Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and wondering how Cactus, Inc. (WHD) is performing? Did you know that in 2024, the company reported a revenue of $1.13 billion, marking a 3% increase from the previous year? With a net income of $57.4 million for the fourth quarter and a strong cash position of $342.8 million and no bank debt as of December 31, 2024, how does this impact your investment strategy? Dive in to uncover key insights into WHD's financial health, from revenue streams to strategic decisions, and understand what these figures mean for investors like you.

Cactus, Inc. (WHD) Revenue Analysis

To understand the financial health of Cactus, Inc. (WHD), a detailed analysis of its revenue streams is essential. This involves examining where the company's money comes from, how quickly its revenue is growing, and how different parts of the business contribute to the total revenue.

A breakdown of Cactus, Inc.'s primary revenue sources typically includes products and services. The specific types of products and services will vary depending on Cactus's particular business model. For example, if Cactus, Inc. operates in the technology sector, its revenue might come from software licenses, hardware sales, and cloud service subscriptions. Alternatively, if it is in the retail sector, revenue would primarily be derived from the sale of goods. Understanding these sources provides a foundation for further analysis.

Analyzing the year-over-year revenue growth rate provides insights into Cactus, Inc.'s performance over time. By comparing revenue from one year to the next, we can determine whether the company is experiencing growth, stagnation, or decline. This rate is expressed as a percentage increase or decrease. For example, a 10% year-over-year increase indicates that the company's revenue has grown by 10% compared to the previous year. Historical trends in revenue growth can reveal patterns and potential future performance.

Contribution of different business segments to overall revenue highlights which areas of the company are most successful. If Cactus, Inc. operates in multiple segments, such as different product lines or geographic regions, analyzing the revenue contribution of each segment helps identify strengths and weaknesses. For instance, one segment might contribute 60% of the total revenue while another contributes only 10%. This information is crucial for strategic decision-making and resource allocation.

Significant changes in revenue streams should also be closely examined. These changes could result from various factors, such as new product launches, market shifts, or strategic acquisitions. For example, if Cactus, Inc. introduces a new product that gains rapid market acceptance, it could lead to a substantial increase in revenue from that particular product line. Conversely, if a key market experiences an economic downturn, it could negatively impact revenue from that region. Analyzing these changes helps investors understand the dynamics of Cactus, Inc.'s business and its ability to adapt to evolving market conditions.

Below is a sample table illustrating how revenue segments might be broken down. Note that this is illustrative and not actual data for Cactus, Inc.

For more in-depth insights into Cactus, Inc.'s financial health, check out: Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors

Cactus, Inc. (WHD) Profitability Metrics

Understanding Cactus, Inc.'s (WHD) profitability involves examining several key metrics that reflect the company's financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, each providing unique insights into how effectively Cactus, Inc. manages its costs and generates earnings.

Analyzing these figures over time helps to identify trends and patterns, revealing whether the company's profitability is improving, declining, or remaining stable. Additionally, comparing Cactus, Inc.'s profitability ratios with industry averages offers a benchmark to assess its competitive positioning and performance relative to its peers. Effective cost management and favorable gross margin trends are crucial for sustaining and enhancing profitability.

Let's delve into specific profitability aspects of Cactus, Inc.:

Gross Profit Margin:

The gross profit margin indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). For Cactus, Inc., monitoring the gross profit margin helps evaluate the efficiency of its production and pricing strategies. A higher gross profit margin suggests that the company is effectively managing its production costs and/or selling products at a premium.

Operating Profit Margin:

The operating profit margin, also known as the earnings before interest and taxes (EBIT) margin, reflects the percentage of revenue remaining after deducting both the cost of goods sold and operating expenses. This metric provides insights into the company's profitability from its core business operations, excluding the effects of financing and taxes. A rising operating profit margin typically indicates improved operational efficiency and cost control.

Net Profit Margin:

The net profit margin is the percentage of revenue that remains as net income after deducting all expenses, including COGS, operating expenses, interest, and taxes. It represents the ultimate profitability of the company and is a critical measure for investors. A higher net profit margin signifies that Cactus, Inc. is effectively managing all aspects of its income statement.

To provide a clearer picture, here's a hypothetical comparison of Cactus, Inc.'s profitability ratios against industry averages:

In this hypothetical scenario, Cactus, Inc. outperforms the industry average across all three profitability metrics, suggesting a strong competitive position and efficient management practices.

Furthermore, operational efficiency plays a vital role in profitability. Effective cost management, including controlling production costs, administrative expenses, and marketing expenditures, directly impacts the bottom line. Monitoring gross margin trends helps to identify areas where costs can be reduced or pricing strategies optimized.

For additional insights into Cactus, Inc.'s mission, vision, and core values, you can refer to Mission Statement, Vision, & Core Values of Cactus, Inc. (WHD).

Cactus, Inc. (WHD) Debt vs. Equity Structure

Understanding how Cactus, Inc. (WHD) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity.

Here’s a detailed look at Cactus, Inc. (WHD)’s debt versus equity:

Overview of Cactus, Inc. (WHD)'s Debt Levels

Cactus, Inc. (WHD) has a mix of short-term and long-term debt, which is typical for companies in the energy sector. As of the fiscal year 2024, it's important to note:

• Short-term debt: This includes obligations due within one year, such as accounts payable, short-term loans, and the current portion of long-term debt.
• Long-term debt: This consists of obligations due beyond one year, such as bonds and long-term loans.

The specific amounts for each can be found in Cactus, Inc. (WHD)'s latest financial statements.

Debt-to-Equity Ratio

The debt-to-equity ratio is a key metric to assess Cactus, Inc. (WHD)'s financial leverage. It is calculated by dividing total liabilities by total equity. A higher ratio indicates that the company relies more on debt financing, which can increase financial risk. Conversely, a lower ratio suggests a more conservative approach.

For Cactus, Inc. (WHD), the debt-to-equity ratio for the fiscal year 2024 should be compared against industry averages to determine whether the company's leverage is within a reasonable range. Here is a hypothetical example:

In this example, Cactus, Inc. (WHD)'s debt-to-equity ratio is lower than the industry average, indicating a relatively lower level of financial leverage.

Recent Debt Issuances and Credit Ratings

Recent activities, such as debt issuances, credit ratings, or refinancing, can significantly impact Cactus, Inc. (WHD)'s financial health. For instance:

• Debt Issuances: Any new bonds or loans issued in 2024 would increase the company's debt levels.
• Credit Ratings: Ratings from agencies like Standard & Poor's, Moody's, and Fitch provide insights into Cactus, Inc. (WHD)'s creditworthiness.
• Refinancing: Refinancing activities might lower interest rates or extend the debt maturity schedule, improving financial flexibility.

Balancing Debt and Equity

Cactus, Inc. (WHD) must strategically balance debt and equity to fund its growth. Debt financing can provide capital without diluting ownership, but it also increases financial risk. Equity financing, on the other hand, can reduce financial risk but may dilute existing shareholders' ownership.

The company’s approach to balancing debt and equity depends on several factors, including:

• Growth Opportunities: High-growth phases may justify higher debt levels.
• Market Conditions: Favorable equity markets may encourage equity financing.
• Interest Rates: Low interest rates can make debt financing more attractive.

For further insights into Cactus, Inc. (WHD)'s financial health, check out: Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors

Cactus, Inc. (WHD) Liquidity and Solvency

Analyzing Cactus, Inc.'s (WHD) financial health involves a close examination of its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations. Key metrics and trends provide insights into the company's financial stability.

Assessing Cactus, Inc.'s Liquidity:

• Current and Quick Ratios: These ratios measure Cactus, Inc.'s ability to cover its short-term liabilities with its short-term assets.

For the fiscal year 2024, Cactus, Inc. reported a current ratio of 2.1 and a quick ratio of 1.6. These values indicate a strong liquidity position, suggesting the company has sufficient liquid assets to cover its short-term liabilities.

• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates the company's operational efficiency and short-term financial health.

Cactus, Inc.'s working capital at the end of 2024 was $424.7 million, compared to $383.2 million at the end of 2023, representing an increase of $41.5 million. This positive trend suggests improved short-term financial management.

• Cash Flow Statements Overview: Examining the cash flow statement provides insights into the company's cash generation and usage from operating, investing, and financing activities.

Here’s an overview of Cactus, Inc.’s cash flow activities for the fiscal year 2024:

Cactus, Inc. generated $179.4 million in net cash from operating activities, indicating strong core business performance. Investing activities used $27.3 million, while financing activities used $76.9 million, primarily for debt repayments and stock repurchases. Overall, the company saw a net increase in cash and cash equivalents of $75.2 million.

• Potential Liquidity Concerns or Strengths: Based on the analyzed data, Cactus, Inc. exhibits several liquidity strengths. The current and quick ratios are healthy, and the increase in working capital indicates improved short-term financial management.

Moreover, positive cash flow from operations further supports the company's liquidity position. There are no immediate liquidity concerns evident from the provided data. You might also be interested in: Mission Statement, Vision, & Core Values of Cactus, Inc. (WHD).

Cactus, Inc. (WHD) Valuation Analysis

When evaluating whether Cactus, Inc. (WHD) is overvalued or undervalued, several key financial metrics and market indicators should be considered. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

Here's a breakdown of these elements:

• Price-to-Earnings (P/E) Ratio:
  • As of April 17, 2025, Cactus's P/E ratio is 13.55.
  • Morningstar data from April 18, 2025, indicates a normalized P/E ratio of 13.47.
  • According to Fox Business data, the current P/E is 14.117 and the forward P/E is 13.22.
  • Macrotrends data shows a P/E ratio of 19.14 as of April 11, 2025.
  • FullRatio reports that the P/E ratio has decreased by 32% from the past four quarters, with an average of 19.9.
• Price-to-Book (P/B) Ratio:
  • Morningstar data from April 18, 2025, shows a Price/Book Value of 2.41.
  • CompaniesMarketCap reports a P/B ratio of 1.94 as of April 2025.
  • Investing.com states the latest twelve months price/book is 2.4x.
  • Fox Business data indicates a Price to Book Ratio of 3.713.
  • Value Research reports a P/B ratio of 3.01.
• Enterprise Value-to-EBITDA (EV/EBITDA):
  • Seeking Alpha reports an EV/EBITDA (TTM) of 6.76.
  • GuruFocus indicates an EV/EBITDA of 6.55.
  • Fox Business data shows an Enterprise Value to EBITDA of 12.435.
  • Stock Analysis data indicates an EV/EBITDA of 7.41.
  • A Discounted Free Cash Flow model calculates Exit EBITDA Multiple (EV/EBITDA) as 6.218.

Here is a table summarizing the valuation metrics for Cactus, Inc. (WHD):

Analyzing these ratios can provide insights into whether the stock is undervalued or overvalued compared to its earnings, book value, and operational cash flow.

Stock Price Trends:

• The 52-week range is $33.80 - $70.01.
• Today's range: $36.22 - $38.78.
• Cactus Inc. reached its all-time high on November 11, 2024, with a price of $70.01.
• As of April 18, 2025, the stock price is approximately $37.81.

Monitoring these trends helps in understanding the stock's volatility and potential investment opportunities.

Dividend Yield and Payout Ratios:

• The forward dividend yield is approximately 1.38%.
• The dividend payout ratio is 18.84%, which is considered sustainable.
• The forward annual dividend rate is $0.52 per share.

These figures are essential for investors seeking income through dividends.

Analyst Consensus:

• The consensus rating is 'Hold'.
• The average price target is $53.80 - $57.50, suggesting a potential upside.
• Wall Street analysts predict that Cactus's share price could reach $57.50 by April 15, 2026.

Analysts' recommendations and price targets provide additional perspectives on the stock's potential future performance.

For further insights into Cactus, Inc.'s investors, consider reading Exploring Cactus, Inc. (WHD) Investor Profile: Who’s Buying and Why?

Cactus, Inc. (WHD) Risk Factors

Assessing the financial health of Cactus, Inc. (WHD) requires a thorough understanding of the various risks it faces, both internal and external. These risks can significantly impact the company's performance and, consequently, its valuation.

Here's an overview of key risks impacting Cactus, Inc. (WHD):

• Industry Competition: The oil and gas industry is highly competitive. Cactus, Inc. (WHD) faces competition from both large, established companies and smaller, regional players. Intense competition can lead to pricing pressures, reduced market share, and decreased profitability.
• Regulatory Changes: The oil and gas industry is subject to extensive regulations related to environmental protection, safety, and permitting. Changes in these regulations can increase compliance costs, delay projects, and limit the company's operational flexibility.
• Market Conditions: The demand for oil and gas is influenced by global economic conditions, geopolitical events, and technological advancements. Economic downturns, oversupply situations, or shifts towards alternative energy sources can negatively impact the company's revenue and profitability.
• Commodity Price Volatility: Cactus, Inc. (WHD)'s financial performance is closely tied to commodity prices. Significant fluctuations in oil and gas prices can impact the company's revenue, profitability, and investment decisions.
• Operational Risks: These include equipment failures, accidents, and disruptions to operations due to weather or other unforeseen events. Such events can lead to production losses, increased costs, and potential liabilities.

To mitigate these risks, Cactus, Inc. (WHD) may implement various strategies, such as:

• Diversifying its service offerings to reduce reliance on specific market segments.
• Investing in technology and innovation to improve operational efficiency and reduce costs.
• Implementing robust risk management programs to identify, assess, and mitigate potential risks.
• Maintaining a strong balance sheet to provide financial flexibility during periods of market volatility.
• Adhering to strict safety and environmental standards to minimize operational risks and ensure regulatory compliance.

Investors can stay informed about these risks by carefully reviewing Cactus, Inc. (WHD)'s annual reports (Form 10-K), quarterly reports (Form 10-Q), and other filings with the Securities and Exchange Commission (SEC). These documents provide detailed information about the company's risk factors, financial performance, and management's assessment of the business environment. For example, the 10-K filing includes a dedicated section on risk factors that outlines the most significant risks facing the company.

More information on Cactus, Inc. (WHD) can be found here: Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors

Cactus, Inc. (WHD) Growth Opportunities

Cactus, Inc. (WHD) operates within the energy sector, specifically focusing on the design, manufacture, and sale of wellheads and pressure control equipment. Understanding the drivers behind its potential growth requires an examination of its innovative products, strategic market expansions, and overall competitive positioning.

Several factors could propel Cactus, Inc. (WHD) forward:

• Product Innovations: Continued investment in research and development to enhance existing product lines and introduce new technologies for well construction, completion, and intervention.
• Market Expansions: Targeting geographical regions with increasing drilling activities, including both onshore and offshore markets.
• Strategic Acquisitions: Pursuing acquisitions to broaden product offerings, expand market presence, or gain access to new technologies.

While precise revenue growth projections and earnings estimates are subject to market conditions and company-specific strategies, several strategic initiatives and partnerships could significantly influence Cactus, Inc. (WHD)'s growth trajectory. These may include:

• Partnerships with Key Industry Players: Collaborating with major oil and gas companies or service providers to integrate Cactus, Inc. (WHD)'s products into larger projects and gain preferred vendor status.
• Expansion of Service Offerings: Augmenting product sales with value-added services such as installation, maintenance, and training to create recurring revenue streams.
• Technological Advancements: Investing in digital solutions and automation to improve operational efficiency, reduce costs, and enhance customer service.

Cactus, Inc. (WHD) possesses several competitive advantages that could support future growth:

• Strong Brand Reputation: A well-established reputation for quality, reliability, and performance in the wellhead and pressure control equipment market.
• Extensive Distribution Network: A broad distribution network that enables efficient delivery of products and services to customers across key oil and gas regions.
• Skilled Workforce: A team of experienced engineers, technicians, and sales professionals with deep industry knowledge and technical expertise.

To illustrate potential growth, consider a hypothetical scenario where Cactus, Inc. (WHD) successfully introduces a new line of advanced wellhead technology that reduces installation time and enhances safety. If this product gains widespread adoption, it could lead to a significant increase in market share and revenue growth. Similarly, strategic partnerships with major oil and gas companies could provide access to large-scale projects and long-term contracts, further bolstering revenue and earnings.

For further insights into Cactus, Inc. (WHD) and its investors, check out: Exploring Cactus, Inc. (WHD) Investor Profile: Who’s Buying and Why?