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Cactus (WHD) Up 9.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Cactus, Inc. (WHD - Free Report) . Shares have added about 9.1% 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 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 drivers.
Cactus Q4 Earnings Beat on Spoolable Technologies
Cactus, Inc. reported fourth-quarter 2023 adjusted earnings of 81 cents per share, which beat the Zacks Consensus Estimate of 68 cents. The bottom line also rose from the year-ago quarter’s level of 57 cents.
Total quarterly revenues of $275 million beat the Zacks Consensus Estimate of $267 million. The top line also improved from the year-ago quarter’s figure of $188 million.
The strong quarterly results can be attributed to contributions from the Spoolable Technologies segment.
Business Segments
Post-closure of the FlexSteel acquisition, Cactus reported under two business segments — Pressure Control and Spoolable Technologies.
WHD generated revenues of $180.5 million from the Pressure Control segment, down from $187.8 million reported in the year-ago quarter. The segment was adversely impacted by a decline in the sales of wellhead and production related equipment, due to lower customer activity. The top line beat our estimate of $178.1 million.
Adjusted Segment EBITDA for Pressure Control totaled $64.7 million, down from almost $70 million in the prior-year quarter. The reported figure surpassed our estimate of $56.2 million.
Revenues from the Spoolable Technologies segment came in at $94.4 million, which beat our estimate of $93.5 million.
Adjusted Segment EBITDA for the unit came in at $39.2 million, exceeding our estimate of $36 million.
Capex and Cash Flow
Cactus’ capital expenditure and other amount for 2023 totaled $44 million. Operating cash flow for the fourth quarter came in at $91.7 million.
Balance Sheet
Cactus had cash and cash equivalents of $133.8 million at the end of the fourth quarter of 2023. The company had no bank debt outstanding as of Dec 31, 2023.
Outlook
In the first quarter of 2024, Cactus expects U.S. land activity levels to remain relatively stable on a sequential basis. Even though the current industry outlook for 2024 U.S. land drilling and completion activity seems to be modest, the company has undertaken several initiatives to further enhance margins and focus on diversifying international revenue streams through growth in both the business segments. Cactus expects net capital expenditures to be in the range of $45-$55 million for full-year 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Cactus has a strong Growth Score of A, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cactus 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 belongs to the Zacks Oil and Gas - Integrated - United States industry. Another stock from the same industry, Marathon Oil (MRO - Free Report) , has gained 16.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Marathon Oil reported revenues of $1.69 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $0.69 for the same period compares with $0.88 a year ago.
Marathon Oil is expected to post earnings of $0.54 per share for the current quarter, representing a year-over-year change of -19.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -7.5%.
Marathon Oil has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Cactus (WHD) Up 9.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Cactus, Inc. (WHD - Free Report) . Shares have added about 9.1% 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 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 drivers.
Cactus Q4 Earnings Beat on Spoolable Technologies
Cactus, Inc. reported fourth-quarter 2023 adjusted earnings of 81 cents per share, which beat the Zacks Consensus Estimate of 68 cents. The bottom line also rose from the year-ago quarter’s level of 57 cents.
Total quarterly revenues of $275 million beat the Zacks Consensus Estimate of $267 million. The top line also improved from the year-ago quarter’s figure of $188 million.
The strong quarterly results can be attributed to contributions from the Spoolable Technologies segment.
Business Segments
Post-closure of the FlexSteel acquisition, Cactus reported under two business segments — Pressure Control and Spoolable Technologies.
WHD generated revenues of $180.5 million from the Pressure Control segment, down from $187.8 million reported in the year-ago quarter. The segment was adversely impacted by a decline in the sales of wellhead and production related equipment, due to lower customer activity. The top line beat our estimate of $178.1 million.
Adjusted Segment EBITDA for Pressure Control totaled $64.7 million, down from almost $70 million in the prior-year quarter. The reported figure surpassed our estimate of $56.2 million.
Revenues from the Spoolable Technologies segment came in at $94.4 million, which beat our estimate of $93.5 million.
Adjusted Segment EBITDA for the unit came in at $39.2 million, exceeding our estimate of $36 million.
Capex and Cash Flow
Cactus’ capital expenditure and other amount for 2023 totaled $44 million. Operating cash flow for the fourth quarter came in at $91.7 million.
Balance Sheet
Cactus had cash and cash equivalents of $133.8 million at the end of the fourth quarter of 2023. The company had no bank debt outstanding as of Dec 31, 2023.
Outlook
In the first quarter of 2024, Cactus expects U.S. land activity levels to remain relatively stable on a sequential basis. Even though the current industry outlook for 2024 U.S. land drilling and completion activity seems to be modest, the company has undertaken several initiatives to further enhance margins and focus on diversifying international revenue streams through growth in both the business segments. Cactus expects net capital expenditures to be in the range of $45-$55 million for full-year 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Cactus has a strong Growth Score of A, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cactus 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 belongs to the Zacks Oil and Gas - Integrated - United States industry. Another stock from the same industry, Marathon Oil (MRO - Free Report) , has gained 16.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Marathon Oil reported revenues of $1.69 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $0.69 for the same period compares with $0.88 a year ago.
Marathon Oil is expected to post earnings of $0.54 per share for the current quarter, representing a year-over-year change of -19.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -7.5%.
Marathon Oil has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.