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NOV (NOV)
NYSE:NOV
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NOV
(NYSE:NOV)
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Rating:62Neutral
Price Target:
$19.50
▼(-3.75% Downside)
Action:DowngradedDate:02/06/26
The score is driven primarily by financially stable fundamentals (strong balance sheet and positive cash generation) but tempered by weakening TTM revenue and margins and guidance for lower 2026 revenue/EBITDA with materially reduced cash conversion. Technicals are supportive with the stock above key moving averages, while valuation is a notable drag due to the high P/E despite a moderate dividend yield.
Positive Factors
Conservative Balance Sheet
Consistently low-to-moderate leverage gives NOV financial flexibility across oilfield cycles. Manageable debt levels support investment, opportunistic buybacks/M&A, and capacity to absorb cyclic downturns without forcing distress-driven asset sales, aiding durability over 2–6 months.
Strong Cash Generation
High free cash flow and exceptional EBITDA-to-cash conversion in recent years provide a structural cash buffer. Reliable cash enables reinvestment, dividends, and balance-sheet resilience even if earnings ebb, making funding of capex and shareholder returns sustainable in the medium term.
Growth in Strategic Segments
Material backlog growth and record performance in subsea flexible pipe and Process Systems reflect durable market share gains and technology leadership. These growth businesses diversify revenue beyond short-cycle aftermarket sales and support longer-term margin recovery.
Negative Factors
Sharply Weakened Revenues & Margins
A steep TTM revenue decline and compressed margins materially reduce the company’s earnings power. If sustained, this weakens reinvestment capacity and returns on equity, making recovery dependent on cyclical demand improvement rather than solely operational tweaks.
Guidance for Lower Cash Conversion
Management's projected drop in EBITDA-to-FCF conversion cuts the company’s effective cash-generation rate. Lower structural cash conversion constrains capital allocation flexibility, reduces leeway for buybacks/dividends, and raises sensitivity to working-capital swings.
Cost and Demand Headwinds
Persistent tariffs and input-cost inflation directly pressure margins across product lines. Combined with aftermarket weakness and occasional impairments, these structural cost and demand headwinds increase earnings volatility and reduce margin sustainability over the medium term.
NOV (NOV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.30B
Dividend Yield3.24%
Average Volume (3M)4.69M
Price to Earnings (P/E)52.4
Beta (1Y)0.88
Revenue Growth-1.43%
EPS Growth-63.13%
CountryUS
Employees34,010
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)-0.21
Shares Outstanding360,404,540
10 Day Avg. Volume4,130,438
30 Day Avg. Volume4,685,115
Financial Highlights & Ratios
PEG Ratio-0.53
Price to Book (P/B)0.93
Price to Sales (P/S)0.66
P/FCF Ratio6.73
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue0.94
Enterprise Value/Gross Profit4.63
Enterprise Value/Ebitda10.00
Forecast
1Y Price Target
$19.75Price Target Upside-2.52% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)1
Revenue Forecast (FY)$8.62B
NOV Business Overview & Revenue Model
Company DescriptionNOV Inc. designs, constructs, manufactures, and sells systems, components, and products for oil and gas drilling and production, and industrial and renewable energy sectors worldwide. The company operates through three segments: Wellbore Technologies, Completion & Production Solutions, and Rig Technologies. It also provides solids control and waste management equipment and services; portable power generation products; drill and wired pipes; drilling optimization and automation services; tubular inspection, repair, and coating services; instrumentation; measuring and monitoring services; downhole and fishing tools; steerable technologies; and drill bits. The company offers equipment and technologies for hydraulic fracture stimulation, including downhole multistage fracturing tools, pressure pumping trucks, blenders, sanders, hydration and injection units, flowline, and manifolds; coiled tubing units, and wireline units and tools; connections and liner hangers; onshore production consists of composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and offshore production, such as floating production systems and subsea production technologies, as well as manufactures industrial pumps and mixers. It also provides substructures, derricks, and masts; cranes; jacking systems; pipe lifting, racking, rotating, and assembly systems; mud pumps; pressure control equipment; drives and generators; rig instrumentation and control systems; mooring, anchor, and deck handling machinery; equipment components for offshore wind construction vessels; and pipelay and construction systems. NOV Inc. offers spare parts, repair, and rentals as well as comprehensive remote equipment monitoring, technical support, field service, and customer training. The company was formerly known as National Oilwell Varco, Inc. and changed its name to NOV Inc. in January 2021. NOV Inc. was founded in 1862 and is based in Houston, Texas.
How the Company Makes MoneyNOV generates revenue primarily through the sale of its equipment and services to the oil and gas sector. Key revenue streams include the manufacturing and leasing of drilling rigs, the provision of wellbore technologies such as drilling fluids and bits, and the sale of completion and production equipment. The company also engages in aftermarket services, providing maintenance and support for its products, which contributes to a steady revenue flow. Furthermore, NOV has formed strategic partnerships with various oil and gas companies, which helps to secure long-term contracts and projects, enhancing its revenue stability. The cyclical nature of the oil and gas industry can impact earnings, but NOV's diversified product offerings and global presence help mitigate risks associated with market fluctuations.
NOV Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a mostly constructive picture: the company demonstrated strong cash generation, improved working capital and segment-level wins (notably subsea flexible pipe, Process Systems and Energy Equipment), a healthy backlog and a very conservative balance sheet. These positives are balanced against near-term challenges including a Q4 net loss, an $86M impairment, tariff and inflation pressures, weaker aftermarket and short-cycle demand, and guidance for slightly lower revenue and materially lower cash conversion in 2026. Management emphasized operational efficiency, a $100M cost-out program, disciplined M&A and optimism for an offshore-led recovery in late 2026–2027. Overall, the strengths and demonstrated resilience outweigh the short-term headwinds, but the company signals a cautious near-term outlook.Q4-2025 Updates
Positive Updates
Quarterly and Annual Revenue Resilience
Q4 2025 revenue of $2.28B (+5% sequential, -1% year-over-year); full year 2025 revenue of $8.74B (-1% year-over-year).
Strong EBITDA and Cash Generation
Q4 adjusted EBITDA of $267M (11.7% of sales) and adjusted operating profit of $177M (7.8% of sales). Full year adjusted EBITDA ~ $1.03B, exceeding $1B for the third consecutive year.
Exceptional Free Cash Flow and Conversion
Free cash flow of $472M in Q4 and $876M for full year 2025; $1.8B free cash flow over the last 2 years. Converted over 85% of EBITDA to cash for the second consecutive year.
Improved Working Capital and Cash Conversion Cycle
Cash conversion cycle improved to 119 days from 143 days in 2023; working capital to revenue run rate reduced to <22% from 28.8% in 2023, freeing approximately $630M of cash.
Backlog, Orders and Book-to-Bill
Ended 2025 with backlog of $4.34B. 2025 book-to-bill ~91% with capital equipment orders of $532M in Q4 and $2.34B for full year. Company expects full-year 2026 book-to-bill near 100%.
Energy Equipment Segment Strength
Energy Equipment Q4 revenue $1.33B (+7% sequential, +4% YoY) and adjusted EBITDA $180M (13.5% margin). Capital equipment drove 63% of segment revenue (up 8% sequential, +15% YoY). Four consecutive years of revenue and margin growth in the segment.
Outstanding Performance in Key Growth Businesses
Subsea flexible pipe: highest quarterly revenue and EBITDA on record for the second consecutive quarter; backlog doubled since end of 2023 and annual shipments up ~50%. Process Systems: Q4 revenue +40% YoY, full year revenue >30% growth and bookings doubled vs 2024.
Balance Sheet and Capital Return
Net debt-to-EBITDA 0.2x, repurchased 5.7M shares for $85M in the quarter, paid $27M in dividends; total capital returned to shareholders $505M YTD and $842M over 2 years while increasing cash balance by $736M.
Operational Efficiency Programs
Ongoing $100M cost-out program and process improvements expected to deliver >$100M annualized savings by end of 2026; inventory turns improved from 3.1 (2023) to ~3.9 (2025).
Positive Market Signals for Offshore Recovery
Increasing offshore tendering (59 floater contracts Sep 2025–Jan 2026 vs 33 prior year), potential for up to 10 FPSO FIDs in 2026 and expectations of improved offshore activity driving spare parts, upgrades and capital equipment demand.
Negative Updates
Q4 Net Loss and Asset Impairments
Reported Q4 net loss of $78M ($0.21 per diluted share). Recorded $86M in other items, primarily impairment of goodwill and long-lived assets.
Profitability Headwinds from Taxes and Mix
Q4 net loss impacted by higher effective tax rate from valuation allowances on deferred tax assets and a higher mix of foreign earnings; guidance expects effective tax rate ~34%–36% in 2026.
Tariffs and Inflationary Pressure
Tariff expense of $25M in Q4 (up ~$8M sequential); tariff expense >$50M in 2025. Ongoing inflationary pressures (notably tungsten carbide price spikes and electronics/labor) are headwinds and expected to modestly increase tariff expense in Q1 2026.
2026 Cash Conversion and Revenue Guidance
Company expects slightly lower revenue in 2026, EBITDA in line to slightly lower than 2025, and EBITDA-to-free-cash-flow conversion to fall to 40%–50% for 2026 (vs >85% in prior two years).
Aftermarket and Short-Cycle End-Market Weakness
Aftermarket parts and services weakness from offshore drilling contractor customers: Energy Equipment aftermarket down 12% YoY (though +6% sequential). Drilling aftermarket down mid-teens YoY; Energy Products & Services segment revenue down 7% YoY and adjusted EBITDA decreased to $140M (14.2% margin).
Declines in Some Product Lines
Drilling capital equipment revenue declined low-teens YoY (despite +~10% sequential). Intervention and stimulation capital equipment revenue down ~10% YoY. Product sales declined mid-teens YoY.
Near-Term Activity Uncertainty
Management expects global industry spend and drilling activity to decline slightly in 2026 with U.S. activity down mid-single digits; visibility remains limited and start to recovery expected in late 2026/2027.
Higher Capital Intensity for Reactivations and Some Offshore Opportunities
Opportunities to reactivate stacked assets and large FPSO/FLNG work may require disproportionate capital spending for customers; timing and award chunkiness create lumpiness in future orders.
Company Guidance
The company guided that 2026 will likely see slightly lower revenue versus 2025 with results weighted to the back half of the year and full‑year EBITDA “in line to slightly lower” than 2025’s adjusted EBITDA of about $1.03 billion; they expect adjusted EBITDA‑to‑free‑cash‑flow conversion to decline to roughly 40%–50% in 2026 (vs. >85% over the last two years), capital expenditures of $315–$345 million, and a higher effective tax rate of ~34%–36%. Near‑term specifics include Q1 segment guidance: Energy Equipment revenue up 3%–5% YoY with EBITDA $145–$165 million, and Energy Products & Services revenue down 6%–8% YoY with EBITDA $105–$125 million. Other balance‑sheet and operating metrics cited were backlog $4.34 billion, 2025 revenue $8.74 billion (Q4 $2.28 billion) and Q4 adjusted EBITDA $267 million (11.7% margin), book‑to‑bill ~91% for 2025 and expected near 1.0x for 2026, tariff headwinds (~$25 million Q4; >$50 million for 2025) that may tick up slightly in Q1, net debt/EBITDA ~0.2x, cash conversion cycle 119 days (working capital <22%), and expected FPSO FIDs of up to ~10 in 2026 (avg. ~8/yr through 2030).NOV Financial Statement Overview
Summary
Balance sheet and liquidity are solid (manageable leverage and conservative net debt/EBITDA noted), and operating/free cash flow are positive in the TTM. Offsetting this, the income statement is weakening with a sharp TTM revenue decline and margin compression versus 2024, and cash flow has shown historical volatility, reflecting cycle sensitivity.Income Statement
Profitability has improved materially versus the 2020–2022 loss/low-profit period, with positive operating profit and EBITDA in the latest periods. However, performance has weakened recently: TTM (Trailing-Twelve-Months) revenue is down sharply (-30.8% growth) and margins compressed versus 2024 (gross margin ~22.0% vs ~24.0%; net margin ~4.4% vs ~7.2%), with net income down significantly from 2023–2024 levels. Overall, the earnings profile looks cyclical—improving off the trough but currently in a downshift.56
Neutral
Balance Sheet
Leverage appears manageable and stable, with debt-to-equity consistently in the ~0.36–0.49 range and equity remaining sizable relative to the asset base. Returns on equity have recovered strongly from negative levels in 2020–2021 to positive mid-to-high single digits recently (TTM ~5.9%), though still below the stronger 2023–2024 returns. Main risk is not balance-sheet strain but that profitability can swing meaningfully with the cycle, which can pressure returns even if leverage stays controlled.72
Positive
Cash Flow
Cash generation is a relative strength recently: TTM (Trailing-Twelve-Months) operating cash flow (~$1.25B) and free cash flow (~$0.88B) are solid and remain positive. That said, free cash flow growth is down in TTM (about -11%), and the history shows volatility (negative operating/free cash flow in 2022 and negative free cash flow in 2023). Cash conversion relative to earnings is decent in 2024–TTM, but the variability across years suggests working-capital and cycle sensitivity.66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.74B | 8.87B | 8.58B | 7.24B | 5.52B |
| Gross Profit | 1.77B | 2.01B | 1.83B | 1.33B | 774.00M |
| EBITDA | 818.00M | 1.26B | 1.00B | 617.00M | 153.00M |
| Net Income | 145.00M | 635.00M | 993.00M | 155.00M | -250.00M |
Balance Sheet | |||||
| Total Assets | 11.29B | 11.36B | 11.29B | 10.13B | 9.55B |
| Cash, Cash Equivalents and Short-Term Investments | 1.55B | 1.23B | 816.00M | 1.07B | 1.59B |
| Total Debt | 2.34B | 2.39B | 2.38B | 2.37B | 2.39B |
| Total Liabilities | 4.97B | 4.93B | 5.05B | 5.00B | 4.49B |
| Stockholders Equity | 6.27B | 6.38B | 6.17B | 5.10B | 5.00B |
Cash Flow | |||||
| Free Cash Flow | 864.00M | 953.00M | -140.00M | -393.00M | 90.00M |
| Operating Cash Flow | 1.24B | 1.30B | 143.00M | -179.00M | 291.00M |
| Investing Cash Flow | -362.00M | -471.00M | -293.00M | -238.00M | -196.00M |
| Financing Cash Flow | -584.00M | -406.00M | -103.00M | -96.00M | -189.00M |
NOV Technical Analysis
Positive
20.26
Price Trends
17.99
Positive
16.33
Positive
14.53
Positive
Market Momentum
0.67
Negative
62.54
Neutral
70.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOV, the sentiment is Positive. The current price of 20.26 is above the 20-day moving average (MA) of 19.42, above the 50-day MA of 17.99, and above the 200-day MA of 14.53, indicating a bullish trend. The MACD of 0.67 indicates Negative momentum. The RSI at 62.54 is Neutral, neither overbought nor oversold. The STOCH value of 70.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOV.
NOV Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $26.53B | 28.87 | 29.85% | 0.44% | 11.73% | 45.70% | |
73 Outperform | $76.77B | 21.87 | 14.28% | 2.98% | -2.13% | -16.76% | |
69 Neutral | $64.49B | 25.07 | 14.49% | 2.04% | 1.51% | 30.09% | |
69 Neutral | $7.56B | 17.76 | 28.89% | 1.25% | -10.19% | -23.74% | |
66 Neutral | $30.15B | 23.93 | 12.24% | 2.41% | -4.06% | -47.41% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $7.30B | 52.39 | 2.29% | 3.24% | -1.43% | -63.13% |
* Energy Sector Average
NOV
NOV
20.26
6.59
48.24%
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NOV Corporate Events
Business Operations and StrategyExecutive/Board Changes
NOV Announces Leadership Transition with New CEO
Positive
Nov 20, 2025
On NOVember 19, 2025, NOV Inc. announced the retirement of its Chairman and CEO, Clay C. Williams, effective February 28, 2026, with Jose A. Bayardo set to succeed him as Chairman, President, and CEO starting January 1, 2026. This leadership transition is part of NOV’s long-term succession planning, with Bayardo’s extensive experience in upstream oilfield operations expected to guide the company into its next phase of growth, ensuring operational efficiency and shareholder value.
The most recent analyst rating on (NOV) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on NOV stock, see the NOV Stock Forecast page.
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.