WHD
Cactus, Inc.
$52.99
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Overvalued
Trading 0.1% above fair value
You pay
$52.99
Bear
$34.54
Fair
$52.95
Bull
$76.08
Bear
$34.54
-34.8%
FCF $168M × 10x
Fair
$52.95
-0.1%
FCF $217M × 13x
Bull
$76.08
+43.6%
FCF $266M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
14.8x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $70.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $52.95 per share.
Warnings
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $70.00 (from 18 analysts). Our estimate is 32% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential