DNOW (NYSE:DNOW) Announces Quarterly Earnings Results

DNOW (NYSE:DNOW) released its quarterly earnings data on Thursday. The oil and gas company reported $0.12 earnings per share for the quarter, topping the consensus estimate of $0.09 by $0.03, FiscalAI reports. The business had revenue of $1.31 billion during the quarter, compared to analysts’ expectations of $1.27 billion. DNOW had a positive return on equity of 3.91% and a negative net margin of 4.58%.The business’s revenue was up 108.1% on a year-over-year basis. During the same quarter last year, the business posted $0.27 EPS.

Here are the key takeaways from DNOW’s conference call:

• Second-quarter results exceeded expectations, with revenue rising 10% sequentially to $1.3 billion and adjusted EBITDA increasing 54% to $60 million, or 4.6% of revenue.
• Cash generation and working capital improved substantially, including a record $133 million of operating cash flow, a seven-day reduction in DSO, and a $131 million decline in inventory. Management expects an additional $25 million–$50 million inventory reduction during the rest of the year.
• U.S. growth was led by midstream, gas utilities, and upstream, while midstream revenue surpassed a $1 billion annualized run rate and gas utilities revenue reached an 11-quarter high. Data centers, LNG, water solutions, and infrastructure projects were identified as attractive growth opportunities.
• Management raised its full-year outlook to approximately $5.0 billion–$5.1 billion of revenue and EBITDA margin approaching 4.5%; third-quarter revenue is expected to grow at a low- to mid-single-digit sequential rate. The company also expects 2026 exit-rate cost synergies of about $30 million, above its original $17 million target.
• Integration and ERP-related costs remain a near-term headwind, while adjusted gross margin declined to 20.8% due partly to $4 million of aged-inventory charges and lower international vendor consideration. Downstream activity remains mixed, Canada was pressured by seasonal breakup, and Middle East project timing continues to be affected by geopolitical uncertainty.

DNOW Stock Performance

Shares of DNOW stock opened at $16.52 on Friday. The company has a current ratio of 2.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.23. The firm has a market capitalization of $3.02 billion, a P/E ratio of -15.44 and a beta of 0.82. The business has a fifty day simple moving average of $13.62 and a two-hundred day simple moving average of $13.34. DNOW has a 12 month low of $10.94 and a 12 month high of $17.26.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the business. T. Rowe Price Investment Management Inc. bought a new stake in DNOW during the fourth quarter worth about $11,168,000. Invesco Ltd. increased its stake in shares of DNOW by 51.9% during the fourth quarter. Invesco Ltd. now owns 1,211,925 shares of the oil and gas company’s stock valued at $16,058,000 after purchasing an additional 414,033 shares in the last quarter. Summit Global Investments increased its stake in shares of DNOW by 5.4% during the fourth quarter. Summit Global Investments now owns 16,991 shares of the oil and gas company’s stock valued at $225,000 after purchasing an additional 865 shares in the last quarter. Caitlin John LLC purchased a new position in shares of DNOW during the fourth quarter valued at approximately $274,000. Finally, Vident Advisory LLC lifted its holdings in shares of DNOW by 14.6% during the fourth quarter. Vident Advisory LLC now owns 42,170 shares of the oil and gas company’s stock valued at $559,000 after purchasing an additional 5,371 shares during the last quarter. 97.63% of the stock is currently owned by institutional investors.

Key DNOW News

Here are the key news stories impacting DNOW this week:

• Positive Sentiment: Quarterly results exceeded expectations: Q2 revenue rose 108% year over year to $1.307 billion, ahead of the approximately $1.27 billion consensus estimate. Adjusted EPS was $0.12, beating forecasts ranging from $0.08 to $0.09, although the company reported a GAAP net loss of $21 million, or $0.11 per share. DNOW Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Operating momentum improved: Revenue increased 10% sequentially, U.S. revenue grew 13%, and adjusted EBITDA climbed 54% sequentially to $60 million as integration and cost-management efforts advanced. Management also said U.S. midstream revenue exceeded a $1 billion annualized rate for the first time. DNOW Reports Second Quarter 2026 Results
• Positive Sentiment: Cash flow and capital returns strengthened: Operating cash flow reached a record $133 million, while DNOW repurchased $25 million of stock during the quarter and $75 million year to date under its $160 million authorization. Net debt leverage improved to 1.7 times. DNOW Reports Strong Second Quarter Results
• Positive Sentiment: Analyst sentiment improved: Susquehanna raised its price target from $16 to $19 and upgraded DNOW to “positive,” citing the company’s stronger sales and raised 2026 revenue and cash-flow outlook. Benzinga Analyst Update
• Neutral Sentiment: Profitability remains mixed: Reported gross margin was 18.6%, below 20.5% a year earlier, and adjusted EBITDA represented 4.6% of revenue. Investors may continue to monitor whether the higher sales volume translates into sustainable GAAP profitability.
• Negative Sentiment: Legal overhang persists: Rosen Law Firm and Bronstein, Gewirtz & Grossman announced securities class actions alleging investor harm related to DNOW’s 2025 special meeting disclosures. The developments could create litigation costs and reputational risk, although they have not offset the positive earnings reaction. DNOW Securities Class Action

Analysts Set New Price Targets

A number of brokerages recently commented on DNOW. Wall Street Zen upgraded DNOW from a “sell” rating to a “hold” rating in a report on Saturday. Freedom Capital raised shares of DNOW to a “strong-buy” rating in a research report on Monday, June 22nd. Weiss Ratings reissued a “sell (d+)” rating on shares of DNOW in a research report on Wednesday, May 27th. Zacks Research upgraded shares of DNOW from a “strong sell” rating to a “hold” rating in a report on Friday, May 22nd. Finally, DA Davidson assumed coverage on shares of DNOW in a research note on Tuesday, June 16th. They set a “buy” rating and a $17.00 target price on the stock. One analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, DNOW has a consensus rating of “Moderate Buy” and a consensus target price of $17.75.

DNOW Company Profile

DistributionNOW (NYSE: DNOW) is a global distributor of energy and industrial products, serving a broad range of end-markets including oil and gas, petrochemical, power generation, and industrial manufacturing. Headquartered in Houston, Texas, the company provides solutions across the life cycle of energy and industrial assets, with an emphasis on safety, reliability and operational efficiency.

The company’s core product portfolio includes piping systems and related components (such as valves, fittings, flanges and gaskets), instrumentation, electrical and automation equipment, fasteners, industrial safety supplies, chemicals and composite products.