow
-70.14M	103.28M	-47.38M	-39.39M	-40.21M

Cactus Technical Analysis

Technical Analysis Sentiment

Negative

Last Price36.19

Price Trends

50DMA

48.75

Negative

100DMA

55.47

Negative

200DMA

57.43

Negative

Market Momentum

MACD

-3.65

Positive

RSI

32.05

Neutral

STOCH

28.38

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WHD, the sentiment is Negative. The current price of 36.19 is below the 20-day moving average (MA) of 41.88, below the 50-day MA of 48.75, and below the 200-day MA of 57.43, indicating a bearish trend. The MACD of -3.65 indicates Positive momentum. The RSI at 32.05 is Neutral, neither overbought nor oversold. The STOCH value of 28.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WHD.

Cactus Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AROC	78 Outperform	$4.10B	22.27	15.49%	2.98%	16.89%	55.94%
WFRD	72 Outperform	$3.17B	6.44	45.81%	1.72%	7.36%	19.68%
WHD	71 Outperform	$2.96B	13.37	19.15%	1.38%	3.00%	6.72%
USAC	70 Outperform	$2.87B	34.09	94.47%	8.60%	12.32%	247.77%
KGS	67 Neutral	$2.90B	58.32	3.84%	4.89%	36.33%	83.52%
LBRT	63 Neutral	$1.82B	6.00	16.54%	2.68%	-9.11%	-40.79%
Sector *	55 Neutral	$7.08B	3.69	-5.71%	6.15%	-1.38%	-53.90%

* Energy Sector Average

Performance Comparison

WHD

Cactus

36.19

-12.77

-26.08%

AROC

Archrock

23.58

5.13

27.80%

WFRD

Weatherford International

43.48

-65.94

-60.26%

USAC

USA Compression

24.93

2.04

8.91%

LBRT

Liberty Oilfield Services

11.39

-9.79

-46.22%

KGS

Kodiak Gas Services, Inc.

33.83

8.96

36.03%

Cactus Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -36.56% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

Cactus, Inc. reported several positive achievements, including a record revenue year for 2024 and a strong cash position. However, challenges such as revenue declines in Q4, tariff impacts, and sequential revenue drops in key segments were also noted. The sentiment is balanced with both noteworthy achievements and significant challenges.

Highlights

Record Revenue Year for 2024

Cactus, Inc. achieved a record revenue year in 2024, with both segments outperforming lower average industry activity levels year over year.

Strong Cash Position

The company ended the year with a cash balance of $343 million, a quarterly increase of approximately $39 million.

Dividend Payment

Cactus, Inc. paid a quarterly dividend of $0.13 per share, resulting in a cash outflow of approximately $10 million.

Vietnam Production Facility Progress

The new low-cost production facility is located in Vietnam, with first orders placed and modest shipments expected to begin in the second quarter.

Growth in Spoolable Technology Segment

The spoolable technology segment experienced record revenue growth in 2024, including international orders driving a sequential increase in Q1.

Lowlights

Revenue Decline in Q4

Total Q4 revenues were $272 million, down 7.2% sequentially, with adjusted EBITDA also down 7.6% sequentially.

Pressure Control Segment Challenges

Revenue for the pressure control segment decreased by 4.5% sequentially due to decreased customer activity and reduced shipments of production equipment.

Impact of Tariffs on Cost Structure

New tariffs on goods imported from China are expected to impact the cost profile, with challenges in quantifying the full impact as details remain fluid.

Spoolable Technology Segment Revenue Decline

Revenues for the spoolable technology segment were down 11.2% sequentially due to lower customer activity levels.

Company Guidance

During the Cactus, Inc. Q4 2024 earnings call, the management team provided detailed guidance on their financial performance and future outlook. For Q4 2024, the company reported total revenues of $272 million, down 7.2% sequentially, with adjusted EBITDA at $93 million, reflecting a margin of 34.1%. The pressure control segment generated $177 million in revenue, which was a 4.5% sequential decline, while the spoolable technology segment revenue decreased by 11.2% to $96 million. For Q1 2025, the company expects pressure control revenue to be flat or slightly up, with adjusted EBITDA margins projected between 33% to 35%, excluding a $3 million stock-based compensation expense. Meanwhile, spoolable technology segment revenue is expected to decline mid to high single digits due to seasonality, with anticipated EBITDA margins of 35% to 37%. Cactus, Inc. has expressed optimism about international growth opportunities, especially in the Middle East, and remains focused on expanding their Vietnam production facility to mitigate the impacts of new tariffs. Estimated 2025 CapEx is forecasted to be between $45 million to $55 million, and the company plans to pay a quarterly dividend of $0.13 per share in March.

Cactus Corporate Events

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.