DNOW INC (DNOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DNOW - US67011P1003 - Common Stock
14.61 USD
-0.01 (-0.07%)
14.61 USD
0 (0%)
DNOW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 has a decent growth rate and is not valued too expensively.
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
- DNOW has a Return On Assets (5.78%) which is in line with its industry peers.
- DNOW's Return On Equity of 8.12% is in line compared to the rest of the industry. DNOW outperforms 44.00% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 8.34%, DNOW is in the better half of the industry, outperforming 66.00% of the companies in the same industry.
- 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 9.64%.
| 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
- With a Profit Margin value of 3.95%, DNOW perfoms like the industry average, outperforming 54.00% of the companies in the same industry.
- DNOW's Profit Margin has improved in the last couple of years.
- DNOW has a Operating Margin (5.84%) which is comparable to the rest of the industry.
- 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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 5.06 indicates that DNOW is not in any danger for bankruptcy at the moment.
- The Altman-Z score of DNOW (5.06) is better than 74.00% 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 | 5.06 |
ROIC/WACC0.85
WACC9.79%
2.3 Liquidity
- DNOW has a Current Ratio of 2.52. This indicates that DNOW is financially healthy and has no problem in meeting its short term obligations.
- DNOW's Current ratio of 2.52 is fine compared to the rest of the industry. DNOW outperforms 70.00% of its industry peers.
- 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.
- The Earnings Per Share has been growing by 30.83% on average over the past years. This is a very strong growth
- DNOW shows a small growth in Revenue. In the last year, the Revenue has grown by 3.18%.
- 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)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
- The Earnings Per Share is expected to grow by 12.70% on average over the next years. This is quite good.
- The Revenue is expected to grow by 21.34% on average over the next years. This is a very strong growth
EPS Next Y-4.65%
EPS Next 2Y8.75%
EPS Next 3Y12.38%
EPS Next 5Y12.7%
Revenue Next Year19.85%
Revenue Next 2Y51.92%
Revenue Next 3Y33.8%
Revenue Next 5Y21.34%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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
- A Price/Earnings ratio of 14.61 indicates a correct valuation of DNOW.
- Based on the Price/Earnings ratio, DNOW is valued cheaper than 88.00% of the companies in the same industry.
- When comparing the Price/Earnings ratio of DNOW to the average of the S&P500 Index (27.21), we can say DNOW is valued slightly cheaper.
- DNOW is valuated correctly with a Price/Forward Earnings ratio of 13.43.
- Based on the Price/Forward Earnings ratio, DNOW is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
- DNOW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.61 | ||
| Fwd PE | 13.43 |
4.2 Price Multiples
- DNOW's Enterprise Value to EBITDA ratio is in line with the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of DNOW indicates a rather cheap valuation: DNOW is cheaper than 88.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.32 | ||
| EV/EBITDA | 13.31 |
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)0.47
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% |
DNOW INC / DNOW FAQ
What is the fundamental rating for DNOW stock?
ChartMill assigns a fundamental rating of 6 / 10 to DNOW.
What is the valuation status for 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.
Can you provide the PE and PB ratios for DNOW stock?
The Price/Earnings (PE) ratio for DNOW INC (DNOW) is 14.61 and the Price/Book (PB) ratio is 2.29.