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what it is
DNOW sells the pipes, valves, tools, and supply-chain help that keep energy and industrial sites running.
how it gets paid
Last year Dnow made $2.8B in revenue. Pipes, valves, fittings, and flanges was the main engine at $1.06B, or 38% of sales.
why it's growing
Revenue grew 18.8% last year. Gross margin was 17.0%. Plain English: DNOW keeps $17 on every $100 of sales before overhead.
what just happened
The latest quarter’s revenue was about ~$710M — consistent with a ~$2.8B annual run rate (not a $1.9B quarter, which would exceed the year). Gross margin on that print stayed 17.0%.
At a glance
B+ balance sheet — decent shape, but not bulletproof
20/100 earnings predictability — expect surprises
15.2x trailing p/e — the market's not buying it — or you found a deal
7.2% return on capital — nothing to write home about
$0.74 fy2024 eps est
xvary composite: 47/100 — below average
What they do
DNOW sells the pipes, valves, tools, and supply-chain help that keep energy and industrial sites running.
DNOW wins by being the boring part you cannot skip. If your well, refinery, or plant needs a valve or fitting fast, downtime costs more than the part. That matters because DNOW already serves customers across upstream, midstream, and downstream energy markets and did $2.8 billion in annual revenue.
How they make money
$2.8B
annual revenue · their business grew +18.8% last year
Pipes, valves, fittings, and flanges
$1.06B
Maintenance, repair, and operating supplies
$0.67B
Pumps, artificial lift, and mill tools
$0.45B
Electrical, safety, and spare parts
$0.34B
Supply chain and after-sales services
$0.28B
The products that matter
distributes energy and industrial supplies
u.s. operations
$2.1B · 75% of revenue mix shown here
this is the center of gravity. consolidated revenue grew ~18.8% last year — keep segment vs. prior year in that ballpark unless the filing breaks out a different U.S. growth rate.
main business
serves non-u.s. customers
international operations
$700M · 25% of revenue mix shown here
$700M of revenue that was flat. it adds reach, but it did not add growth in the latest view you have.
scale, not speed
pipes, valves and fittings
distribution economics
~17% consolidated gross margin
that matches the 17.0% gross margin called out elsewhere on this page — thin spread, so freight, labor, and integration costs matter fast.
thin spread
Key numbers
$25M
long-term debt
Long-term debt is just $25 million, or 1% of capital. Plain English: DNOW is not buried in borrowings, so an ugly cycle hurts profits before it threatens survival.
6.4%
operating margin
Operating margin was 6.4% in 2024. Plain English: for every $100 of sales, about $6.40 is left after running the business.
$2.8B
annual revenue
DNOW is not tiny. It moved $2.8 billion of product in the last year, which gives it purchasing scale that smaller distributors do not have.
15.2x
trailing p/e
Trailing P/E means price-to-earnings, or what investors pay for each dollar of profit, so what: DNOW trades at a market-like multiple for a cyclical distributor.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 4 — safer than 20% of stocks
- price stability 30 / 100
- long-term debt $25M (1% of capital)
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for DNOW right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Latest quarter revenue was about ~$710M on 17.0% gross margin — scale only helps if spreads hold.
A ~$2.8B annual top line implies roughly ~$700M per quarter on average, so treat ~$710M as the coherent quarter call (the old $1.9B / 194% vs. prior year lines contradicted the annual bridge). EPS was $0.66 on the print the page carried.
~$710M
quarter revenue
$0.66
eps (Q)
17.0%
gross margin
the number that mattered
Gross margin was 17.0%. Plain English: DNOW keeps $17 on every $100 of sales before overhead, so even small pricing pressure can hit profit fast.
source: company earnings report, 2026
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What could go wrong
the top risk is the MRC Global integration landing on top of a business that already runs thin and just lost $147M in a quarter.
high
MRC Global merger execution
the $1.5B all-stock deal has to close and integrate without disrupting a business that already averages only a 2.8% operating margin.
if scale does not lift profitability, you do not get a better business. you get a bigger low-margin distributor.
high
securities fraud investigation
Pomerantz LLP announced an investigation on Feb 26, 2026 after the stock fell 19% on the earnings report.
it adds legal and reputational pressure during a period when management needs investors to trust the merger story.
med
chronic low profitability
DNOW's trailing net profit margin is -3.2%, and its five-year average operating margin is 2.8%.
thin gross economics leave little room for cost creep, bad mix, or integration misses.
med
ERP upgrade spending
management is also funding a $55M ERP upgrade while the business is trying to stabilize results.
a low-margin operator can carry systems spending, but not comfortably if losses stay this large.
the combined risk picture is simple: a business with $2.8B in trailing revenue, a -3.2% net margin, and a $147M quarterly loss does not have much room for a bad integration.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin
operating margin versus the 2.8% baseline
this is the number that matters. if the merger makes DNOW larger but not meaningfully more profitable than its five-year average, the whole scale case weakens.
legal
fraud investigation updates
watch for any formal filings, company responses, or escalation beyond the current Pomerantz LLP announcement.
calendar
Q1 2026 earnings report
due April 30, 2026. you want to know whether margins and EPS hold after the ~$710M / $0.66 quarter, or whether merger and one-time lines widen losses again.
merger
whether the $5.45B revenue story still holds
projected 2026 revenue sounds good on paper. the catch is whether management keeps talking about scale alone or starts showing margin progress with it.
Analyst rankings
earnings predictability
20 / 100
in human-speak, analysts do not trust this business to produce clean, steady quarters.
street target setup
$16 median
the target sits above the $13.52 stock price, which tells you the street still expects recovery even after the reset quarter.
source: institutional data
Institutional activity
institutional ownership data for DNOW is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$14
current price
n/a
target midpoint · n/a from current
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