HomeMost PopularInvestingThe Rise of Cactus (WHD): Unveiling Q4 Triumphs Through Spoolable Technologies

The Rise of Cactus (WHD): Unveiling Q4 Triumphs Through Spoolable Technologies

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Cactus, Inc. managed to outshine expectations with its fourth-quarter 2023 adjusted earnings, clocking in at 81 cents per share; a notable beat on the Zacks Consensus Estimate of 68 cents and a considerable jump from the previous year’s 57 cents earnings. The company also flaunted robust total quarterly revenues of $275 million, outperforming the Zacks Consensus Estimate of $267 million and marking significant improvement from the $188 million in the year-ago quarter.

The Backbone: Spoolable Technologies

The stellar performance in the fourth quarter can be majorly attributed to the brilliance of the Spoolable Technologies segment, shining as a beacon of success for Cactus, Inc. amidst the financial landscape. The company’s strategic focus on this particular sector has proven to be a wise move, propelling it to new heights of achievement.

Navigating Business Segments

With the conclusion of the FlexSteel acquisition, Cactus now stands tall, operating under two distinctive business segments – Pressure Control and Spoolable Technologies. While the Pressure Control segment faced challenges with a decline in equipment sales, the Spoolable Technologies segment spearheaded growth with revenues of $94.4 million, successfully surpassing pre-set expectations, portraying Cactus, Inc.β€˜s resilience and adaptability in the ever-changing market.

Financial Fortitude: Capex and Cash Flow

Venturing into the financial arena, Cactus, Inc. boasted a capital expenditure and other outlays hitting $44 million in 2023, endowing the company with substantial operational cash flow of $91.7 million for the fourth quarter. This financial robustness sets a solid foundation for future growth and expansion endeavors.

A Peek into the Future: Outlook

The crystal ball reveals a promising first quarter of 2024 for Cactus, Inc., with expectations of stable U.S. land activity levels. Despite a moderate outlook for U.S. land drilling and completion activity, the company’s proactive measures to boost margins and diversify revenue streams spotlight its commitment to sustained growth. As the company charts its course for 2024, net capital expenditures are forecasted to hover between $45-$55 million.

Final Verdict: Zacks Rank and Key Picks

With a current Zacks Rank #4 (Sell), Cactus, Inc. opens avenues for investors to explore other lucrative options within the energy sector. Stocks like Energy Transfer LP (ET), Archrock Inc (AROC), and Repsol (REPYY) present as strong contenders with Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) respectively, paving the way for potential growth and profitability.

The thriving journey of Cactus, Inc. through the infusion of innovative strategies and market acumen vividly delineates its trajectory towards sustainable success, beckoning investors and stakeholders to partake in its growth saga.

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