It has been about a month since the last earnings report for Cactus, Inc. (
WHD Quick Quote WHD - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cactus, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cactus Q1 Earnings & Revenues Surpass Estimates
Cactus reported first-quarter adjusted earnings of 30 cents per share, beating the Zacks Consensus Estimate by a penny. The bottom line rose from the year-ago quarter’s 11 cents.
Total quarterly revenues of $146 million outpaced the Zacks Consensus Estimate of $142 million. The top line improved from the year-ago quarter’s $84.4 million.
The strong first-quarter results were supported by higher sales of wellhead and production-related equipment, resulting from improved U.S. drilling activities.
Product business, Cactus generated revenues of $94 million, increasing from $52 million in the March-end quarter of 2021. Gross profit from the business unit was recorded at $33.1 million, up from the year-ago quarter’s $15.4 million. The segment was supported by increased U.S. drilling activity, which triggered sales of wellhead and production-related equipment.
Rental revenues were $22.3 million, up from $12.5 million in the year-ago quarter. Gross income from the Rental unit was $7.3 million, which increased from the year-ago quarter’s $0.3 million. The segment was supported by higher customer completion activity.
Field Service and Other business segment, Cactus generated revenues of $29.5 million, up from $20 million in the year-ago quarter. Gross profit from the business unit was $4.7 million, down 14.5% year over year due to higher labor, fuel and third-party service expenses. The negatives were partially offset by increased customer activities, resulting in higher billable hours. Expenses
The cost of product revenues was $60.9 million, which jumped from $36.5 million in the year-ago quarter. Also, the cost of rental revenues was reported at $15.1 million, up from $12.2 million in the March-end quarter of 2021. The cost of field service and other revenues increased to $24.8 million from $14.5 million a year ago. As such, total expenses jumped to $115 million from the year-ago level of $72.8 million.
Capex and Cash Flow
Cactus’ first-quarter 2022 cash investment amount was $7.3 million. For the reported quarter, operating cash flow was $17.2 million.
At the first-quarter end, Cactus had cash and cash equivalents of $297.7 million. It had no bank debt outstanding as of Mar 31, 2022.
For 2022, Cactus projects a net capital expenditure of $20-$30 million.
Being a manufacturer and designer of highly engineered wellhead and pressure-control equipment, Cactus expects revenue growth to continue across all of its business lines in the June-end quarter of this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -9.4% due to these changes.
At this time, Cactus, Inc. has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cactus, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cactus, Inc. is part of the Zacks Oil and Gas - Integrated - United States industry. Over the past month, Hess (
HES Quick Quote HES - Free Report) , a stock from the same industry, has gained 15.2%. The company reported its results for the quarter ended March 2022 more than a month ago.
Hess reported revenues of $2.37 billion in the last reported quarter, representing a year-over-year change of +23.6%. EPS of $1.30 for the same period compares with $0.82 a year ago.
For the current quarter, Hess is expected to post earnings of $2.24 per share, indicating a change of +833.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -6.1% over the last 30 days.
Hess has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.