DNOW (DNOW) just reported fourth quarter and full year 2025 results that combined higher sales with a swing to net loss, along with an update that its previously announced share repurchase program is now completed.
See our latest analysis for DNOW.
At a share price of US$11.78, DNOW’s recent 7 day share price return of an 11% decline and 30 day share price return of a 22% decline suggest fading momentum after the earnings driven swing from profit to loss. This is also reflected in its 1 year total shareholder return of a 26% decline.
If this update has you rethinking where you want exposure to the energy supply chain, it could be worth looking at 23 power grid technology and infrastructure stocks as a fresh set of ideas beyond DNOW.
So with sales at US$2,820 million, a full year net loss of US$89 million and the stock down 26% over 12 months, is DNOW now trading below its underlying worth, or is the market already pricing in its future growth?
Most Popular Narrative: 26.4% Undervalued
Against DNOW's last close of $11.78, the most followed narrative is anchored on a fair value of $16, implying meaningful upside based on projected cash flows and business mix.
Generation of strong cash flow and a robust balance sheet with $197 million in cash and no debt, supporting growth through organic and inorganic opportunities, potentially boosting earnings via accretive acquisitions and share repurchase programs.
Curious what kind of revenue path, margin profile and future earnings multiple have to line up to support that price target? The key assumptions behind this narrative lean heavily on how fast the top line compounds, how much profitability resets after the current loss making period, and what sort of valuation multiple the market could eventually be willing to pay for that earnings stream. The full narrative breaks down those moving parts so you can judge whether they stack up for you.
Result: Fair Value of $16 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this depends on ERP issues being resolved within the timeframe analysts expect, and on project delays, customer consolidations and weaker activity not putting further pressure on earnings.
Find out about the key risks to this DNOW narrative.
Next Steps
Given the mixed signals in this update, it makes sense to move quickly, test the assumptions and let the data guide your own view, starting with 3 key rewards and 1 important warning sign.
Looking for more investment ideas?
If DNOW no longer feels like the whole story for your portfolio, this is the moment to broaden your watchlist and pressure test fresh opportunities.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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