Now (11N) AI Stock Analysis

Company Guidance

DNOW guided to sequential Q3 revenue growth in the low- to mid-single-digit range with adjusted EBITDA margin targeted at 5.0–5.5% (above prior guide), and raised its full‑year 2026 revenue outlook to roughly $5.0–5.1 billion with EBITDA as a percent of revenue to approach ~4.5%. Management also forecast Q3 depreciation & amortization of about $24 million, expects interest expense to decline slightly from Q2's $9 million, a full‑year GAAP effective tax rate in the mid‑ to high‑single digits, and continued modest CapEx (Q2 CapEx was $9 million). The guide is supported by Q2 results of $1.3 billion revenue, $60 million adjusted EBITDA (4.6%), $133 million cash from operations (Q2 record), net debt $360 million (total debt $474 million) and 1.7x trailing leverage, liquidity of $472 million ($114M cash / $358M revolver), Q2 AR $889M (DSO 62, down 7 days), inventory $1.1B (down $131M, turns 4.0x), AP $711M (61 days), working capital ex‑cash 19.4%, expected additional inventory and AR reductions of ~$25–50M each, and accelerated synergy realization (~$30M first‑year exit rate vs. prior $17M, on a path to $70M annualized by year 3).