A month has gone by since the last earnings report for Cactus, Inc. (WHD). Shares have lost about 20.6% 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’ Q4 Earnings Beat Estimates, Revenues Miss
Cactus reported fourth-quarter adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 51 cents. The bottom line rose from the year-ago quarter’s 25 cents.
Total quarterly revenues of $188 million missed the Zacks Consensus Estimate of $190 million. The top line, however, improved from the year-ago quarter’s $130 million.
The strong quarterly earnings were primarily driven by increased drilling activity by customers, offset partially by higher total expenses.
Business Segments
From the Product business, Cactus generated revenues of $124.6 million, increasing from $83.8 million in the December quarter of 2021. Gross profit from the business unit was $50.5 million, up from the year-ago quarter’s $29 million. The segment was supported by increased drilling activity by customers.
Cactus’ Rental revenues were $27.3 million, up from $19.2 million in the year-ago quarter. Gross income from the Rental unit was $12 million, which increased from $4.7 million. The segment was supported by declining repair costs along with a fall in depreciation expense.
From the Field Service and Other business segment, Cactus generated revenues of $35.9 million, up from $26.9 million in the year-ago quarter. Gross profit from the business unit was $8.6 million, up 75.6% due to a rise in ancillary services activity.
Expenses
The cost of product revenues was $74 million, which jumped from $54.7 million in the year-ago quarter. Also, the cost of rental revenues was $15.3 million, up from $14.6 million in the December quarter of 2021. The cost of field service and other revenues increased to $27.3 million from $22 million. As such, total expenses jumped to $139.6 million from the year-ago level of $104.2 million.
Capex and Cash Flow
Cactus’ fourth-quarter 2022 cash expenditure and other amount was $7.1 million. In the reported quarter, the operating cash flow was $39.3 million.
Balance Sheet
At the fourth-quarter end, Cactus had cash and cash equivalents of $344.5 million. It had no bank debt outstanding as of Dec 31, 2022.
Guidance
For 2023, Cactus gave its capital expenditure guidance in the band of $35 million to $45 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Cactus, Inc. has a nice Growth Score of B, 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 C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Cactus, Inc. 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, Inc. (WHD) : Free Stock Analysis Report
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