Now (DNOW) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: N/A
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 19.6
• Beta (1Y): 0.98
• Revenue Growth: 4.74%
• EPS Growth: -65.65%
• Country: US
• Employees: 2,575
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.22
• Shares Outstanding: 105,568,170
• 10 Day Avg. Volume: 1,033,056
• 30 Day Avg. Volume: 1,134,921
• PEG Ratio: -0.19
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.34
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 2.46
• Enterprise Value/Ebitda: 2.20
• 1Y Price Target: $16.50
• Price Target Upside: 8.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

DNOW's solid financial foundation, driven by strong cash flow and low leverage, is offset by challenges in profitability and technical weaknesses. The earnings call highlights positive growth and strategic initiatives, yet ongoing uncertainties temper the outlook. The valuation remains moderate, appealing to growth-oriented investors.

Now Business Overview & Revenue Model

Company Description

NOW 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

NOW Inc. generates revenue through the sale of a broad range of energy and industrial products directly to companies in the oil and gas sector as well as other industries. The company's revenue model is primarily based on the distribution and sale of products required for drilling, production, and maintenance operations. Key revenue streams include the sale of pipe, valves, and fittings (PVF), maintenance, repair, and operating (MRO) supplies, and other related industrial products. Additionally, NOW Inc. partners with a variety of suppliers and manufacturers to offer a comprehensive inventory, ensuring timely delivery and availability of critical components to its clients. The company's extensive distribution network and value-added services, such as inventory management and technical support, also contribute significantly to its earnings.

Now Financial Statement Overview

Summary

DNOW demonstrates stable revenue and excellent cash flow management, with a significant increase in free cash flow. The balance sheet is strong with low leverage and high equity, providing a solid foundation for future growth. However, profitability has declined, reflected in reduced EBIT and EBITDA margins, presenting a challenge in operational efficiency.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.37B	2.32B	2.14B	1.63B	1.62B
	Gross Profit
535.00M	535.00M	506.00M	357.00M	292.00M
	EBIT
113.00M	140.00M	131.00M	9.00M	194.00M
	EBITDA
148.00M	166.00M	170.00M	40.00M	-77.00M
	Net Income Common Stockholders
81.00M	247.00M	128.00M	5.00M	-427.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.00M	299.00M	212.00M	313.00M	387.00M
	Total Assets
1.62B	1.53B	1.32B	1.10B	1.01B
	Total Debt
42.00M	41.00M	38.00M	17.00M	25.00M
	Net Debt
-214.00M	-258.00M	-174.00M	-296.00M	-362.00M
	Total Liabilities
493.00M	466.00M	476.00M	392.00M	309.00M
	Stockholders Equity
1.13B	1.06B	842.00M	712.00M	699.00M
Cash Flow		Free Cash Flow
289.00M	171.00M	-27.00M	25.00M	181.00M
	Operating Cash Flow
298.00M	188.00M	-18.00M	30.00M	189.00M
	Investing Cash Flow
-304.00M	-48.00M	-87.00M	-96.00M	22.00M
	Financing Cash Flow
-33.00M	-55.00M	-10.00M	-6.00M	-8.00M

Now Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 15.14
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 15.14 is below the 20-day moving average (MA) of 15.62, below the 50-day MA of 15.67, and above the 200-day MA of 14.18, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 32.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DNOW.

Now Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TDW	73 Outperform	$2.05B	12.40	16.24%	―	19.34%	31.76%
DNOW	71 Outperform	$1.54B	19.56	7.22%	―	4.74%	-65.65%
OII	70 Outperform	$2.00B	11.11	26.17%	―	10.04%	68.14%
LBRT	70 Neutral	$1.96B	8.01	13.18%	2.48%	-7.45%	-44.88%
WTTR	67 Neutral	$997.79M	24.09	4.51%	3.13%	-4.91%	-46.51%
AESI	60 Neutral	$1.55B	40.90	2.90%	7.00%	77.72%	-75.78%
Sector *	56 Neutral	$7.16B	3.85	-4.87%	5.83%	0.21%	-51.96%

Now Corporate Events

DNOW Inc. Announces $160 Million Share Buyback Plan

On January 24, 2025, DNOW Inc. announced a new share repurchase program authorized by its Board of Directors, allowing the company to buy back up to $160 million of its common stock. This initiative, which is double the size of its previous $80 million program, reflects DNOW’s strategic focus on acquisition growth and organic investment, while aiming to deliver significant returns to shareholders and enhance its market positioning. The program provides flexibility in capital return and underscores the company’s commitment to disciplined capital allocation, although the timing and occurrence of share repurchases remain dependent on market conditions and other factors.