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DNOW INC (DNOW) Stock Fundamental Analysis

NYSE:DNOW - New York Stock Exchange, Inc. - US67011P1003 - Common Stock - Currency: USD

15.14  -0.89 (-5.55%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to DNOW. DNOW was compared to 50 industry peers in the Trading Companies & Distributors industry. DNOW is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. DNOW is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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4

1. Profitability

1.1 Basic Checks

In the past year DNOW was profitable.
DNOW had a positive operating cash flow in the past year.
Of the past 5 years DNOW 4 years were profitable.
DNOW had a positive operating cash flow in 4 of the past 5 years.
DNOW Yearly Net Income VS EBIT VS OCF VS FCFDNOW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M -200M -400M

1.2 Ratios

The Return On Assets of DNOW (5.00%) is comparable to the rest of the industry.
DNOW's Return On Equity of 7.21% is on the low side compared to the rest of the industry. DNOW is outperformed by 60.00% of its industry peers.
The Return On Invested Capital of DNOW (7.81%) is comparable to the rest of the industry.
DNOW had an Average Return On Invested Capital over the past 3 years of 9.28%. This is in line with the industry average of 9.15%.
Industry RankSector Rank
ROA 5%
ROE 7.21%
ROIC 7.81%
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.28%
ROIC(5y)N/A
DNOW Yearly ROA, ROE, ROICDNOW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 -40 -60

1.3 Margins

DNOW has a Profit Margin (3.41%) which is comparable to the rest of the industry.
DNOW's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 5.39%, DNOW is not doing good in the industry: 66.00% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of DNOW has grown nicely.
With a Gross Margin value of 22.76%, DNOW is not doing good in the industry: 74.00% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of DNOW has grown nicely.
Industry RankSector Rank
OM 5.39%
PM (TTM) 3.41%
GM 22.76%
OM growth 3Y72.3%
OM growth 5Y26.88%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.01%
GM growth 5Y2.57%
DNOW Yearly Profit, Operating, Gross MarginsDNOW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 -10 20 -20

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7

2. Health

2.1 Basic Checks

DNOW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, DNOW has less shares outstanding
Compared to 5 years ago, DNOW has less shares outstanding
The debt/assets ratio for DNOW is higher compared to a year ago.
DNOW Yearly Shares OutstandingDNOW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M 100M
DNOW Yearly Total Debt VS Total AssetsDNOW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

2.2 Solvency

DNOW has an Altman-Z score of 3.62. This indicates that DNOW is financially healthy and has little risk of bankruptcy at the moment.
DNOW has a Altman-Z score of 3.62. This is in the better half of the industry: DNOW outperforms 68.00% of its industry peers.
DNOW has a debt to FCF ratio of 0.09. This is a very positive value and a sign of high solvency as it would only need 0.09 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.09, DNOW belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
DNOW has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.01, DNOW belongs to the best of the industry, outperforming 82.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF 0.09
Altman-Z 3.62
ROIC/WACC0.81
WACC9.66%
DNOW Yearly LT Debt VS Equity VS FCFDNOW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 500M 1B

2.3 Liquidity

DNOW has a Current Ratio of 2.33. This indicates that DNOW is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of DNOW (2.33) is comparable to the rest of the industry.
A Quick Ratio of 1.53 indicates that DNOW should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.53, DNOW is doing good in the industry, outperforming 64.00% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.33
Quick Ratio 1.53
DNOW Yearly Current Assets VS Current LiabilitesDNOW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B

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3

3. Growth

3.1 Past

DNOW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.15%.
DNOW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.83% yearly.
Looking at the last year, DNOW shows a small growth in Revenue. The Revenue has grown by 2.24% in the last year.
The Revenue has been decreasing by -4.27% on average over the past years.
EPS 1Y (TTM)-5.15%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%13.64%
Revenue 1Y (TTM)2.24%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%2.88%

3.2 Future

The Earnings Per Share is expected to grow by 7.62% on average over the next years.
DNOW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.35% yearly.
EPS Next Y0.52%
EPS Next 2Y5.65%
EPS Next 3Y7.48%
EPS Next 5Y7.62%
Revenue Next Year5.33%
Revenue Next 2Y4.84%
Revenue Next 3Y4.46%
Revenue Next 5Y4.35%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
DNOW Yearly Revenue VS EstimatesDNOW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1B 2B 3B 4B
DNOW Yearly EPS VS EstimatesDNOW Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 0.5 -0.5 1 -1

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4

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 16.46, DNOW is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of DNOW is on the same level as its industry peers.
DNOW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.29.
With a Price/Forward Earnings ratio of 16.37, DNOW is valued correctly.
DNOW's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of DNOW to the average of the S&P500 Index (20.42), we can say DNOW is valued inline with the index average.
Industry RankSector Rank
PE 16.46
Fwd PE 16.37
DNOW Price Earnings VS Forward Price EarningsDNOW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DNOW indicates a somewhat cheap valuation: DNOW is cheaper than 66.00% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, DNOW is valued cheaply inside the industry as 96.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 5.7
EV/EBITDA 9.34
DNOW Per share dataDNOW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15 20

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)31.52
PEG (5Y)0.53
EPS Next 2Y5.65%
EPS Next 3Y7.48%

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0

5. Dividend

5.1 Amount

No dividends for DNOW!.
Industry RankSector Rank
Dividend Yield N/A

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DNOW INC

NYSE:DNOW (5/7/2025, 1:16:03 PM)

15.14

-0.89 (-5.55%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-13 2025-02-13/bmo
Earnings (Next)05-07 2025-05-07/bmo
Inst Owners101.96%
Inst Owner Change0.13%
Ins Owners1.98%
Ins Owner Change6.23%
Market Cap1.65B
Analysts82.5
Price Target19.38 (28.01%)
Short Float %2.12%
Short Ratio1.87
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)39.8%
Min EPS beat(2)-1.96%
Max EPS beat(2)81.55%
EPS beat(4)2
Avg EPS beat(4)17.81%
Min EPS beat(4)-10.49%
Max EPS beat(4)81.55%
EPS beat(8)4
Avg EPS beat(8)12.83%
EPS beat(12)8
Avg EPS beat(12)19.95%
EPS beat(16)12
Avg EPS beat(16)53.26%
Revenue beat(2)1
Avg Revenue beat(2)-1.16%
Min Revenue beat(2)-3.38%
Max Revenue beat(2)1.07%
Revenue beat(4)1
Avg Revenue beat(4)-1.81%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)1.07%
Revenue beat(8)3
Avg Revenue beat(8)-1.47%
Revenue beat(12)7
Avg Revenue beat(12)-0.09%
Revenue beat(16)10
Avg Revenue beat(16)0.48%
PT rev (1m)3.64%
PT rev (3m)21.28%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.31%
EPS NY rev (1m)0%
EPS NY rev (3m)15.87%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.57%
Revenue NY rev (1m)0%
Revenue NY rev (3m)5.28%
Valuation
Industry RankSector Rank
PE 16.46
Fwd PE 16.37
P/S 0.69
P/FCF 5.7
P/OCF 5.53
P/B 1.47
P/tB 1.99
EV/EBITDA 9.34
EPS(TTM)0.92
EY6.08%
EPS(NY)0.92
Fwd EY6.11%
FCF(TTM)2.66
FCFY17.54%
OCF(TTM)2.74
OCFY18.09%
SpS21.81
BVpS10.33
TBVpS7.62
PEG (NY)31.52
PEG (5Y)0.53
Profitability
Industry RankSector Rank
ROA 5%
ROE 7.21%
ROCE 10.86%
ROIC 7.81%
ROICexc 9.98%
ROICexgc 14.66%
OM 5.39%
PM (TTM) 3.41%
GM 22.76%
FCFM 12.18%
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.28%
ROIC(5y)N/A
ROICexc(3y)12.28%
ROICexc(5y)N/A
ROICexgc(3y)16.15%
ROICexgc(5y)N/A
ROCE(3y)12.9%
ROCE(5y)N/A
ROICexcg growth 3Y60.02%
ROICexcg growth 5Y23.31%
ROICexc growth 3Y50.38%
ROICexc growth 5Y23.73%
OM growth 3Y72.3%
OM growth 5Y26.88%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.01%
GM growth 5Y2.57%
F-Score5
Asset Turnover1.46
Health
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF 0.09
Debt/EBITDA 0.09
Cap/Depr 26.47%
Cap/Sales 0.38%
Interest Coverage 250
Cash Conversion 183.95%
Profit Quality 356.79%
Current Ratio 2.33
Quick Ratio 1.53
Altman-Z 3.62
F-Score5
WACC9.66%
ROIC/WACC0.81
Cap/Depr(3y)46.41%
Cap/Depr(5y)37.91%
Cap/Sales(3y)0.51%
Cap/Sales(5y)0.47%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.15%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%13.64%
EPS Next Y0.52%
EPS Next 2Y5.65%
EPS Next 3Y7.48%
EPS Next 5Y7.62%
Revenue 1Y (TTM)2.24%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%2.88%
Revenue Next Year5.33%
Revenue Next 2Y4.84%
Revenue Next 3Y4.46%
Revenue Next 5Y4.35%
EBIT growth 1Y-8.57%
EBIT growth 3Y95.2%
EBIT growth 5Y21.47%
EBIT Next Year77.43%
EBIT Next 3Y26.36%
EBIT Next 5Y21.12%
FCF growth 1Y69.01%
FCF growth 3Y126.11%
FCF growth 5Y6.39%
OCF growth 1Y58.51%
OCF growth 3Y114.96%
OCF growth 5Y5.88%