DNOW INC (DNOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DNOW - US67011P1003 - Common Stock
13.95 USD
-0.35 (-2.45%)
14.36 USD
+0.41 (+2.94%)
Taking everything into account, DNOW scores 5 out of 10 in our fundamental rating. DNOW was compared to 49 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 has a correct valuation and a medium growth rate.
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.
Of the past 5 years DNOW 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of DNOW (5.78%) is better than 63.27% of its industry peers.
DNOW has a Return On Equity (8.12%) which is comparable to the rest of the industry.
With a decent Return On Invested Capital value of 8.34%, DNOW is doing good in the industry, outperforming 69.39% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DNOW is in line with the industry average of 9.22%.
| 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
The Profit Margin of DNOW (3.95%) is comparable to the rest of the industry.
DNOW's Profit Margin has improved in the last couple of years.
DNOW has a Operating Margin (5.84%) which is in line with 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 65.31% 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
DNOW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DNOW has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, DNOW has less shares outstanding
The debt/assets ratio for DNOW is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.99 indicates that DNOW is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.99, DNOW belongs to the best of the industry, outperforming 81.63% of the companies in the same industry.
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 | 4.99 |
ROIC/WACC0.88
WACC9.43%
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 has a better Current ratio (2.52) than 71.43% of its industry peers.
A Quick Ratio of 1.65 indicates that DNOW should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.65, DNOW is doing good in the industry, outperforming 65.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.52 | ||
| Quick Ratio | 1.65 |
3. Growth
3.1 Past
DNOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.36%, which is quite good.
The Earnings Per Share has been growing by 30.83% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 3.18% in the past year.
The Revenue has been decreasing by -4.27% on average over the past years.
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 6.57% 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 3.87% on average per year.
EPS Next Y3.66%
EPS Next 2Y2.27%
EPS Next 3Y5.2%
EPS Next 5Y6.57%
Revenue Next Year4.54%
Revenue Next 2Y3.88%
Revenue Next 3Y4.42%
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
DNOW is valuated correctly with a Price/Earnings ratio of 13.95.
83.67% of the companies in the same industry are more expensive than DNOW, based on the Price/Earnings ratio.
DNOW is valuated rather cheaply when we compare the Price/Earnings ratio to 26.46, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 14.50, which indicates a correct valuation of DNOW.
Based on the Price/Forward Earnings ratio, DNOW is valued a bit cheaper than 75.51% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.10. DNOW is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.95 | ||
| Fwd PE | 14.5 |
4.2 Price Multiples
DNOW's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, DNOW is valued cheaply inside the industry as 87.76% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.63 | ||
| EV/EBITDA | 12.98 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DNOW does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)3.81
PEG (5Y)0.45
EPS Next 2Y2.27%
EPS Next 3Y5.2%
5. Dividend
5.1 Amount
DNOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
13.95
-0.35 (-2.45%)
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 Cap2.59B
Revenue(TTM)2.43B
Net Income(TTM)96.00M
Analysts85
Price Target17.34 (24.3%)
Short Float %3.02%
Short Ratio2.7
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)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)0%
PT rev (3m)0%
EPS NQ rev (1m)-9.01%
EPS NQ rev (3m)-11.9%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.06%
Revenue NQ rev (1m)27.13%
Revenue NQ rev (3m)27.13%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.95 | ||
| Fwd PE | 14.5 | ||
| P/S | 1.06 | ||
| P/FCF | 14.63 | ||
| P/OCF | 13.35 | ||
| P/B | 2.19 | ||
| P/tB | 2.92 | ||
| EV/EBITDA | 12.98 |
EPS(TTM)1
EY7.17%
EPS(NY)0.96
Fwd EY6.9%
FCF(TTM)0.95
FCFY6.83%
OCF(TTM)1.04
OCFY7.49%
SpS13.1
BVpS6.37
TBVpS4.78
PEG (NY)3.81
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 | 4.99 |
F-Score6
WACC9.43%
ROIC/WACC0.88
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 Y3.66%
EPS Next 2Y2.27%
EPS Next 3Y5.2%
EPS Next 5Y6.57%
Revenue 1Y (TTM)3.18%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%4.62%
Revenue Next Year4.54%
Revenue Next 2Y3.88%
Revenue Next 3Y4.42%
Revenue Next 5Y3.87%
EBIT growth 1Y8.4%
EBIT growth 3Y101.55%
EBIT growth 5Y23.83%
EBIT Next Year76.39%
EBIT Next 3Y23.48%
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 13.95 and the Price/Book (PB) ratio is 2.19.
What is the expected EPS growth for DNOW INC (DNOW) stock?
The Earnings per Share (EPS) of DNOW INC (DNOW) is expected to grow by 3.66% in the next year.