Now (DNOW) AI Stock Analysis

• Market Cap: $2.07B
• Dividend Yield: N/A
• Average Volume (3M): 3.62M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.13
• Revenue Growth: 3.18%
• EPS Growth: -53.71%
• Country: US
• Employees: 2,575
• Sector: Industrials
• Sector Strength: 72
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.15
• Shares Outstanding: 186,346,150
• 10 Day Avg. Volume: 3,633,703
• 30 Day Avg. Volume: 3,622,536
• PEG Ratio: 0.09
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.55
• P/FCF Ratio: 11.67
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 0.64
• Enterprise Value/Gross Profit: 3.80
• Enterprise Value/Ebitda: -60.53
• 1Y Price Target: $16.00
• Price Target Upside: 43.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.84
• Revenue Forecast (FY): $4.91B

• Rating: 54 Neutral
• Price Target: $12.50 ▲(12.41% Upside)
• Action: Downgraded Date: 03/03/26
• Date: Action: Downgraded 03/03/26

The score is driven primarily by middling financial performance—solid revenue and cash generation but a sharp 2025 profitability setback and higher leverage risk. Technicals are notably bearish (below key moving averages with negative MACD), while valuation is weak due to losses and no dividend metric. Earnings-call commentary is cautiously constructive on synergies, liquidity and cash generation, but delayed guidance due to ERP/integration uncertainty caps the overall score.

Positive Factors

Scale expansion from MRC Global merger

The completed merger meaningfully enlarges DNOW's scale and purchasing power, expanding addressable markets across upstream, midstream, gas utilities, downstream and industrial end-markets. Larger scale supports supplier leverage, cross-sell opportunities and multi-year cost synergies ($70M target, $23M year-one) that can sustainably improve margins and competitive positioning.

Sustained revenue growth trend

DNOW reported its fifth consecutive year of revenue growth, driven by both legacy DNOW strength and contribution from MRC Global. Persistent top-line expansion across geographies and new end-markets demonstrates durable demand for distribution and supply-chain services, supporting long-term scale economics and the opportunity to convert revenue into higher operating leverage as integration progresses.

Positive cash generation and strong liquidity

Despite 2025 profitability disruption, DNOW produced positive operating and free cash flow and maintained substantial liquidity (cash plus an available credit facility). Consistent cash generation and ample facility capacity provide financial flexibility for integration investments, working capital support and disciplined capital returns (share repurchase program), underpinning multi-quarter resilience.

Negative Factors

Material ERP disruption in legacy MRC U.S.

The MRC U.S. Oracle ERP go-live created persistent operational problems—order delays, system slowness and impaired customer service—across a business that represents ~40% of consolidated activity. This is a structural execution risk: prolonged ERP instability can erode customer relationships, raise safety stock and permanent SG&A, and delay realization of projected synergies until systems stabilize.

Return to net loss and margin compression

A sharp swing to a GAAP net loss and multi-percentage-point gross margin deterioration highlight earnings volatility. Sustained margin weakness undermines ROE and free cash conversion, making it harder to deleverage and fund integration costs. Earnings instability also increases sensitivity to cyclical end-market slowdowns and reduces confidence in durable profitability improvement.

Elevated working capital and inventory build

A large inventory build and high working-capital-to-revenue ratio tie up cash and raise financing and operational risk. Higher safety stock and stretched receivables increase funding needs and margin exposure to inventory accounting. Until integration and ERP issues normalize turns and DSO, elevated working capital will constrain free cash flow and slow planned deleveraging.

Now Business Overview & Revenue Model

Company Description

Dnow Inc. distributes downstream energy and industrial products for petroleum refining, chemical processing, LNG terminals, power generation utilities, and industrial manufacturing operations in the United States, Canada, and internationally. The company offers its products under the DistributionNOW and DNOW brand names. It provides consumable maintenance, repair, and operating supplies; pipes, valves, fittings, flanges, gaskets, fasteners, electrical products, instrumentations, artificial lift, pumping solutions, valve actuation and modular process, and measurement and control equipment; and mill supplies, tools, safety supplies, and personal protective equipment, as well as applied products and applications, such as artificial lift systems, coatings, and miscellaneous expendable items. The company also offers original equipment manufacturer equipment, including pumps, generator sets, air and gas compressors, dryers, blowers, mixers, and valves; modular oil and gas tank battery solutions; and application systems, work processes, parts integration, optimization solutions, and after-sales support services. In addition, it provides supply chain and materials management solutions that include procurement, inventory planning and management, and warehouse management, as well as solutions for logistics, point-of-issue technology, project management, business process, and performance metrics reporting services. The company serves customers through a network of approximately 180 locations in the upstream, midstream, and downstream sectors of the energy industry, including drilling contractors, well-servicing companies, independent and national oil and gas companies, midstream operators, and refineries, as well as petrochemical, chemical, utilities, and other downstream energy processors; and industrial and manufacturing companies. NOW Inc. was founded in 1862 and is headquartered in Houston, Texas.

How the Company Makes Money

DNOW generates revenue primarily through the sale of industrial products and services to the energy sector, including oil and gas companies. The company's revenue model is based on multiple key streams: direct sales of products such as pipes, valves, fittings, and other equipment, as well as service contracts for logistics, inventory management, and procurement solutions. Additionally, DNOW benefits from strong partnerships with manufacturers and suppliers, allowing them to offer competitive pricing and a diverse product range. Seasonal fluctuations in oil and gas demand can impact revenue, but the company also seeks to diversify its earnings through strategic ventures and expansion into new markets.

Now Financial Statement Overview

Summary

Revenue growth is strong into 2025, and operating/free cash flow remained positive, but profitability deteriorated sharply with a return to net losses and margin compression. Balance sheet leverage is still manageable, yet debt rose meaningfully versus prior years, increasing risk if margins do not rebound.

Income Statement

Revenue has grown strongly into 2025 (up ~16% in 2025 vs. essentially flat in 2024), but profitability deteriorated materially: the company moved from positive net income in 2024 ($81M) to a net loss in 2025 (-$89M), with negative operating profit and compressed gross margin (about 17% in 2025 vs. ~23% in 2023–2024). While the multi-year top-line trajectory is positive since 2021, earnings volatility (including large losses in 2020 and again in 2025) reduces confidence in consistency.

Balance Sheet

Leverage looks manageable on a debt-to-equity basis in 2025 (~0.30), but it increased sharply versus 2023–2024 (near ~0.04), signaling a meaningful step-up in balance sheet risk. Equity remains sizable ($2.24B in 2025), providing a cushion, but negative return on equity in 2025 reflects the return to losses and weak profitability support for the higher debt load.

Cash Flow

Cash generation is a relative bright spot: operating cash flow remained positive in 2025 ($155M) and free cash flow was also positive ($134M). However, cash flow weakened versus 2024 (free cash flow down ~24%), and results have shown variability historically (including negative free cash flow in 2022). Overall, the company is still producing cash, but the downshift alongside 2025 net losses is a key watch item.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.82B	2.37B	2.32B	2.14B	1.63B
Gross Profit	478.00M	535.00M	535.00M	506.00M	357.00M
EBITDA	-48.00M	153.00M	166.00M	160.00M	39.00M
Net Income	-89.00M	81.00M	247.00M	128.00M	5.00M
Balance Sheet
Total Assets	3.92B	1.62B	1.53B	1.32B	1.10B
Cash, Cash Equivalents and Short-Term Investments	164.00M	256.00M	299.00M	212.00M	313.00M
Total Debt	669.00M	42.00M	41.00M	38.00M	32.00M
Total Liabilities	1.69B	493.00M	466.00M	476.00M	392.00M
Stockholders Equity	2.24B	1.12B	1.06B	842.00M	711.00M
Cash Flow
Free Cash Flow	134.00M	289.00M	171.00M	-9.00M	25.00M
Operating Cash Flow	155.00M	298.00M	188.00M	0.00	30.00M
Investing Cash Flow	-590.00M	-304.00M	-48.00M	-87.00M	-96.00M
Financing Cash Flow	339.00M	-33.00M	-55.00M	-10.00M	-6.00M

Now Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNOW, the sentiment is Negative. The current price of 11.12 is below the 20-day moving average (MA) of 12.27, below the 50-day MA of 13.87, and below the 200-day MA of 14.43, indicating a bearish trend. The MACD of -0.88 indicates Positive momentum. The RSI at 29.45 is Positive, neither overbought nor oversold. The STOCH value of 15.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DNOW.

Now Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FLOC	74 Outperform	$2.07B	12.21	43.60%	1.32%	―	―
XPRO	73 Outperform	$1.93B	29.70	4.60%	―	-1.24%	337.41%
LBRT	66 Neutral	$5.05B	20.22	7.25%	1.78%	-12.05%	-46.45%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AESI	62 Neutral	$1.74B	-22.93	-4.02%	10.12%	20.68%	-112.42%
DNOW	54 Neutral	$2.07B	-3.49	-5.25%	―	3.18%	-53.71%

Now Corporate Events

DNOW Announces Planned Board Transition as Director Departs

On February 25, 2026, DNOW Inc. announced that Board member Rodney Eads has notified the company he will not stand for reelection at the 2026 annual meeting of stockholders, and will step off the Board when his current term expires at that meeting. The company emphasized that Eads’ departure is not due to any disagreement over operations, policies or practices, suggesting an orderly governance transition and signaling stability in its strategic direction.

The Board of Directors publicly thanked Eads for his dedicated service, underscoring a cordial separation and continuity of boardroom relations. For investors and other stakeholders, the announcement frames the upcoming board change as routine succession rather than a sign of internal conflict or strategic upheaval.

The most recent analyst rating on (DNOW) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Now stock, see the DNOW Stock Forecast page.