📊 DNOW Key Takeaways
Is DNOW a Good Investment? Thesis Analysis
DNOW demonstrates revenue growth of 18.8% YoY, but profitability has deteriorated with operating and net losses of $93M and $89M respectively, indicating operational challenges despite top-line expansion. While the company maintains solid liquidity (2.34x current ratio) and generates positive free cash flow of $134M, the negative returns on equity (-4.0%) and assets (-2.3%) signal fundamental profitability issues that require near-term resolution.
Why Buy DNOW? Key Strengths
- Strong revenue growth of 18.8% YoY demonstrates market demand and top-line expansion
- Positive free cash flow of $134M provides financial flexibility despite net losses
- Healthy liquidity position with 2.34x current ratio and manageable debt-to-equity of 0.18x
- Substantial gross profit of $478M indicates operational capability at the product level
DNOW Investment Risks to Consider
- Operating loss of $93M and negative net income of $89M indicate structural profitability challenges
- Negative ROE (-4.0%) and ROA (-2.3%) suggest inefficient capital deployment and shareholder value destruction
- Deteriorating EPS of -$0.76 with -207% YoY change indicates worsening per-share performance
- Low net margin of -3.2% despite healthy gross margin of 17.0% points to high operating expense burden
- Significant insider activity (11 Form 4 filings in 90 days) may indicate management concerns
Key Metrics to Watch
- Path to operating profitability and timeline to positive net income
- Operating margin expansion relative to revenue growth
- Sustainability of free cash flow generation amid net losses
- Operating expense ratio and cost structure improvements
- Gross margin trends relative to competitive dynamics in oil and gas equipment sector
DNOW Financial Metrics
💡 AI Analyst Insight
The relatively thin 4.8% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.34x current ratio provides a solid financial cushion.
DNOW Profitability Ratios
DNOW vs Industrial Sector
How DNOW Inc. compares to Industrial sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is DNOW Overvalued or Undervalued?
Based on fundamental analysis, DNOW Inc. has mixed fundamental signals relative to the Industrial sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
DNOW Balance Sheet & Liquidity
DNOW 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: DNOW Inc.'s revenue has remained relatively flat over the 5-year period, with a 4% decline. The most recent EPS of $2.27 reflects profitable operations.
DNOW Growth Metrics (YoY)
DNOW Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $606.0M | $13.0M | $0.12 |
| Q2 2025 | $628.0M | $24.0M | $0.21 |
| Q1 2025 | $563.0M | $21.0M | $0.19 |
| Q3 2024 | $588.0M | $13.0M | $0.12 |
| Q2 2024 | $594.0M | $24.0M | $0.21 |
| Q1 2024 | $563.0M | $21.0M | $0.19 |
| Q3 2023 | $577.0M | $35.0M | $0.32 |
| Q2 2023 | $539.0M | $26.0M | $0.23 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
DNOW Capital Allocation
DNOW SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for DNOW Inc. (CIK: 0001599617)
📋 Recent SEC Filings
❓ Frequently Asked Questions about DNOW
What is the AI rating for DNOW?
DNOW Inc. (DNOW) has an AI rating of SELL with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are DNOW's key strengths?
Claude: Strong revenue growth of 18.8% YoY demonstrates market demand and top-line expansion. Positive free cash flow of $134M provides financial flexibility despite net losses.
What are the risks of investing in DNOW?
Claude: Operating loss of $93M and negative net income of $89M indicate structural profitability challenges. Negative ROE (-4.0%) and ROA (-2.3%) suggest inefficient capital deployment and shareholder value destruction.
What is DNOW's revenue and growth?
DNOW Inc. reported revenue of $2.8B.
Does DNOW pay dividends?
DNOW Inc. does not currently pay dividends.
Where can I find DNOW SEC filings?
Official SEC filings for DNOW Inc. (CIK: 0001599617) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is DNOW's EPS?
DNOW Inc. has a diluted EPS of $-0.76.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is DNOW a good stock to buy right now?
Based on our AI fundamental analysis in March 2026, DNOW Inc. has a SELL rating with 72% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is DNOW stock overvalued or undervalued?
Valuation metrics for DNOW: ROE of -4.0% (sector avg: 15%), net margin of -3.2% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy DNOW stock in 2026?
Our dual AI analysis gives DNOW Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is DNOW's free cash flow?
DNOW Inc.'s operating cash flow is $155.0M, with capital expenditures of $21.0M. FCF margin is 4.8%.
How does DNOW compare to other Industrial stocks?
Vs Industrial sector averages: Net margin -3.2% (avg: 10%), ROE -4.0% (avg: 15%), current ratio 2.34 (avg: 1.8).