• Wondering if Cactus at around US$46.70 is priced attractively or already reflects its strengths? This article walks through the key signals that matter for valuation-focused investors.
• The stock has seen a 2.2% decline over the last week and a 13.5% decline over the last month, while still showing returns of 3.2% over 1 year, 11.4% over 3 years and 58.7% over 5 years.
• These moves sit against a backdrop where investors are watching sector-wide sentiment and company-specific developments closely, with Cactus continuing to attract attention as a specialist in its space. The recent price performance provides a timely chance to reassess whether the current market value aligns with your expectations.
• Cactus currently has a valuation score of 5 out of 6. The rest of this article will walk through the main valuation approaches used to reach that score and will highlight a broader, more holistic way to think about value at the end.

Approach 1: Cactus Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes the cash that a business is expected to generate in the future, then discounts those amounts back to today to estimate what the company could be worth now.

For Cactus, the latest twelve month Free Cash Flow (FCF) is about $218.6 million. Using a 2 Stage Free Cash Flow to Equity model, analysts and extrapolated estimates point to FCF of $234.8 million in 2026 and $294.7 million in 2027, reaching $315.0 million in 2028. Beyond the analyst horizon, Simply Wall St extrapolates FCF out to 2035, with each future cash flow discounted back to today in dollar terms.

Adding these discounted cash flows together, plus an estimate for value beyond the explicit forecast period, gives an intrinsic value of about $103.66 per share. Compared with the recent share price of around $46.70, this DCF output implies the stock is about 55.0% undervalued based on these assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Cactus is undervalued by 55.0%. Track this in your watchlist or portfolio, or discover 63 more high quality undervalued stocks.

Approach 2: Cactus Price vs Earnings

For profitable companies, the P/E ratio is a straightforward way to connect what you pay for each share with the earnings that support that price. It helps you see how much the market is willing to pay for each dollar of earnings.

What counts as a “normal” P/E often reflects expectations for future growth and the level of risk investors see in the business. Higher expected growth or lower perceived risk can justify a higher P/E, while slower expected growth or higher risk usually points to a lower multiple.

Cactus currently trades on a P/E of 19.38x. This is below the Energy Services industry average P/E of 29.54x and also below the peer group average of 39.32x. Simply Wall St’s Fair Ratio for Cactus is 19.34x. This Fair Ratio is a proprietary estimate of what the P/E could be given factors such as earnings growth, profit margins, industry, market cap and company specific risks.

Because the Fair Ratio adjusts for these company specific inputs, it gives a more tailored view than simple comparisons with industry or peers. With Cactus at 19.38x versus a Fair Ratio of 19.34x, the current valuation looks very close to that modelled level.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your Cactus Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives help you attach a clear story to your numbers by spelling out what you think happens to Cactus’s revenue, earnings and margins, translating that into a forecast and then into a Fair Value that you can compare with today’s price.

On Simply Wall St’s Community page, Narratives are presented as simple, guided setups used by millions of investors. You can pick or adjust assumptions rather than build a spreadsheet from scratch, and then see how your view compares with other perspectives.

Because each Narrative is tied to a Fair Value, it can support decisions about when to buy or sell by showing whether your Fair Value sits above or below the current market price. It also updates automatically when new results or news are added so your view stays aligned with fresh information instead of going stale.

For Cactus, for example, one bullish Narrative currently points to a Fair Value of about US$69.00 per share, while a more cautious one points to about US$42.00. Seeing that range side by side can help you decide which story feels closer to your expectations before you act.

For Cactus however we will make it really easy for you with previews of two leading Cactus Narratives:

These sit on opposite sides of the fence, so you can quickly see how different assumptions on growth, margins and risks translate into very different views of what the shares could be worth.

Fair value: US$56.56 per share

Implied undervaluation versus the recent US$46.70 price: about 17.4%

Analyst revenue growth assumption: 16.28% a year

• Analysts see international expansion, especially through the Baker Hughes Surface Pressure Control and FlexSteel deals, as widening Cactus’s footprint and customer base while building more recurring revenue.
• Supply chain work, including shifting sourcing to Vietnam and focusing on efficiency and premium wellhead systems such as SafeDrill, is expected to support margins and free cash flow, even if demand is not strong across every market.
• This view rests on Cactus reaching about US$1.7b of revenue and US$257.0m of earnings by 2029, with the shares trading on a P/E of 19.0x and discounted back at 7.1%.

Fair value: US$42.00 per share

Implied overvaluation versus the recent US$46.70 price: about 11.2%

Bear case revenue growth assumption: 16.88% a year

• More cautious analysts focus on the reliance on tariff workarounds, Vietnam sourcing and surcharges to hold margins, and see a risk that shifts in trade policy or partner pushback could compress profitability.
• Greater exposure to long lead international projects and the Baker Hughes Surface Pressure Control acquisition brings timing, integration and execution risks that could make earnings and cash flow more uneven.
• This view assumes earnings reach about US$213.1m by 2029, with margins easing to 12.2% and the shares trading on a 16.9x P/E, discounted back at 7.07%.

Taken together, these Narratives frame a fair value range from roughly US$42.00 to US$56.56, with different weight on international growth, margin resilience and acquisition execution. Your next step is to decide which story lines up more closely with your own expectations before you act.

To see how these two viewpoints compare with the full set of community Narratives, and to track how the story changes as new data arrives, head over to the Cactus page on Simply Wall St and review the wider spread of fair values.

Do you think there's more to the story for Cactus? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.