Now Inc (DNOW)
NYSE:DNOW
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Now
(NYSE:DNOW)
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Rating:54Neutral
Price Target:
$12.50
▲(12.41% Upside)
Action:DowngradedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Now (DNOW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.28B
Dividend YieldN/A
Average Volume (3M)3.34M
Price to Earnings (P/E)―
Beta (1Y)1.03
Revenue Growth3.18%
EPS Growth-53.71%
CountryUS
Employees2,575
SectorIndustrials
Sector Strength72
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding186,346,150
10 Day Avg. Volume2,420,154
30 Day Avg. Volume3,335,490
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)0.70
Price to Sales (P/S)0.55
P/FCF Ratio11.67
Enterprise Value/Market Cap0.85
Enterprise Value/Revenue0.69
Enterprise Value/Gross Profit4.08
Enterprise Value/Ebitda-64.97
Forecast
1Y Price Target
$16.00Price Target Upside43.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.72
Revenue Forecast (FY)$4.69B
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 ...
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, valv...
Now Key Performance Indicators (KPIs)
Now Earnings Call Summary
Earnings Call Date:Feb 20, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
The call presents a mixed but cautiously constructive outlook. Positive takeaways include the completed merger that materially expands scale and addressable markets, full-year revenue growth (+19% YoY) and strong adjusted EBITDA ($209M), record legacy DNOW profitability (EBITDA $199M, 8.2% margin), healthy liquidity and positive operating cash flow. Early cost-synergy realization ($23M year-one) and traction on revenue synergies (cross-selling, data center entry) are encouraging. Offsetting these positives are material and ongoing operational disruptions from an Oracle ERP implementation at legacy MRC Global U.S. that have driven sequential revenue declines, significant Q4 merger-related charges (net loss of $147M) and elevated working capital/inventory levels, which led management to delay 2026 guidance. Management has mobilized remediation teams, is fast-tracking system stabilizations and is executing tactical mitigations (routing projects through DNOW systems, help desk support, temporary staffing), but uncertainty remains until ERP issues are resolved. Overall, the fundamentals (cash, scale, margin track record, synergy upside) are supportive, yet near-term execution risk from ERP and integration-related costs tempers confidence.Positive Updates
Merger with MRC Global Completed and Strategic Scale Expansion
Merger closed on November 6, 2025, materially increasing scale, geographic footprint and sector diversification (upstream, midstream, gas utilities, downstream, industrial). Management expects long-term value creation from combined purchasing power, expanded addressable market and operational efficiencies; cost synergy target remains $70,000,000 over three years with accelerated year-one savings now expected to reach $23,000,000 (vs prior $17,000,000 plan for 2026).
Negative Updates
Significant ERP Implementation Issues at MRC Global U.S.
Oracle ERP implementation (go-live 08/06/2025) in legacy MRC Global U.S. has produced material operational disruptions leading to revenue and profitability declines in Q3 and Q4. Issues include system slowness, order processing delays, impaired customer service, higher safety stock and increased resource requirements. U.S. MRC Global represents roughly 40% of DNOW's business, and management delayed issuing forward guidance until stabilization.
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Q4-2025 Updates
Positive
Negative
Merger with MRC Global Completed and Strategic Scale Expansion
Merger closed on November 6, 2025, materially increasing scale, geographic footprint and sector diversification (upstream, midstream, gas utilities, downstream, industrial). Management expects long-term value creation from combined purchasing power, expanded addressable market and operational efficiencies; cost synergy target remains $70,000,000 over three years with accelerated year-one savings now expected to reach $23,000,000 (vs prior $17,000,000 plan for 2026).
Read all positive updates
Company Guidance
DNOW said it is delaying sequential and full‑year 2026 guidance due to persistent ERP issues in legacy MRC Global U.S. operations and the early stage of integration, and will reinstate guidance once MRC U.S. operations achieve operational stability and predictability; in the meantime management provided several quantifiable planning metrics: a three‑year cost‑synergy target of $70.0M with an updated expectation of $23.0M in cost savings by the end of year one (versus the prior $17.0M for 2026), a projected 2026 effective tax rate of roughly 26%–27%, modeled working capital (ex‑cash) to approach ~25% of revenue (versus 29.7% at year‑end 4Q and legacy ~15.0%–15.8%), target deleveraging toward net cash from a year‑end net debt of $247.0M (1.2x leverage) and total debt of $411.0M, ample liquidity of $588.0M (cash $164.0M + $424.0M available on the credit facility), expected 2026 cash generation in the ~$100M–$200M range, and continued capital discipline (FY‑2025 cash from operations $155.0M, capex $25.0M); they also highlighted FY‑2025 and Q4 results that shape near‑term expectations—FY‑2025 revenue $2.8B, Q4 revenue $959.0M, adjusted EBITDA FY‑2025 $209.0M (7.4% of revenue) and Q4 $61.0M (6.4%), legacy DNOW record EBITDA $199.0M (8.2% of revenue), adjusted Q4 net income $23.0M ($0.15/share) versus a GAAP Q4 net loss of $147.0M (including ~$50.0M transaction costs, $12.0M CTA charge and $135.0M inventory step‑up with ~$41.0M remaining), inventory $1,192.0M (4Q annualized turns ~3x), A/R $174.0M (DSO 83 days; legacy DNOW DSO 63 days), A/P $603.0M, and a reactivated $160.0M share repurchase program (prior $100.0M program had $37.0M repurchased, including $10.0M in 4Q).Now Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
60
Neutral
Cash Flow
66
Positive
| 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
Neutral
11.12
Price Trends
13.27
Negative
13.48
Negative
14.21
Negative
Market Momentum
-0.17
Negative
51.09
Neutral
79.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNOW, the sentiment is Neutral. The current price of 11.12 is below the 20-day moving average (MA) of 11.80, below the 50-day MA of 13.27, and below the 200-day MA of 14.21, indicating a neutral trend. The MACD of -0.17 indicates Negative momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 79.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DNOW.
Now Risk Analysis
Now disclosed 10 risk factors in its most recent earnings report. Now reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Now Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.90B | 29.70 | 3.41% | ― | -1.24% | 337.41% | |
72 Outperform | $1.98B | 12.21 | 43.60% | 1.32% | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $4.41B | 20.22 | 7.25% | 1.78% | -12.05% | -46.45% | |
60 Neutral | $1.44B | -22.93 | -4.02% | 10.12% | 20.68% | -112.42% | |
54 Neutral | $2.28B | ― | -5.25% | ― | 3.18% | -53.71% |
* Industrials Sector Average
DNOW
Now
12.25
-3.12
-20.30%
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11.51
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FLOC
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21.75
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Now Corporate Events
Executive/Board Changes
DNOW Announces Planned Board Transition as Director Departs
Neutral
Feb 27, 2026
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...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.