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Cactus (WHD) Down 1.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Cactus, Inc. (WHD - Free Report) . Shares have lost about 1.9% 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 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 Q1 Earnings Beat on Spoolable Technologies
Cactus, Inc. reported first-quarter 2024 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also rose from the year-ago quarter’s level of 64 cents.
Total quarterly revenues of $274 million beat the Zacks Consensus Estimate of $268 million. The top line also improved from the year-ago quarter’s figure of $228 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 $175.03 million from the Pressure Control segment, down from $194.66 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 was above our estimate of $171 million.
Adjusted Segment EBITDA for Pressure Control totaled $60.6 million, down from almost $72.8 million in the prior-year quarter. The reported figure was above our estimate of $56.7 million.
Revenues from the Spoolable Technologies segment came in at $99.1 million, up from $33.8 million in the prior-year quarter. The figure was also above our estimate of $96.3 million.
Adjusted Segment EBITDA for the unit totaled $38.8 million, up from $10.3 million in the prior-year quarter. The figure was also above our estimate of $36.3 million.
Capex and Cash Flow
Cactus’ capital expenditure and other amount for the quarter totaled $7.9 million. Operating cash flow amounted to $86.3 million.
Balance Sheet
Cactus had cash and cash equivalents of $194.3 million at the end of the first quarter of 2024. The company had no bank debt outstanding as of Mar 31, 2024.
Outlook
Cactus expects a sequential decline in U.S. land activity levels in the second quarter of 2024, driven by ongoing weakness in gas prices and global geopolitical uncertainties. However, in the Pressure Control sector, WHD anticipates revenues to remain relatively stable, mainly due to robust sales of production equipment in April. Additionally, Cactus expects a slight increase in revenues from Spoolable Technologies. It 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, estimates revision flatlined during the past month.
VGM Scores
At this time, Cactus has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cactus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Cactus (WHD) Down 1.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Cactus, Inc. (WHD - Free Report) . Shares have lost about 1.9% 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 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 Q1 Earnings Beat on Spoolable Technologies
Cactus, Inc. reported first-quarter 2024 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also rose from the year-ago quarter’s level of 64 cents.
Total quarterly revenues of $274 million beat the Zacks Consensus Estimate of $268 million. The top line also improved from the year-ago quarter’s figure of $228 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 $175.03 million from the Pressure Control segment, down from $194.66 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 was above our estimate of $171 million.
Adjusted Segment EBITDA for Pressure Control totaled $60.6 million, down from almost $72.8 million in the prior-year quarter. The reported figure was above our estimate of $56.7 million.
Revenues from the Spoolable Technologies segment came in at $99.1 million, up from $33.8 million in the prior-year quarter. The figure was also above our estimate of $96.3 million.
Adjusted Segment EBITDA for the unit totaled $38.8 million, up from $10.3 million in the prior-year quarter. The figure was also above our estimate of $36.3 million.
Capex and Cash Flow
Cactus’ capital expenditure and other amount for the quarter totaled $7.9 million. Operating cash flow amounted to $86.3 million.
Balance Sheet
Cactus had cash and cash equivalents of $194.3 million at the end of the first quarter of 2024. The company had no bank debt outstanding as of Mar 31, 2024.
Outlook
Cactus expects a sequential decline in U.S. land activity levels in the second quarter of 2024, driven by ongoing weakness in gas prices and global geopolitical uncertainties. However, in the Pressure Control sector, WHD anticipates revenues to remain relatively stable, mainly due to robust sales of production equipment in April. Additionally, Cactus expects a slight increase in revenues from Spoolable Technologies. It 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, estimates revision flatlined during the past month.
VGM Scores
At this time, Cactus has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cactus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.