| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 83.02 | 48 |
| Intrinsic value (DCF) | 35.89 | -36 |
| Graham-Dodd Method | 19.43 | -65 |
| Graham Formula | 30.72 | -45 |
Cactus, Inc. (NYSE: WHD) is a leading provider of wellhead and pressure control equipment for the oil and gas industry, specializing in onshore unconventional wells. Headquartered in Houston, Texas, the company designs, manufactures, sells, and rents critical drilling and production equipment, including its proprietary Cactus SafeDrill wellhead systems, SafeLink monobore solutions, and frac stacks. With a strong presence in the U.S. and international markets like Australia, China, and Saudi Arabia, Cactus supports the full lifecycle of oil and gas wells—from drilling to production. The company operates 15 service centers in the U.S. and three in Eastern Australia, offering 24/7 field services for installation, maintenance, and repair. Founded in 2011, Cactus has established itself as a key player in the energy sector, combining innovative engineering with reliable service to meet the demands of modern hydrocarbon extraction. Its focus on safety and efficiency makes it a trusted partner for upstream operators in volatile energy markets.
Cactus, Inc. presents a compelling investment case due to its strong market position in wellhead and pressure control equipment, a sector benefiting from sustained demand in unconventional oil and gas drilling. The company’s revenue of $1.13 billion (FY 2024) and net income of $185.4 million reflect robust operational performance, supported by high-margin rental and service offerings. With a manageable debt load ($41.7 million) and solid cash reserves ($342.8 million), Cactus maintains financial flexibility. However, its beta of 1.5 indicates higher volatility tied to oil price fluctuations and cyclical industry risks. The dividend yield (~1.8%) provides modest income, but investors should weigh exposure to capex cycles in energy. Long-term growth hinges on international expansion and technological differentiation in pressure control systems.
Cactus, Inc. competes in the fragmented oilfield equipment market by leveraging its vertically integrated model—combining manufacturing, rental, and field services. Its competitive edge lies in proprietary products like the SafeDrill system, which enhances wellhead safety and efficiency, reducing downtime for operators. The company’s asset-light rental strategy mitigates capital intensity while fostering recurring revenue. Geographically, its U.S. dominance (85%+ of revenue) is complemented by strategic footholds in Australia and the Middle East, where demand for unconventional well expertise is growing. Unlike larger peers, Cactus focuses narrowly on pressure control, avoiding commoditized segments like drilling rigs. However, it faces pricing pressure from low-cost manufacturers and relies on shale activity levels. Competitors with broader service portfolios (e.g., Schlumberger) offer bundled solutions, but Cactus counters with faster response times via localized service centers. Its R&D focus on modular equipment aligns with industry trends toward automation and cost reduction. The main risks include customer concentration (top clients drive ~30% of sales) and exposure to North American shale cycles.