Company Overview
Cactus, Inc. functions as a specialized provider in the energy sector, specifically within the Oil & Gas Equipment & Services industry, where it designs, manufactures, sells, and rents engineered pressure control and spoolable pipe technologies. The company serves a global footprint including the United States, Australia, Canada, the Middle East, and other international markets through two distinct operational segments: Pressure Control and Spoolable Technologies. As a mid-cap enterprise, the company holds a market capitalization of $3.39B and employs approximately 1,500 individuals across its operations. These valuation and revenue figures indicate a substantial market position that allows the firm to maintain significant scale while operating in a capital-intensive equipment and service environment. The annual revenue generated reaches $1.08B, which, when combined with the market cap, suggests a pricing multiple that reflects both current earnings performance and market expectations for the sector.
Financial Health
The financial performance of Cactus, Inc. is characterized by a trailing twelve-month revenue of $1.08B, which generated net income of $166.01M and an EBITDA of $330.42M. The substantial gap between the $1.08B revenue and the $166.01M net income reveals a cost structure where operating expenses and taxes consume approximately 84.6% of top-line revenue, a typical profile for equipment manufacturers with high overheads. Despite the negative free cash flow of $-194,739,008, the company maintains a cash balance of $123.57M against a debt load of only $37.75M, indicating a balance sheet that is highly liquid and relatively unburdened by interest obligations. The company's margins further detail its profitability layers, with a gross margin of 37.0% reflecting manufacturing efficiency, an operating margin of 22.9% showing effective cost control, and a profit margin of 15.4% representing the final earnings available to shareholders. The debt-to-equity ratio stands at 2.63, which, while indicating leverage, is mitigated by the strong current ratio of 5.81, signaling robust short-term liquidity and the ability to meet obligations as they come due. Management effectiveness is highlighted by a return on equity of 15.0% and a return on assets of 8.7%, metrics that demonstrate the firm's ability to generate returns on the capital invested and deployed across its asset base.
Valuation Assessment
Valuation metrics for Cactus, Inc. present a mix of historical earnings multiples and forward-looking expectations, with a trailing P/E ratio of 20.39 and a forward P/E of 14.22. The significant difference between these figures implies that the market anticipates a substantial increase in earnings relative to current levels, as the forward multiple is considerably lower than the trailing one. The price-to-book ratio is recorded at 2.76, indicating that the market values the company at a premium of roughly 176% over its net book value, which often reflects intangible assets or growth potential not fully captured on the balance sheet. Alternative valuation measures such as the price-to-sales ratio of 3.14 and the EV/EBITDA of 10.46 provide context for revenue-based and enterprise value-based comparisons, suggesting the company trades at a moderate premium relative to sales and earnings before interest, taxes, depreciation, and amortization. Price action over the last year shows a 52-week high of $59.25 and a 52-week low of $33.20, with the current trading position situated between these extremes, reflecting market volatility within the energy equipment sector. The beta of 1.29 indicates that the stock exhibits higher price volatility relative to the broader market, moving approximately 29% more than the benchmark index during periods of market fluctuation.
Growth & Income
The growth trajectory for the company is currently contractionary, with revenue growth declining by 4.0% year-over-year and earnings growth contracting by 15.4% year-over-year. The fact that earnings are shrinking at a faster rate than revenue implies that operating leverage is being tested, as fixed costs are eroding profitability more rapidly than top-line declines. The company maintains a dividend yield of 1.2% with a payout ratio of 22.4%, a low distribution rate that suggests management prioritizes retaining cash for operations and maintenance over aggressive shareholder payouts. Given the recent negative free cash flow, the sustainability of the dividend relies heavily on the company's ability to reverse the cash burn trend and restore positive liquidity generation. Overall, the growth and income profile reflects a mature, cyclical business currently experiencing headwinds in demand or pricing, while maintaining a conservative capital allocation strategy through modest dividend payments.