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NOV (NOV)
NYSE:NOV
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NOV
(NYSE:NOV)
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Rating:70Outperform
Price Target:
$14.00
â–²(5.82% Upside)
NOV's overall stock score reflects a strong financial recovery and attractive valuation, supported by solid cash flow and dividend yield. However, technical indicators suggest caution, and mixed earnings call sentiment highlights challenges such as market demand and cost pressures.
Positive Factors
Strong Cash Flow Generation
Strong cash flow generation indicates efficient operations and financial health, providing flexibility for investments and shareholder returns.
Record Revenues in Key Segments
Record revenues in strategic segments highlight NOV's competitive edge and ability to capitalize on market demand, supporting long-term growth.
Consistent Margin Growth
Consistent margin growth reflects operational efficiency and pricing power, enhancing profitability and competitive positioning.
Negative Factors
Decline in Aftermarket Sales
A decline in aftermarket sales can weaken recurring revenue streams and impact profitability, challenging long-term financial stability.
Impact of Tariffs and Inflation
Rising tariffs and inflation increase costs, potentially eroding margins and competitiveness, affecting long-term financial performance.
Challenges in Key Markets
Challenges in key markets like North America and Saudi Arabia can limit growth opportunities and pressure financial results.
NOV (NOV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.03B
Dividend Yield3.85%
Average Volume (3M)3.46M
Price to Earnings (P/E)10.9
Beta (1Y)0.74
Revenue Growth-1.21%
EPS Growth-54.44%
CountryUS
Employees34,010
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.34
Shares Outstanding371,364,750
10 Day Avg. Volume4,072,325
30 Day Avg. Volume3,462,187
Financial Highlights & Ratios
PEG Ratio-0.25
Price to Book (P/B)0.90
Price to Sales (P/S)0.65
P/FCF Ratio6.01
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue0.68
Enterprise Value/Gross Profit3.24
Enterprise Value/Ebitda5.74
Forecast
1Y Price Target
$15.56Price Target Upside17.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
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 technology products to oil and gas operators, as well as through the provision of services across the drilling and production lifecycle. Key revenue streams include the manufacturing and sale of drilling rigs, completion systems, and wellbore technologies, alongside service contracts for maintenance and support. The company also benefits from aftermarket sales, providing spare parts and services that are essential for operational efficiency. Additionally, NOV has strategic partnerships with major oilfield service companies and operators, enhancing its market reach and creating opportunities for joint ventures that contribute to its earnings.
NOV Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
The call highlighted strong cash flow generation, record revenues in specific segments, and consistent margin growth in the Energy Equipment segment. However, these positives were offset by declines in aftermarket sales, tariff and inflation challenges, and decreased demand in key markets. The sentiment is mixed, with achievements counterbalanced by significant challenges.Q2-2025 Updates
Positive Updates
Strong Free Cash Flow
NOV generated free cash flow of $108 million in the second quarter, converting 83% of EBITDA to free cash flow over the last 12 months, resulting in a total of over $1.2 billion in free cash flow during the last 5 quarters.
Record Revenues in Subsea Flexible Pipe and Process Systems
Second quarter revenue in the Subsea Flexible Pipe business reached an all-time high, and Process Systems also achieved record high revenues, showing significant year-over-year growth.
Consistent Margin Growth in Energy Equipment Segment
The Energy Equipment segment delivered its 12th straight quarter of year-over-year margin expansion, with EBITDA increasing $16 million to $158 million and a 130-basis point increase in EBITDA margins.
Strategic Share Repurchases and Dividends
NOV repurchased 10.9 million shares for $150 million and paid dividends totaling $135 million in the first half of 2025, returning $602 million to shareholders while increasing the cash balance by $612 million since March 2024.
Negative Updates
Decline in Aftermarket Sales
Aftermarket sales and services fell sharply, contributing to an unfavorable sales mix and pressuring margins, with customers reducing spending due to global trade uncertainty and lower oil prices.
Impact of Tariffs and Inflation
Tariff expenses rose to approximately $11 million in Q2, with expectations to increase to $25 million to $30 million by Q4 due to raised steel tariffs and inflation-driven cost pressures.
Challenges in North American and International Markets
The 6% sequential decline in global drilling activity, including a 9% drop in the U.S. oil-directed rig count and decreased activity in Saudi Arabia and Argentina, negatively impacted revenue and margins.
Lower Demand for Quick-Turn Consumables
Diminished demand for quick-turn consumable drilling and completion products in North America, Saudi Arabia, and Latin America contributed to compressed segment margins.
Company Guidance
In the second quarter of 2025, NOV reported revenues of $2.2 billion, a 4% increase from the first quarter of 2025 and a 1% decrease from the second quarter of 2024. The company's net income was $108 million, translating to $0.29 per fully diluted share, with adjusted EBITDA reaching $252 million or 11.5% of sales. The Energy Equipment segment saw a 5% sequential revenue growth due to strong capital equipment sales, despite a significant reduction in demand for aftermarket parts and services. Meanwhile, the Energy Products and Services segment achieved a 3% sequential revenue increase, outperforming a 6% decline in global drilling activity. However, the segment faced margin compression due to lower demand for consumable products in North America and other regions, as well as tariff-related and inflationary pressures. Looking ahead, NOV forecasts a year-over-year consolidated revenue decline of 1% to 3% for the third quarter, with adjusted EBITDA expected to be between $230 million and $250 million. The company remains optimistic about future opportunities in offshore activities and the growing demand for LNG and unconventional gas solutions, supported by its strong balance sheet and significant backlog.NOV Financial Statement Overview
Summary
NOV demonstrates a strong financial recovery with improved profitability margins and leverage. The balance sheet is solid, supporting operational stability, and cash flow has improved significantly. However, recent declines in revenue and net income pose potential concerns.Income Statement
The income statement shows a strong recovery and growth trajectory. The TTM data indicates a Gross Profit Margin of 21.1% and a Net Profit Margin of 5.4%. Revenue growth has been positive, with a 21.8% increase from 2021 to 2024, despite a slight decline in the most recent TTM period. EBIT and EBITDA margins have improved significantly over the years, reflecting operational efficiency. However, the recent decline in revenue and net income poses a potential concern.75
Positive
Balance Sheet
The balance sheet is robust with a Debt-to-Equity Ratio of 0.36, indicating a healthy leverage position. Return on Equity in the TTM period is 7.2%, showing profitability improvement. The Equity Ratio stands at 57.7%, highlighting financial stability. However, total assets and stockholders' equity have grown modestly, which may limit future expansion potential.70
Positive
Cash Flow
Cash flow analysis reveals a positive shift in free cash flow, with a substantial recovery from negative figures in 2022 to positive in the TTM period. The Operating Cash Flow to Net Income Ratio is strong at 2.71, indicating efficient cash generation. However, the Free Cash Flow to Net Income Ratio of 1.93 suggests room for improvement in converting earnings into cash.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.79B | 8.87B | 8.58B | 7.24B | 5.52B | 6.09B |
| Gross Profit | 1.85B | 2.01B | 1.83B | 1.33B | 774.00M | 434.00M |
| EBITDA | 1.05B | 1.26B | 1.00B | 617.00M | 153.00M | -2.34B |
| Net Income | 471.00M | 635.00M | 993.00M | 155.00M | -245.00M | -2.54B |
Balance Sheet | ||||||
| Total Assets | 11.36B | 11.36B | 11.29B | 10.13B | 9.55B | 9.93B |
| Cash, Cash Equivalents and Short-Term Investments | 1.08B | 1.23B | 816.00M | 1.07B | 1.59B | 1.69B |
| Total Debt | 2.37B | 2.39B | 2.38B | 2.37B | 2.39B | 2.56B |
| Total Liabilities | 4.80B | 4.93B | 5.05B | 5.00B | 4.49B | 4.65B |
| Stockholders Equity | 6.50B | 6.38B | 6.17B | 5.13B | 5.06B | 5.28B |
Cash Flow | ||||||
| Free Cash Flow | 909.00M | 953.00M | -140.00M | -393.00M | 90.00M | 700.00M |
| Operating Cash Flow | 1.28B | 1.30B | 143.00M | -179.00M | 291.00M | 926.00M |
| Investing Cash Flow | -407.00M | -471.00M | -293.00M | -238.00M | -196.00M | -144.00M |
| Financing Cash Flow | -626.00M | -406.00M | -103.00M | -96.00M | -189.00M | -259.00M |
NOV Technical Analysis
Positive
13.23
Price Trends
12.82
Positive
12.78
Positive
13.25
Negative
Market Momentum
0.14
Negative
53.15
Neutral
76.31
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 13.23 is above the 20-day moving average (MA) of 13.10, above the 50-day MA of 12.82, and below the 200-day MA of 13.25, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 53.15 is Neutral, neither overbought nor oversold. The STOCH value of 76.31 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $16.34B | 18.83 | 28.83% | 0.52% | 12.15% | 91.88% | |
78 Outperform | $47.68B | 15.82 | 17.22% | 1.86% | 2.13% | 54.69% | |
77 Outperform | $21.23B | 11.65 | 17.72% | 2.79% | -4.08% | -29.26% | |
75 Outperform | $4.76B | 10.74 | 31.85% | 1.51% | -5.35% | -4.15% | |
71 Outperform | $50.95B | 12.02 | 20.16% | 3.31% | 0.94% | -4.63% | |
70 Outperform | $5.03B | 10.89 | 7.31% | 3.85% | -1.21% | -54.44% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
NOV
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13.23
-2.72
-17.05%
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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.