DNOW Should I Buy
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DNOW Inc is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is currently facing significant challenges, including ERP issues, declining financial performance, and negative sentiment from hedge fund activity. While the stock is oversold and analysts maintain a Buy rating with a reduced price target, the lack of strong positive catalysts and ongoing legal investigations make it prudent to hold off on investing until the company demonstrates recovery or stability.
The stock is in an oversold condition with RSI at 16.524. The MACD is negative at -0.614, indicating bearish momentum, and moving averages are converging, suggesting indecision. Key support is at 10.932, and resistance is at 12.169, with the current price near support levels.
Analysts maintain a Buy rating despite lowering the price target, citing transitory ERP issues and potential for long-term growth. The company has shown strong revenue growth YoY.
Significant stock price drop due to disappointing Q4 2025 results and ERP challenges. Legal investigations and potential class action lawsuits are ongoing. Hedge funds are heavily selling, increasing selling activity by 4965.22% last quarter. Gross margin, net income, and EPS have all declined sharply YoY.
In Q4 2025, revenue increased by 67.95% YoY to $959 million. However, net income dropped by -712.50% YoY to -$147 million, EPS declined by -531.82% YoY to -0.95, and gross margin fell by -130.01% YoY to -6.99. The company is facing significant profitability challenges.
Stifel lowered the price target from $18 to $16 while maintaining a Buy rating, citing transitory ERP issues. Texas Capital initiated coverage with a Buy rating and a $19 price target, highlighting cost synergies and cross-selling opportunities for long-term growth.
