Cactus, Inc.WHD is entering the second half of 2026 with faster earnings growth, expanding international exposure and substantial liquidity. Second-quarter results showed that the Cactus International and FlexSteel acquisitions are broadening the company’s earnings base.
The trade-off is valuation. WHD’s premium multiples, tariff exposure and uneven backlog conversion raise the execution bar even as estimates point to double-digit earnings growth.
Cactus’ Growth Engines Are Broadening
Pressure Control revenues reached $344 million in the second quarter, helped by Cactus International and stronger Middle East deliveries. Spoolable Technologies generated $105.5 million in revenues and adjusted segment EBITDA of $42.1 million, with the margin improving to 39.9%.
The company also received more than $80 million of incremental international Spoolable Technologies orders in July. Including Pressure Control, international purchase orders received after the quarter exceeded $130 million. Baker Hughes Company BKR, whose Surface Pressure Control operations formed the basis of Cactus International, remains a relevant reference point in global oilfield services and equipment.
WHD’s Cash Position Supports Expansion
As of June 30, Cactus had $365.8 million in cash and no bank debt. Second-quarter operating cash flow reached $104.6 million, while net capital expenditures were $15.6 million, giving the company room to fund growth without depending on additional leverage.
Cactus raised its 2026 net capital expenditure guidance to $55-$65 million, mainly for the Baytown Spoolable Technologies facility. The roughly $40 million project could increase Baytown capacity by as much as 20%, with most spending expected in 2027.
WHD’s Premium Valuation Raises the Bar
WHD trades at 3.2X forward 12-month sales, above the sub-industry’s 1.8X and the broader Zacks sector’s 1.4X. It also stands modestly above the stock’s five-year median of 3.0X.
That premium leaves less room for disappointment if international orders, margins or domestic activity soften. The valuation does not negate the growth case, but it makes sustained earnings delivery more important.
Cactus Faces Tariff and Backlog Risks
Pressure Control continues to face a 75% total tariff on most goods sourced from China and a 50% tariff on goods from Vietnam. Steel and high-density polyethylene costs add another source of margin pressure.
Remaining performance obligations ended June at $455.8 million as project deliveries outpaced new awards and negotiations continued with a large Middle East customer. SLB SLB, another global oilfield-services provider with active Middle East wellhead and drilling contracts, illustrates the competitive backdrop for international spending.
WHD’s Earnings Outlook Points to Faster Growth
The Zacks Consensus Estimate calls for current-quarter earnings of 76 cents per share, up 13.4%. Next-quarter earnings are also projected at 76 cents, implying 16.9% growth.
For 2026, the consensus estimate of $3.07 per share indicates 14.1% growth from the prior year. The 2027 estimate rises to $3.54, representing another 15.4% increase and supporting the view that earnings momentum can extend beyond the current year.
Cactus’ Buy Signal Favors Growth and Momentum
WHD’s accelerating earnings outlook, international expansion and debt-free balance sheet strengthen the growth case, while premium valuation and execution risks argue against ignoring price discipline. The stock therefore offers a favorable setup, but not one without meaningful operating and valuation risks.
WHD currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its Growth Score of B, Momentum Score of B and VGM Score of B complement that favorable rank, while the Value Score of C is more consistent with the stock’s richer valuation. Together, those signals favor investors focused on growth and momentum, while suggesting that valuation-sensitive buyers may want to remain selective.
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This article originally published on Zacks Investment Research (zacks.com).