DNOW INC (DNOW) Stock Fundamental Analysis
NYSE:DNOW - New York Stock Exchange, Inc. - US67011P1003 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to DNOW. DNOW was compared to 48 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 valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year DNOW was profitable.
In the past year DNOW had a positive cash flow from operations.
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
With a decent Return On Assets value of 4.97%, DNOW is doing good in the industry, outperforming 62.50% of the companies in the same industry.
With a Return On Equity value of 7.20%, DNOW perfoms like the industry average, outperforming 41.67% of the companies in the same industry.
The Return On Invested Capital of DNOW (7.85%) is better than 64.58% of its industry peers.
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 9.66%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.97% | ||
| ROE | 7.2% | ||
| ROIC | 7.85% |
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.28%
ROIC(5y)N/A
1.3 Margins
With a Profit Margin value of 3.40%, DNOW perfoms like the industry average, outperforming 52.08% of the companies in the same industry.
DNOW's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 5.40%, DNOW perfoms like the industry average, outperforming 41.67% of the companies in the same industry.
In the last couple of years the Operating Margin of DNOW has grown nicely.
Looking at the Gross Margin, with a value of 22.83%, DNOW is doing worse than 68.75% of the companies in the same industry.
In the last couple of years the Gross Margin of DNOW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.4% | ||
| PM (TTM) | 3.4% | ||
| GM | 22.83% |
OM growth 3Y72.3%
OM growth 5Y26.88%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.01%
GM growth 5Y2.57%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DNOW is destroying value.
DNOW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for DNOW has been reduced compared to 5 years ago.
DNOW has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.41 indicates that DNOW is not in any danger for bankruptcy at the moment.
DNOW has a Altman-Z score of 3.41. This is in the better half of the industry: DNOW outperforms 62.50% of its industry peers.
DNOW has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 3.41 |
ROIC/WACC0.78
WACC10.07%
2.3 Liquidity
DNOW has a Current Ratio of 2.32. This indicates that DNOW is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.32, DNOW is doing good in the industry, outperforming 64.58% of the companies in the same industry.
A Quick Ratio of 1.48 indicates that DNOW should not have too much problems paying its short term obligations.
The Quick ratio of DNOW (1.48) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.32 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
The earnings per share for DNOW have decreased by 0.00% in the last 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.
The Revenue has been growing slightly by 4.74% in the past year.
Measured over the past years, DNOW shows a decrease in Revenue. The Revenue has been decreasing by -4.27% on average per year.
EPS 1Y (TTM)0%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%4.76%
Revenue 1Y (TTM)4.74%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%6.39%
3.2 Future
The Earnings Per Share is expected to grow by 6.03% on average over the next years.
Based on estimates for the next years, DNOW will show a small growth in Revenue. The Revenue will grow by 3.50% on average per year.
EPS Next Y-2.07%
EPS Next 2Y1.54%
EPS Next 3Y4.86%
EPS Next 5Y6.03%
Revenue Next Year3.41%
Revenue Next 2Y3.84%
Revenue Next 3Y3.32%
Revenue Next 5Y3.5%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.19 indicates a correct valuation of DNOW.
Based on the Price/Earnings ratio, DNOW is valued a bit cheaper than 77.08% of the companies in the same industry.
DNOW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.86.
The Price/Forward Earnings ratio is 15.88, which indicates a correct valuation of DNOW.
The rest of the industry has a similar Price/Forward Earnings ratio as DNOW.
The average S&P500 Price/Forward Earnings ratio is at 21.43. DNOW is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.19 | ||
| Fwd PE | 15.88 |
4.2 Price Multiples
85.42% of the companies in the same industry are more expensive than DNOW, based on the Enterprise Value to EBITDA ratio.
93.75% 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 | 8.5 | ||
| EV/EBITDA | 8.16 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.53
EPS Next 2Y1.54%
EPS Next 3Y4.86%
5. Dividend
5.1 Amount
DNOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
15.06
+0.46 (+3.15%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners99.9%
Inst Owner Change-0.55%
Ins Owners2.35%
Ins Owner Change9.16%
Market Cap1.59B
Analysts82.5
Price Target16.83 (11.75%)
Short Float %2.45%
Short Ratio2.69
Dividend
| Industry Rank | Sector 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)2
Avg EPS beat(2)53%
Min EPS beat(2)24.44%
Max EPS beat(2)81.55%
EPS beat(4)3
Avg EPS beat(4)26.54%
Min EPS beat(4)-1.96%
Max EPS beat(4)81.55%
EPS beat(8)4
Avg EPS beat(8)15.07%
EPS beat(12)8
Avg EPS beat(12)17.81%
EPS beat(16)12
Avg EPS beat(16)50.45%
Revenue beat(2)2
Avg Revenue beat(2)0.54%
Min Revenue beat(2)0.02%
Max Revenue beat(2)1.07%
Revenue beat(4)2
Avg Revenue beat(4)-1.05%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)1.07%
Revenue beat(8)3
Avg Revenue beat(8)-1.59%
Revenue beat(12)7
Avg Revenue beat(12)-0.22%
Revenue beat(16)10
Avg Revenue beat(16)0.12%
PT rev (1m)-13.16%
PT rev (3m)-10%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.54%
EPS NY rev (1m)-0.75%
EPS NY rev (3m)4.85%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.46%
Revenue NY rev (1m)0.44%
Revenue NY rev (3m)-1.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.19 | ||
| Fwd PE | 15.88 | ||
| P/S | 0.66 | ||
| P/FCF | 8.5 | ||
| P/OCF | 7.91 | ||
| P/B | 1.4 | ||
| P/tB | 1.88 | ||
| EV/EBITDA | 8.16 |
EPS(TTM)0.93
EY6.18%
EPS(NY)0.95
Fwd EY6.3%
FCF(TTM)1.77
FCFY11.76%
OCF(TTM)1.9
OCFY12.64%
SpS22.82
BVpS10.79
TBVpS8.01
PEG (NY)N/A
PEG (5Y)0.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.97% | ||
| ROE | 7.2% | ||
| ROCE | 10.92% | ||
| ROIC | 7.85% | ||
| ROICexc | 9.62% | ||
| ROICexgc | 13.77% | ||
| OM | 5.4% | ||
| PM (TTM) | 3.4% | ||
| GM | 22.83% | ||
| FCFM | 7.76% |
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-Score7
Asset Turnover1.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 36.84% | ||
| Cap/Sales | 0.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 119.64% | ||
| Profit Quality | 228.05% | ||
| Current Ratio | 2.32 | ||
| Quick Ratio | 1.48 | ||
| Altman-Z | 3.41 |
F-Score7
WACC10.07%
ROIC/WACC0.78
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)0%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%4.76%
EPS Next Y-2.07%
EPS Next 2Y1.54%
EPS Next 3Y4.86%
EPS Next 5Y6.03%
Revenue 1Y (TTM)4.74%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%6.39%
Revenue Next Year3.41%
Revenue Next 2Y3.84%
Revenue Next 3Y3.32%
Revenue Next 5Y3.5%
EBIT growth 1Y-4.41%
EBIT growth 3Y95.2%
EBIT growth 5Y21.47%
EBIT Next Year72.25%
EBIT Next 3Y25.1%
EBIT Next 5Y20.22%
FCF growth 1Y9250%
FCF growth 3Y126.11%
FCF growth 5Y6.39%
OCF growth 1Y1156.25%
OCF growth 3Y114.96%
OCF growth 5Y5.88%