Stock of the Day

August 24, 2022

Cactus (WHD)

$61.27
-$1.25 (-2.0%)
Market Cap: $5.01B

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

Today's Trend

Cactus, Inc. (NYSE: WHD) shares have been under pressure despite a generally favorable run of analyst estimate revisions. The latest coverage points to improving earnings expectations, although the upgrades are modest and Cactus’ elevated valuation may limit investor enthusiasm.

  • Zacks raised near-term EPS estimates: Forecasts increased for Q3 2026 to $0.80 from $0.77, Q4 2026 to $0.72 from $0.70, and FY2026 to $3.15 from $3.10. These revisions suggest analysts see somewhat stronger profitability ahead. Cactus Stock Gets Stronger EPS Estimate from Zacks Research
  • Longer-term estimates also improved: Zacks lifted Q1 2027 EPS to $0.77, Q2 2027 to $0.79, Q3 2027 to $0.81, and FY2027 to $3.21. Estimates for 2028 were raised as well, including FY2028 EPS to $4.12 from $4.06, indicating expectations for continued earnings growth.
  • The estimate revisions build on Cactus’ recent operating momentum. In its latest reported quarter, revenue increased 64.3% year over year to approximately $449.5 million and EPS exceeded consensus expectations.
  • Value comparison under review: A new Zacks article compares Cactus with ConocoPhillips (COP) for value investors. The report may influence sector allocation decisions, but the available information does not identify a specific new catalyst or recommendation for WHD. COP or WHD: Which Is the Better Value Stock Right Now?
  • Valuation remains a concern: Cactus trades at roughly 54 times earnings, so the stock may require continued earnings growth to justify its price. The small size of the estimate increases and the absence of a fresh corporate announcement may have reduced the impact of the positive research.
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