Now (DNOW) AI Stock Analysis

• Market Cap: $2.65B
• Dividend Yield: N/A
• Average Volume (3M): 2.80M
• Price to Earnings (P/E): 16.3
• Beta (1Y): 1.12
• 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): 0.26
• Shares Outstanding: 185,661,500
• 10 Day Avg. Volume: 1,696,856
• 30 Day Avg. Volume: 2,803,588
• PEG Ratio: -0.26
• Price to Book (P/B): 1.23
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 4.79
• Enterprise Value/Market Cap: 0.52
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 2.47
• Enterprise Value/Ebitda: 8.35
• 1Y Price Target: $17.00
• Price Target Upside: 18.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.91
• Revenue Forecast (FY): $2.58B

• Rating: 76 Outperform
• Price Target: $15.50 ▲(8.39% Upside)

DNOW's overall score is driven by its strong financial foundation and promising strategic initiatives, such as the MRC Global merger. However, declining profitability and bearish technical indicators present challenges. The company's valuation is moderate, with no dividend yield to attract income investors.

Positive Factors

Strong Cash Flow Management

Robust cash flow management enhances financial flexibility, allowing DNOW to invest in growth opportunities and weather economic fluctuations.

Strategic Merger with MRC Global

The merger expands DNOW's market presence and operational efficiency, positioning it for long-term growth and competitive advantage in the energy sector.

Strong Balance Sheet

A strong balance sheet with low leverage provides stability and the capacity to pursue strategic initiatives without financial strain.

Negative Factors

Declining Profitability

Decreasing profitability can hinder DNOW's ability to reinvest in its business and may affect long-term growth and shareholder returns.

Flat U.S. Revenue

Stagnant U.S. revenue growth limits DNOW's potential to capitalize on its largest market, impacting overall revenue expansion prospects.

Hypercompetitive Market

Intense competition pressures DNOW's pricing power and margins, challenging its ability to maintain profitability and market share.

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

DNOW's financial performance is characterized by stable revenue and excellent cash flow management, with a strong balance sheet featuring low leverage and high equity. However, profitability has declined, as evidenced by reduced net and EBIT margins.

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	2.43B	2.37B	2.32B	2.14B	1.63B	1.62B
Gross Profit	561.00M	535.00M	535.00M	506.00M	357.00M	292.00M
EBITDA	166.00M	153.00M	166.00M	160.00M	39.00M	-71.00M
Net Income	95.00M	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	266.00M	256.00M	299.00M	212.00M	313.00M	387.00M
Total Debt	38.00M	42.00M	41.00M	38.00M	32.00M	47.00M
Total Liabilities	475.00M	493.00M	466.00M	476.00M	392.00M	309.00M
Stockholders Equity	1.18B	1.12B	1.06B	842.00M	711.00M	699.00M
Cash Flow
Free Cash Flow	177.00M	289.00M	171.00M	-9.00M	25.00M	181.00M
Operating Cash Flow	194.00M	298.00M	188.00M	0.00	30.00M	189.00M
Investing Cash Flow	-133.00M	-304.00M	-48.00M	-87.00M	-96.00M	22.00M
Financing Cash Flow	-53.00M	-33.00M	-55.00M	-10.00M	-6.00M	-8.00M

Now Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.30
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 14.3 is above the 20-day moving average (MA) of 13.59, above the 50-day MA of 14.08, and below the 200-day MA of 14.97, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 57.80 is Neutral, neither overbought nor oversold. The STOCH value of 66.95 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
XPRO	77 Outperform	$1.66B	24.77	4.60%	―	-1.24%	337.41%
DNOW	76 Outperform	$2.65B	16.35	8.10%	―	3.18%	-53.71%
LBRT	69 Neutral	$2.88B	15.80	9.21%	1.71%	-12.05%	-46.45%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FLOC	57 Neutral	$1.70B	36.74	―	1.29%	―	―
AESI	50 Neutral	$1.30B	―	-1.20%	9.81%	20.68%	-112.42%
MRC	45 Neutral	―	―	0.28%	―	-10.96%	-169.10%

Now Corporate Events

DNOW Completes Acquisition of MRC Global

On November 6, 2025, DNOW Inc. completed its acquisition of MRC Global Inc., creating a premier solutions provider in the energy and industrial markets. The merger, which converted MRC Global’s common stock into DNOW’s, is expected to enhance DNOW’s earnings durability, cash flow, and financial position. This strategic move expands DNOW’s geographic footprint and distribution presence across the U.S., Canada, and international markets, serving a broader customer base. The acquisition is anticipated to generate significant cost synergies and operational efficiencies, strengthening DNOW’s market position and offering compelling growth opportunities.

DNOW Inc. Completes Merger with MRC Global

On June 26, 2025, DNOW Inc. entered into a Merger Agreement with MRC Global Inc., involving a series of mergers that will result in MRC Global becoming a wholly-owned subsidiary of DNOW. The completion of these transactions is contingent upon regulatory approvals, including the expiration of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, which expired on October 6, 2025, and other customary closing conditions.