DNOW Should I Buy
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DNOW is not a good buy for a beginner investor with a long-term strategy at this time. The company faces significant financial challenges, legal risks, and negative sentiment, which outweigh any technical or short-term trading opportunities.
The MACD is positive and expanding, indicating a bullish trend. RSI is neutral at 57.354, and moving averages are converging, suggesting no strong directional bias. The stock is trading near its pivot point of 11.918, with resistance at 12.246 and support at 11.589.
The MACD indicates a potential bullish trend, and the stock has shown a slight recovery in regular market trading (+2.03%).
Significant legal risks due to potential securities fraud lawsuits, disappointing Q4 2025 financial results with a 770.83% drop in net income, and hedge funds aggressively selling the stock. Additionally, analysts have lowered price targets due to lingering ERP issues.
In Q4 2025, revenue increased by 67.95% YoY to $959M, but net income dropped drastically to -$161M (-770.83% YoY). EPS fell to -1.03 (-568.18% YoY), and gross margin declined to 5.21 (-77.63% YoY), indicating severe profitability challenges.
Stifel lowered the price target from $18 to $16 but maintained a Buy rating, citing transitory ERP issues. However, the lowered price target reflects increased risk.
