DNOW INC (DNOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DNOW - US67011P1003 - Common Stock
13.75 USD
-0.04 (-0.29%)
13.88 USD
+0.13 (+0.95%)
We assign a fundamental rating of 5 out of 10 to DNOW. DNOW was compared to 50 industry peers in the Trading Companies & Distributors industry. DNOW has an excellent financial health rating, but there are some minor concerns on its profitability. DNOW is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
DNOW had positive earnings in the past year.
DNOW had a positive operating cash flow in the past year.
DNOW had positive earnings in 4 of the past 5 years.
DNOW had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
DNOW's Return On Assets of 5.78% is in line compared to the rest of the industry. DNOW outperforms 60.00% of its industry peers.
With a Return On Equity value of 8.12%, DNOW perfoms like the industry average, outperforming 44.00% of the companies in the same industry.
DNOW has a Return On Invested Capital of 8.34%. This is in the better half of the industry: DNOW outperforms 66.00% of its industry peers.
DNOW had an Average Return On Invested Capital over the past 3 years of 9.52%. This is in line with the industry average of 9.63%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.78% | ||
| ROE | 8.12% | ||
| ROIC | 8.34% |
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.52%
ROIC(5y)N/A
1.3 Margins
DNOW has a Profit Margin (3.95%) which is in line with its industry peers.
In the last couple of years the Profit Margin of DNOW has grown nicely.
DNOW's Operating Margin of 5.84% is in line compared to the rest of the industry. DNOW outperforms 50.00% of its industry peers.
In the last couple of years the Operating Margin of DNOW has grown nicely.
DNOW has a worse Gross Margin (23.11%) than 66.00% of its industry peers.
In the last couple of years the Gross Margin of DNOW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.84% | ||
| PM (TTM) | 3.95% | ||
| GM | 23.11% |
OM growth 3Y77.91%
OM growth 5Y29.34%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.32%
GM growth 5Y2.76%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DNOW is destroying value.
Compared to 1 year ago, DNOW has less shares outstanding
DNOW has less shares outstanding than it did 5 years ago.
DNOW has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.86 indicates that DNOW is not in any danger for bankruptcy at the moment.
DNOW has a better Altman-Z score (4.86) than 78.00% of its industry peers.
There is no outstanding debt for DNOW. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 4.86 |
ROIC/WACC0.86
WACC9.74%
2.3 Liquidity
A Current Ratio of 2.52 indicates that DNOW has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.52, DNOW is doing good in the industry, outperforming 70.00% of the companies in the same industry.
A Quick Ratio of 1.65 indicates that DNOW should not have too much problems paying its short term obligations.
DNOW has a Quick ratio of 1.65. This is in the better half of the industry: DNOW outperforms 66.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.52 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.36% over the past year.
Measured over the past years, DNOW shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.83% on average per year.
DNOW shows a small growth in Revenue. In the last year, the Revenue has grown by 3.18%.
DNOW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -4.27% yearly.
EPS 1Y (TTM)12.36%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%23.81%
Revenue 1Y (TTM)3.18%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%4.62%
3.2 Future
DNOW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.57% yearly.
Based on estimates for the next years, DNOW will show a small growth in Revenue. The Revenue will grow by 3.87% on average per year.
EPS Next Y-4.65%
EPS Next 2Y8.75%
EPS Next 3Y12.38%
EPS Next 5Y6.57%
Revenue Next Year20.93%
Revenue Next 2Y51.63%
Revenue Next 3Y33.8%
Revenue Next 5Y3.87%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 13.75, which indicates a correct valuation of DNOW.
Based on the Price/Earnings ratio, DNOW is valued cheaply inside the industry as 86.00% of the companies are valued more expensively.
DNOW is valuated rather cheaply when we compare the Price/Earnings ratio to 26.92, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 12.64, DNOW is valued correctly.
DNOW's Price/Forward Earnings ratio is rather cheap when compared to the industry. DNOW is cheaper than 92.00% of the companies in the same industry.
DNOW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.46, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.75 | ||
| Fwd PE | 12.64 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DNOW.
88.00% of the companies in the same industry are more expensive than DNOW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.42 | ||
| EV/EBITDA | 12.43 |
4.3 Compensation for Growth
A more expensive valuation may be justified as DNOW's earnings are expected to grow with 12.38% in the coming years.
PEG (NY)N/A
PEG (5Y)0.45
EPS Next 2Y8.75%
EPS Next 3Y12.38%
5. Dividend
5.1 Amount
DNOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
13.75
-0.04 (-0.29%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners61.04%
Inst Owner Change7.89%
Ins Owners1.41%
Ins Owner Change0%
Market Cap2.55B
Revenue(TTM)2.43B
Net Income(TTM)96.00M
Analysts85
Price Target18.02 (31.05%)
Short Float %3.57%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)2
Avg EPS beat(2)16.66%
Min EPS beat(2)9.25%
Max EPS beat(2)24.08%
EPS beat(4)4
Avg EPS beat(4)34.83%
Min EPS beat(4)9.25%
Max EPS beat(4)81.55%
EPS beat(8)6
Avg EPS beat(8)19.96%
EPS beat(12)8
Avg EPS beat(12)15%
EPS beat(16)12
Avg EPS beat(16)33.39%
Revenue beat(2)1
Avg Revenue beat(2)-0.97%
Min Revenue beat(2)-2.44%
Max Revenue beat(2)0.5%
Revenue beat(4)3
Avg Revenue beat(4)-0.21%
Min Revenue beat(4)-2.44%
Max Revenue beat(4)1.07%
Revenue beat(8)4
Avg Revenue beat(8)-1.07%
Revenue beat(12)6
Avg Revenue beat(12)-1.06%
Revenue beat(16)9
Avg Revenue beat(16)-0.22%
PT rev (1m)3.92%
PT rev (3m)3.92%
EPS NQ rev (1m)-13.51%
EPS NQ rev (3m)-23.81%
EPS NY rev (1m)-8.02%
EPS NY rev (3m)-8.99%
Revenue NQ rev (1m)28.07%
Revenue NQ rev (3m)62.82%
Revenue NY rev (1m)15.68%
Revenue NY rev (3m)15.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.75 | ||
| Fwd PE | 12.64 | ||
| P/S | 1.05 | ||
| P/FCF | 14.42 | ||
| P/OCF | 13.16 | ||
| P/B | 2.16 | ||
| P/tB | 2.88 | ||
| EV/EBITDA | 12.43 |
EPS(TTM)1
EY7.27%
EPS(NY)1.09
Fwd EY7.91%
FCF(TTM)0.95
FCFY6.93%
OCF(TTM)1.04
OCFY7.6%
SpS13.1
BVpS6.37
TBVpS4.78
PEG (NY)N/A
PEG (5Y)0.45
Graham Number11.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.78% | ||
| ROE | 8.12% | ||
| ROCE | 11.59% | ||
| ROIC | 8.34% | ||
| ROICexc | 10.65% | ||
| ROICexgc | 15.38% | ||
| OM | 5.84% | ||
| PM (TTM) | 3.95% | ||
| GM | 23.11% | ||
| FCFM | 7.28% |
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.52%
ROIC(5y)N/A
ROICexc(3y)12.59%
ROICexc(5y)N/A
ROICexgc(3y)16.61%
ROICexgc(5y)N/A
ROCE(3y)13.24%
ROCE(5y)N/A
ROICexgc growth 3Y65.23%
ROICexgc growth 5Y25.7%
ROICexc growth 3Y55.27%
ROICexc growth 5Y26.13%
OM growth 3Y77.91%
OM growth 5Y29.34%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.32%
GM growth 5Y2.76%
F-Score6
Asset Turnover1.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 40.48% | ||
| Cap/Sales | 0.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.44% | ||
| Profit Quality | 184.38% | ||
| Current Ratio | 2.52 | ||
| Quick Ratio | 1.65 | ||
| Altman-Z | 4.86 |
F-Score6
WACC9.74%
ROIC/WACC0.86
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)12.36%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%23.81%
EPS Next Y-4.65%
EPS Next 2Y8.75%
EPS Next 3Y12.38%
EPS Next 5Y6.57%
Revenue 1Y (TTM)3.18%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%4.62%
Revenue Next Year20.93%
Revenue Next 2Y51.63%
Revenue Next 3Y33.8%
Revenue Next 5Y3.87%
EBIT growth 1Y8.4%
EBIT growth 3Y101.55%
EBIT growth 5Y23.83%
EBIT Next Year98.99%
EBIT Next 3Y59.73%
EBIT Next 5Y17.19%
FCF growth 1Y145.83%
FCF growth 3Y126.11%
FCF growth 5Y6.39%
OCF growth 1Y117.98%
OCF growth 3Y114.96%
OCF growth 5Y5.88%
DNOW INC / DNOW FAQ
What is the fundamental rating for DNOW stock?
ChartMill assigns a fundamental rating of 5 / 10 to DNOW.
What is the valuation status of DNOW INC (DNOW) stock?
ChartMill assigns a valuation rating of 5 / 10 to DNOW INC (DNOW). This can be considered as Fairly Valued.
What is the profitability of DNOW stock?
DNOW INC (DNOW) has a profitability rating of 5 / 10.
What are the PE and PB ratios of DNOW INC (DNOW) stock?
The Price/Earnings (PE) ratio for DNOW INC (DNOW) is 13.75 and the Price/Book (PB) ratio is 2.16.
What is the expected EPS growth for DNOW INC (DNOW) stock?
The Earnings per Share (EPS) of DNOW INC (DNOW) is expected to decline by -4.65% in the next year.