DNOW
Dnow Inc.
$13.07
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Overvalued
Trading 6.8% above fair value
You pay
$13.07
Bear
$5.29
Fair
$12.24
Bull
$21.01
Bear
$5.29
-59.6%
FCF $104M × 10x
Fair
$12.24
-6.3%
FCF $134M × 13x
Bull
$21.01
+60.7%
FCF $164M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
15.3x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $17.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $12.24 per share.
Warnings
Debt per share ($4.28) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $17.50 (from 16 analysts). Our estimate is 40% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential