Key Stats for DNOW Stock
- Price Change for DNOW stock: -19.1%
- DNOW Share Price as of Feb. 20: $13.23
- 52-Week High: $17.48
- DNOW Stock Price Target: $17
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What Happened?
DNOW Inc. (DNOW) shares dropped about 19% on February 20 after the industrial distributor reported Q4 2025 results that disappointed investors and highlighted integration issues tied to its merger with MRC Global.
The company posted Q4 revenue of $959 million, up 68% year over year and 51% sequentially as the MRC Global acquisition added roughly $388 million of sales, but the figure came in slightly below consensus forecasts.
Management said 2025 revenue reached about $2.8 billion, an increase of roughly 19% from 2024 and the company’s fifth straight year of revenue growth, while adjusted EBITDA margin for the year was about 7.4% of revenue, its highest on record.
However, legacy DNOW U.S. revenue declined sequentially in Q4, and executives cited significant challenges with the U.S. MRC Global ERP system implementation, which drove working capital up to nearly 30% of revenue and contributed to a full‑year GAAP net loss of about $89 million.
The MRC Global combination substantially expanded DNOW’s scale and product reach, and the company is targeting at least $70 million of cost synergies over several years as it consolidates systems, logistics, and overlapping functions.
Looking to 2026, DNOW guided for revenue of about $5.45 billion and EPS around $1.05, implying strong growth as synergies ramp and ERP issues ease, but investors questioned the visibility of that outlook given near‑term integration risks.
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What the Market Is Telling Us About DNOW Stock
After the sell‑off, DNOW trades at $13.23, just above its 52‑week low of $12.01 and well below the 52‑week high of $17.48, leaving the stock down sharply from levels seen before the Q4 report.
Street data show a mean 12‑month target price of $17.00 across 2 analyst estimates, implying potential upside from current levels if management delivers on its integration and synergy plans.
Those targets are clustered, with both analysts rating the stock a Buy and setting a common target range between $16 and $18, reflecting cautious optimism that DNOW can stabilize margins once ERP and merger challenges are resolved.
Forward‑looking metrics highlight the growth story: consensus projects a 41.4% forward 2‑year revenue CAGR, 40.9% EBITDA CAGR, and 21.8% EPS CAGR as the combined company benefits from larger scale and cost synergies.
Still, near‑term risks are significant. DNOW is grappling with ERP transition issues that disrupted U.S. operations, elevated working capital, and squeezed margins, and it must execute on integrating MRC Global while navigating cyclical demand across energy and industrial end markets.
Investors will be watching upcoming quarters for signs that revenue growth is translating into sustainable profitability, that ERP and inventory problems are easing, and that the company can hit its 2026 guidance without further negative surprises.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
