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News Flash: Analysts Just Made A Sizeable Upgrade To Their Cactus, Inc. (NYSE:WHD) Forecasts

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Simply Wall St
·3 min read
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Celebrations may be in order for Cactus, Inc. (NYSE:WHD) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The stock price has risen 5.7% to US$34.66 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Cactus from its seven analysts is for revenues of US$384m in 2021 which, if met, would be a solid 10% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$346m of revenue in 2021. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

View our latest analysis for Cactus

earnings-and-revenue-growth
earnings-and-revenue-growth

Additionally, the consensus price target for Cactus increased 9.9% to US$31.46, showing a clear increase in optimism from the analysts involved. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Cactus analyst has a price target of US$39.00 per share, while the most pessimistic values it at US$25.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Cactus' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% per year. So it's pretty clear that, while Cactus' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Cactus.

Need some more information? At least one of Cactus' seven analysts has provided estimates out to 2023, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.