Now (DNOW) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: N/A
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.98
• Revenue Growth: 2.78%
• EPS Growth: -63.09%
• Country: US
• Employees: 2,575
• Sector: Industrials
• Sector Strength: 72
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.27
• Shares Outstanding: 107,107,605
• 10 Day Avg. Volume: 1,256,304
• 30 Day Avg. Volume: 1,020,018
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.83
• Enterprise Value/Revenue: 0.58
• Enterprise Value/Gross Profit: 2.52
• Enterprise Value/Ebitda: 11.09
• 1Y Price Target: $17.50
• Price Target Upside: 12.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 79 Outperform
• Price Target: $18.50 ▲(19.35% Upside)

DNOW's overall stock score reflects its strong financial foundation and positive earnings call insights, highlighting strategic growth initiatives and robust cash flow management. Technical indicators suggest positive momentum, though caution is advised due to potential overbought conditions. Valuation is moderate, with no dividend yield. Legal challenges related to the merger with MRC Global are a potential risk but are not factored into the score.

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 through the sale of industrial products and services, primarily serving the energy and industrial markets. Key revenue streams include direct product sales, rental services, and maintenance contracts for equipment. The company capitalizes on its extensive distribution network to provide timely delivery and support to its customers. Significant partnerships with leading manufacturers and suppliers enhance its product offerings and competitive advantage. Additionally, the company leverages its expertise in supply chain management to offer value-added services, thereby increasing customer loyalty and driving repeat business.

Now Financial Statement Overview

Summary

DNOW exhibits stable revenue and excellent cash flow management, with a strong balance sheet characterized by low leverage and high equity. However, profitability has declined, with net profit and EBIT margins decreasing, indicating a need for improved operational efficiency.

Income Statement

The company's gross profit margin remained stable at approximately 22.5%. The net profit margin decreased to 3.4% from 10.6%, primarily due to a significant drop in net income. Revenue growth was modest at 2.2%. EBIT margin dropped to 4.8% from 6.0%, indicating reduced operational efficiency. The EBITDA margin also decreased to 4.8% from 7.1%. Overall, the income statement shows stable revenue but declining profitability.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.03, indicating minimal leverage risk. Return on Equity (ROE) decreased to 7.2% from 23.3%, reflecting lower profitability. The equity ratio improved to 69.6%, showcasing a strong equity base relative to assets. Overall, the balance sheet is solid with low leverage and high equity stability.

Cash Flow

The company demonstrated strong cash flow with a significant increase in free cash flow to $289 million, up 69% from the previous year. The operating cash flow to net income ratio increased to 3.68, indicating robust cash generation relative to earnings. Free cash flow to net income ratio also improved to 3.57. The cash flow statement reflects excellent cash management and growth in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.40B	2.37B	2.32B	2.14B	1.63B	1.62B
Gross Profit	551.00M	535.00M	535.00M	506.00M	357.00M	292.00M
EBITDA	125.00M	148.00M	166.00M	170.00M	40.00M	-77.00M
Net Income	83.00M	81.00M	247.00M	128.00M	5.00M	-427.00M
Balance Sheet
Total Assets	1.66B	1.62B	1.53B	1.32B	1.10B	1.01B
Cash, Cash Equivalents and Short-Term Investments	232.00M	256.00M	299.00M	212.00M	313.00M	387.00M
Total Debt	41.00M	42.00M	41.00M	38.00M	17.00M	25.00M
Total Liabilities	500.00M	493.00M	466.00M	476.00M	392.00M	309.00M
Stockholders Equity	1.16B	1.13B	1.06B	842.00M	712.00M	699.00M
Cash Flow
Free Cash Flow	210.00M	289.00M	171.00M	-27.00M	25.00M	181.00M
Operating Cash Flow	225.00M	298.00M	188.00M	-18.00M	30.00M	189.00M
Investing Cash Flow	-132.00M	-304.00M	-48.00M	-87.00M	-96.00M	22.00M
Financing Cash Flow	-58.00M	-33.00M	-55.00M	-10.00M	-6.00M	-8.00M

Now Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNOW, the sentiment is Positive. The current price of 15.5 is below the 20-day moving average (MA) of 15.52, above the 50-day MA of 15.31, and above the 200-day MA of 15.05, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 51.64 is Neutral, neither overbought nor oversold. The STOCH value of 49.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DNOW.

Now Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DNOW	79 Outperform	$1.66B	19.96	7.29%	―	2.78%	-63.09%
OII	79 Outperform	2.57B	12.94	23.84%	―	8.14%	62.72%
TDW	78 Outperform	2.85B	14.93	17.45%	―	7.76%	26.49%
LBRT	67 Neutral	2.06B	9.50	10.65%	2.51%	-9.32%	-48.26%
WTTR	61 Neutral	1.34B	33.31	4.13%	2.53%	-2.46%	-44.11%
AESI	59 Neutral	1.47B	89.30	1.10%	8.32%	49.18%	-87.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Now Corporate Events

DNOW Faces Legal Challenges in MRC Global Merger

On June 26, 2025, DNOW Inc. entered into a merger agreement with MRC Global, involving a two-step merger process, with the goal of MRC Global becoming a wholly-owned subsidiary of DNOW. The merger has faced legal challenges, with several shareholder complaints and demand letters alleging material omissions in the joint proxy statement/prospectus, potentially violating securities laws. Despite believing the allegations are without merit, DNOW is voluntarily providing supplemental disclosures to avoid delays and distractions in closing the merger.

DNOW Inc. Announces Merger with MRC Global

On June 26, 2025, DNOW Inc. announced a merger agreement with MRC Global Inc. in an all-stock transaction valued at approximately $1.5 billion, creating a leading energy and industrial solutions provider. The merger, expected to close in the fourth quarter of 2025, will expand the combined company’s scale and scope, offering complementary products and services across more than 350 locations in over 20 countries. The transaction, which has received unanimous board approval from both companies, is anticipated to generate $70 million in annual cost synergies within three years and be accretive to adjusted earnings per share in the first year. The merger aims to enhance growth opportunities, strengthen customer relationships, and improve cash flow generation, positioning the combined entity for long-term sustainable growth.