Cactus (WHD) Stock Forecast & Price Target

Cactus Inc. has demonstrated strong operational performance with an operating income margin of 23.2%, surpassing forecasts and reflecting sequential improvement, despite a year-over-year tightening. The company's flagship SafeDrill® wellhead system continues to excel in the market, contributing to expectations of sustained market share growth, while the Spoolable Technologies segment has achieved record international revenue, positioning the company favorably on the global stage. Additionally, the acquisition of Baker Hughes’s SPC business is anticipated to enhance Cactus's international presence, particularly in the Middle East, further supporting positive financial outlooks strengthened by robust adjusted EBITDA margins driven by effective cost management.

Cactus Inc's financial performance indicates a downward trend reflected in its falling adjusted EBITDA margin, which decreased to 29.5% compared to a target of 34.0% and was affected by tariffs. Additionally, the company reported an adjusted EBITDA of $53.1 million, which underperformed estimates by 14.9%, and demonstrated significant declines on both a sequential and year-over-year basis. Revenue streams also displayed weaknesses, with overall revenue of $264.0 million declining 10.0% year-over-year, coupled with expectations of continued revenue deterioration in the Pressure Control segment for the upcoming quarters.