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Why Is Cactus, Inc. (WHD) Down 10.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Cactus, Inc. (WHD - Free Report) . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cactus, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cactus Q3 Earnings & Revenues Surpass Estimates
Cactus reported third-quarter adjusted earnings of 52 cents per share, beating the Zacks Consensus Estimate of 49 cents. The bottom line rose from the year-ago quarter’s 19 cents.
Total quarterly revenues of $184.5 million outpaced the Zacks Consensus Estimate of $183 million. The top line also improved from the year-ago quarter’s $115.4 million.
The strong quarterly results were primarily driven by higher sales of wellhead and production-related equipment, resulting from improved U.S. drilling activities.
Business Segments
From the Product business, Cactus generated revenues of $121.8 million, increasing from $74.8 million in the September-end quarter of 2021. Gross profit from the business unit was $48 million, up from the year-ago quarter’s $25.1 million. The segment was supported by increased U.S. drilling activity, which triggered sales of wellhead and production-related equipment.
Cactus’ Rental revenues were $27.1 million, up from $15.3 million in the year-ago quarter. Gross income from the Rental unit was $10.8 million, which increased from the year-ago quarter’s $2 million. The segment was supported by higher customer activity.
From the Field Service and Other business segment, Cactus generated revenues of $35.6 million, up from $25.3 million in the year-ago quarter. Gross profit from the business unit was $8.4 million, up 46.5% year over year due to increased customer activities, resulting in higher billable hours.
Expenses
The cost of product revenues was $73.7 million, which jumped from $49.7 million in the year-ago quarter. Also, the cost of rental revenues was $16.3 million, up from $13.3 million in the September-end quarter of 2021. The cost of field service and other revenues increased to $27.1 million from $19.5 million a year ago. As such, total expenses jumped to $133.2 million from the year-ago level of $94.6 million.
Capex and Cash Flow
Cactus’ third-quarter 2022 cash investment amount was $6.6 million. For the reported quarter, the operating cash flow was $30.4 million.
Balance Sheet
At the third-quarter end, Cactus had cash and cash equivalents of $320.6 million. It had no bank debt outstanding as of Sept 30, 2022.
Guidance
For 2022, Cactus gave its capital expenditure guidance of $25 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Cactus, Inc. has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Cactus, Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Cactus, Inc. (WHD) Down 10.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Cactus, Inc. (WHD - Free Report) . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cactus, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cactus Q3 Earnings & Revenues Surpass Estimates
Cactus reported third-quarter adjusted earnings of 52 cents per share, beating the Zacks Consensus Estimate of 49 cents. The bottom line rose from the year-ago quarter’s 19 cents.
Total quarterly revenues of $184.5 million outpaced the Zacks Consensus Estimate of $183 million. The top line also improved from the year-ago quarter’s $115.4 million.
The strong quarterly results were primarily driven by higher sales of wellhead and production-related equipment, resulting from improved U.S. drilling activities.
Business Segments
From the Product business, Cactus generated revenues of $121.8 million, increasing from $74.8 million in the September-end quarter of 2021. Gross profit from the business unit was $48 million, up from the year-ago quarter’s $25.1 million. The segment was supported by increased U.S. drilling activity, which triggered sales of wellhead and production-related equipment.
Cactus’ Rental revenues were $27.1 million, up from $15.3 million in the year-ago quarter. Gross income from the Rental unit was $10.8 million, which increased from the year-ago quarter’s $2 million. The segment was supported by higher customer activity.
From the Field Service and Other business segment, Cactus generated revenues of $35.6 million, up from $25.3 million in the year-ago quarter. Gross profit from the business unit was $8.4 million, up 46.5% year over year due to increased customer activities, resulting in higher billable hours.
Expenses
The cost of product revenues was $73.7 million, which jumped from $49.7 million in the year-ago quarter. Also, the cost of rental revenues was $16.3 million, up from $13.3 million in the September-end quarter of 2021. The cost of field service and other revenues increased to $27.1 million from $19.5 million a year ago. As such, total expenses jumped to $133.2 million from the year-ago level of $94.6 million.
Capex and Cash Flow
Cactus’ third-quarter 2022 cash investment amount was $6.6 million. For the reported quarter, the operating cash flow was $30.4 million.
Balance Sheet
At the third-quarter end, Cactus had cash and cash equivalents of $320.6 million. It had no bank debt outstanding as of Sept 30, 2022.
Guidance
For 2022, Cactus gave its capital expenditure guidance of $25 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Cactus, Inc. has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Cactus, Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.