Cactus Inc (WHD, Financial), a prominent player in the oil and gas industry, has recently seen a significant uptick in its stock performance. Over the past week, the company's shares have surged by 12.01%, and over the last three months, the stock has gained an impressive 16.23%. Currently, Cactus Inc boasts a market capitalization of $3.47 billion and a stock price of $52.86. According to GuruFocus's valuation metrics, the stock is significantly undervalued with a current GF Value of $90.42, a substantial increase from its past GF Value of $75.3. This valuation shift from a possible value trap to being significantly undervalued indicates a positive reassessment of the company's future growth prospects and intrinsic value.
Overview of Cactus Inc
Cactus Inc specializes in the design, manufacture, and sale of wellheads and pressure control equipment. Its offerings are crucial for the efficient operation of onshore unconventional oil and gas wells, particularly during the drilling, completion, and production phases. The company operates through two main segments: Pressure Control and Spoolable Technologies, with the former being the primary revenue generator. Cactus Inc not only sells these products but also provides essential field services and equipment rentals, which include installation, maintenance, and repair services. 
Profitability Insights
Cactus Inc's financial health is robust, reflected in its high Profitability Rank of 7/10. The company's operating margin stands at 26.73%, which is better than 77.63% of its peers in the industry. Additionally, its Return on Equity (ROE) of 20.26% and Return on Assets (ROA) of 10.93% are superior to 79.78% and 85.44% of industry counterparts, respectively. The Return on Invested Capital (ROIC) is also impressive at 18.54%, ranking better than 90.7% of similar companies. These metrics not only demonstrate Cactus Inc's ability to generate profits but also its efficiency in utilizing its assets and equity. 
Growth Trajectory
The company's Growth Rank is an exceptional 9/10. Over the past three years, Cactus Inc has achieved a revenue growth rate per share of 44.10%, outperforming 87.97% of its industry peers. While its five-year revenue growth rate per share shows a decline of 1.40%, its future revenue growth rate for the next three to five years is estimated at 19.00%, indicating strong potential for revenue acceleration. Furthermore, the EPS growth without NRI over the past three years is a robust 54.30%, and the estimated EPS growth rate for the next three to five years is an impressive 23.50%. These growth metrics underscore Cactus Inc's capacity to expand its earnings significantly in the near future. 
Investor Confidence
Notable investors have shown confidence in Cactus Inc's potential. Ken Fisher (Trades, Portfolio) holds 311,289 shares, representing 0.47% of the shares outstanding. HOTCHKIS & WILEY and Chuck Royce (Trades, Portfolio) also have significant holdings, with 271,220 and 261,257 shares, respectively. Their investments underscore a strong belief in the company's value and future growth prospects.
Competitive Landscape
When compared to its competitors, Cactus Inc holds a strong position. Liberty Energy Inc (LBRT, Financial) with a market cap of $3.81 billion, Tidewater Inc (TDW, Financial) at $5.43 billion, and USA Compression Partners LP (USAC, Financial) at $2.8 billion are key players in the same industry. Cactus Inc's competitive edge is maintained through its specialized product offerings and strong market presence.
Conclusion
In conclusion, Cactus Inc's recent stock performance is a reflection of its strong fundamentals, robust profitability, and promising growth trajectory. The company's current valuation suggests that it is significantly undervalued, presenting a potentially attractive opportunity for investors. With solid financials, strategic market positioning, and the backing of notable investors, Cactus Inc is well-positioned to continue its upward trajectory in the competitive oil and gas industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
