DNOW (NYSE:DNOW) Announces Quarterly Earnings Results

DNOW (NYSE:DNOW) issued its quarterly earnings data on Thursday. The oil and gas company reported $0.18 earnings per share for the quarter, topping the consensus estimate of $0.15 by $0.03, FiscalAI reports. The business had revenue of $1.34 billion during the quarter, compared to analysts’ expectations of $1.35 billion. DNOW had a negative net margin of 4.58% and a positive return on equity of 3.91%. The business’s revenue was up 110.9% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.26 EPS.

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

• Third-quarter revenue rose 2.3% sequentially to $1.34 billion, while adjusted EBITDA increased $16 million to $76 million and adjusted gross margin expanded 40 basis points to 21.2%. Management credited improved mix and margin initiatives, which partly offset higher logistics costs.
• Cash from operations was $120 million in the quarter, lifting year-to-date cash generation to $158 million; the company now expects full-year cash from operations to approach $200 million. Net debt fell to $265 million, leverage declined to 1.1x, and DNOW repurchased $17 million of shares in the quarter.
• Management expects fourth-quarter revenue to decline by a high-single-digit percentage sequentially due to seasonality, fewer business days, and year-end customer spending patterns, with EBITDA targeted at 4.5% of revenue.
• Management outlined conditional 2027 EBITDA scenarios of $300 million to $350 million, using third-quarter EBITDA annualized as a reference point—not formal guidance. The upper end depends on market growth, continued revenue recovery, and further margin improvement, while customer budgets remain unknown.
• Demand was healthy across several markets: gas utilities reached their highest quarterly revenue in three years, downstream and industrial revenue rose 10% sequentially, and Process Solutions posted a record quarter. International growth was held back by about $15 million of delayed projects, some of which are expected to shift into 2027.

DNOW Price Performance

Shares of DNOW stock traded down $0.44 during midday trading on Friday, hitting $13.28. 6,516,171 shares of the company traded hands, compared to its average volume of 2,493,041. The stock has a market cap of $2.40 billion, a price-to-earnings ratio of -11.45 and a beta of 0.95. The company has a debt-to-equity ratio of 0.23, a quick ratio of 1.06 and a current ratio of 2.14. The firm’s fifty day moving average price is $15.70 and its 200-day moving average price is $14.11. DNOW has a 12 month low of $10.94 and a 12 month high of $17.26.

DNOW News Summary

Here are the key news stories impacting DNOW this week:

• Positive Sentiment: Adjusted earnings were $0.18 per share, topping the $0.15 consensus estimate. DNOW also reported $120 million in operating cash flow and $76 million in adjusted EBITDA, which the CEO said was nearly double the first-quarter result. DNOW Reports Third Quarter 2026 Results
• Positive Sentiment: The company repurchased $17 million of shares in the quarter and $92 million year to date, supporting shareholder returns. DNOW Reports Third Quarter 2026 Results
• Neutral Sentiment: Susquehanna lowered its price target to $18 from $19 but kept a positive rating, signaling continued optimism alongside a more cautious valuation outlook. Susquehanna analyst ratings
• Negative Sentiment: Revenue of $1.337 billion fell short of the $1.35 billion consensus, while adjusted EPS declined from $0.26 a year earlier to $0.18. The earnings beat may therefore be tempered by weaker year-over-year profitability and missed sales expectations. DNOW misses Q3 2026 sales expectations

Wall Street Analyst Weigh In

Several brokerages have recently commented on DNOW. Weiss Ratings raised shares of DNOW from a “sell (d+)” rating to a “hold (c-)” rating in a report on Thursday, October 8th. Wall Street Zen upgraded DNOW from a “sell” rating to a “hold” rating in a research note on Saturday, August 8th. Susquehanna reduced their price target on DNOW from $19.00 to $18.00 and set a “positive” rating on the stock in a research report on Friday. Freedom Broker lowered shares of DNOW from a “buy” rating to a “hold” rating and set a $18.00 target price on the stock. in a report on Thursday, September 10th. Finally, DA Davidson increased their price target on shares of DNOW from $17.00 to $19.00 and gave the stock a “buy” rating in a research report on Monday, August 10th. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $18.00.

About DNOW

DNOW Inc (NYSE: DNOW) is a global distributor of products and services used in the energy and industrial sectors. The company supplies equipment and materials for upstream, midstream and downstream oil and gas operations, as well as related industrial, utility and infrastructure markets.

Its offerings include pipe, valves, fittings, flanges, and other mechanical products; production and artificial-lift equipment; electrical and instrumentation products; and maintenance, repair and operating supplies.