Intrinsic value of NOW Inc. - DNOW

Previous Close

$12.39

  Intrinsic Value

$2.04

stock screener

  Rating & Target

str. sell

-84%

Previous close

$12.39

 
Intrinsic value

$2.04

 
Up/down potential

-84%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DNOW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -30.00
  34.00
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
Revenue, $m
  2,107
  2,823
  3,701
  4,756
  5,999
  7,441
  9,087
  10,942
  13,006
  15,280
  17,761
  20,445
  23,328
  26,405
  29,672
  33,124
  36,758
  40,571
  44,562
  48,730
  53,075
  57,600
  62,308
  67,203
  72,290
  77,577
  83,071
  88,781
  94,717
  100,891
  107,313
Variable operating expenses, $m
 
  3,290
  4,303
  5,521
  6,956
  8,619
  10,520
  12,660
  15,044
  17,668
  20,532
  23,599
  26,926
  30,478
  34,249
  38,233
  42,428
  46,829
  51,435
  56,246
  61,262
  66,485
  71,918
  77,568
  83,440
  89,542
  95,884
  102,475
  109,326
  116,452
  123,865
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,329
  3,290
  4,303
  5,521
  6,956
  8,619
  10,520
  12,660
  15,044
  17,668
  20,532
  23,599
  26,926
  30,478
  34,249
  38,233
  42,428
  46,829
  51,435
  56,246
  61,262
  66,485
  71,918
  77,568
  83,440
  89,542
  95,884
  102,475
  109,326
  116,452
  123,865
Operating income, $m
  -222
  -467
  -602
  -765
  -956
  -1,179
  -1,433
  -1,719
  -2,037
  -2,388
  -2,771
  -3,153
  -3,598
  -4,073
  -4,577
  -5,109
  -5,670
  -6,258
  -6,873
  -7,516
  -8,186
  -8,884
  -9,610
  -10,365
  -11,150
  -11,965
  -12,813
  -13,694
  -14,609
  -15,561
  -16,552
EBITDA, $m
  -169
  -396
  -519
  -667
  -841
  -1,043
  -1,274
  -1,533
  -1,823
  -2,142
  -2,489
  -2,865
  -3,269
  -3,701
  -4,158
  -4,642
  -5,152
  -5,686
  -6,245
  -6,829
  -7,438
  -8,073
  -8,732
  -9,418
  -10,131
  -10,872
  -11,642
  -12,443
  -13,274
  -14,140
  -15,040
Interest expense (income), $m
  4
  3
  10
  18
  27
  39
  52
  67
  84
  103
  124
  147
  171
  198
  226
  256
  288
  321
  356
  393
  431
  471
  513
  556
  601
  648
  696
  747
  799
  854
  911
Earnings before tax, $m
  -230
  -470
  -612
  -782
  -984
  -1,218
  -1,485
  -1,786
  -2,121
  -2,491
  -2,895
  -3,300
  -3,770
  -4,271
  -4,803
  -5,365
  -5,958
  -6,579
  -7,230
  -7,909
  -8,618
  -9,356
  -10,123
  -10,921
  -11,751
  -12,613
  -13,509
  -14,440
  -15,408
  -16,415
  -17,463
Tax expense, $m
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -234
  -470
  -612
  -782
  -984
  -1,218
  -1,485
  -1,786
  -2,121
  -2,491
  -2,895
  -3,300
  -3,770
  -4,271
  -4,803
  -5,365
  -5,958
  -6,579
  -7,230
  -7,909
  -8,618
  -9,356
  -10,123
  -10,921
  -11,751
  -12,613
  -13,509
  -14,440
  -15,408
  -16,415
  -17,463

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  106
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,603
  2,007
  2,631
  3,380
  4,264
  5,288
  6,458
  7,777
  9,244
  10,860
  12,623
  14,531
  16,580
  18,767
  21,089
  23,542
  26,125
  28,835
  31,672
  34,634
  37,722
  40,938
  44,284
  47,763
  51,379
  55,136
  59,041
  63,100
  67,319
  71,706
  76,271
Adjusted assets (=assets-cash), $m
  1,497
  2,007
  2,631
  3,380
  4,264
  5,288
  6,458
  7,777
  9,244
  10,860
  12,623
  14,531
  16,580
  18,767
  21,089
  23,542
  26,125
  28,835
  31,672
  34,634
  37,722
  40,938
  44,284
  47,763
  51,379
  55,136
  59,041
  63,100
  67,319
  71,706
  76,271
Revenue / Adjusted assets
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
  1.407
Average production assets, $m
  327
  438
  574
  737
  930
  1,153
  1,408
  1,696
  2,016
  2,368
  2,753
  3,169
  3,616
  4,093
  4,599
  5,134
  5,697
  6,289
  6,907
  7,553
  8,227
  8,928
  9,658
  10,416
  11,205
  12,024
  12,876
  13,761
  14,681
  15,638
  16,634
Working capital, $m
  612
  678
  888
  1,141
  1,440
  1,786
  2,181
  2,626
  3,122
  3,667
  4,263
  4,907
  5,599
  6,337
  7,121
  7,950
  8,822
  9,737
  10,695
  11,695
  12,738
  13,824
  14,954
  16,129
  17,350
  18,618
  19,937
  21,307
  22,732
  24,214
  25,755
Total debt, $m
  65
  209
  384
  595
  843
  1,131
  1,460
  1,830
  2,243
  2,697
  3,192
  3,728
  4,304
  4,919
  5,571
  6,260
  6,986
  7,748
  8,545
  9,377
  10,245
  11,149
  12,089
  13,066
  14,083
  15,138
  16,236
  17,376
  18,562
  19,794
  21,077
Total liabilities, $m
  420
  564
  739
  950
  1,198
  1,486
  1,815
  2,185
  2,598
  3,052
  3,547
  4,083
  4,659
  5,274
  5,926
  6,615
  7,341
  8,103
  8,900
  9,732
  10,600
  11,504
  12,444
  13,421
  14,438
  15,493
  16,591
  17,731
  18,917
  20,149
  21,432
Total equity, $m
  1,183
  1,443
  1,892
  2,430
  3,066
  3,802
  4,644
  5,591
  6,647
  7,809
  9,076
  10,448
  11,921
  13,494
  15,163
  16,927
  18,784
  20,733
  22,772
  24,902
  27,122
  29,435
  31,840
  34,342
  36,942
  39,643
  42,451
  45,369
  48,402
  51,557
  54,839
Total liabilities and equity, $m
  1,603
  2,007
  2,631
  3,380
  4,264
  5,288
  6,459
  7,776
  9,245
  10,861
  12,623
  14,531
  16,580
  18,768
  21,089
  23,542
  26,125
  28,836
  31,672
  34,634
  37,722
  40,939
  44,284
  47,763
  51,380
  55,136
  59,042
  63,100
  67,319
  71,706
  76,271
Debt-to-equity ratio
  0.055
  0.140
  0.200
  0.240
  0.280
  0.300
  0.310
  0.330
  0.340
  0.350
  0.350
  0.360
  0.360
  0.360
  0.370
  0.370
  0.370
  0.370
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
  0.380
Adjusted equity ratio
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719
  0.719

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -234
  -470
  -612
  -782
  -984
  -1,218
  -1,485
  -1,786
  -2,121
  -2,491
  -2,895
  -3,300
  -3,770
  -4,271
  -4,803
  -5,365
  -5,958
  -6,579
  -7,230
  -7,909
  -8,618
  -9,356
  -10,123
  -10,921
  -11,751
  -12,613
  -13,509
  -14,440
  -15,408
  -16,415
  -17,463
Depreciation, amort., depletion, $m
  53
  71
  83
  98
  116
  136
  159
  185
  214
  246
  281
  288
  329
  372
  418
  467
  518
  572
  628
  687
  748
  812
  878
  947
  1,019
  1,093
  1,171
  1,251
  1,335
  1,422
  1,512
Funds from operations, $m
  577
  -399
  -528
  -684
  -868
  -1,082
  -1,326
  -1,601
  -1,907
  -2,245
  -2,613
  -3,012
  -3,441
  -3,899
  -4,385
  -4,899
  -5,440
  -6,007
  -6,602
  -7,222
  -7,870
  -8,544
  -9,245
  -9,974
  -10,732
  -11,520
  -12,339
  -13,189
  -14,074
  -14,994
  -15,950
Change in working capital, $m
  342
  172
  211
  253
  298
  346
  395
  445
  496
  546
  595
  644
  692
  739
  784
  829
  872
  915
  958
  1,000
  1,043
  1,086
  1,130
  1,175
  1,221
  1,269
  1,319
  1,370
  1,425
  1,482
  1,541
Cash from operations, $m
  235
  -571
  -739
  -937
  -1,167
  -1,428
  -1,721
  -2,046
  -2,403
  -2,790
  -3,209
  -3,656
  -4,133
  -4,637
  -5,169
  -5,727
  -6,312
  -6,923
  -7,559
  -8,223
  -8,913
  -9,630
  -10,375
  -11,149
  -11,953
  -12,789
  -13,657
  -14,560
  -15,498
  -16,475
  -17,492
Maintenance CAPEX, $m
  0
  -30
  -40
  -52
  -67
  -85
  -105
  -128
  -154
  -183
  -215
  -250
  -288
  -329
  -372
  -418
  -467
  -518
  -572
  -628
  -687
  -748
  -812
  -878
  -947
  -1,019
  -1,093
  -1,171
  -1,251
  -1,335
  -1,422
New CAPEX, $m
  -11
  -111
  -136
  -163
  -193
  -223
  -255
  -287
  -320
  -352
  -385
  -416
  -447
  -477
  -506
  -535
  -563
  -591
  -619
  -646
  -674
  -701
  -730
  -759
  -789
  -819
  -852
  -885
  -920
  -957
  -996
Cash from investing activities, $m
  -183
  -141
  -176
  -215
  -260
  -308
  -360
  -415
  -474
  -535
  -600
  -666
  -735
  -806
  -878
  -953
  -1,030
  -1,109
  -1,191
  -1,274
  -1,361
  -1,449
  -1,542
  -1,637
  -1,736
  -1,838
  -1,945
  -2,056
  -2,171
  -2,292
  -2,418
Free cash flow, $m
  52
  -711
  -915
  -1,153
  -1,426
  -1,735
  -2,081
  -2,461
  -2,877
  -3,326
  -3,809
  -4,323
  -4,868
  -5,443
  -6,047
  -6,680
  -7,342
  -8,032
  -8,750
  -9,497
  -10,273
  -11,079
  -11,916
  -12,786
  -13,689
  -14,627
  -15,602
  -16,615
  -17,670
  -18,767
  -19,909
Issuance/(repayment) of debt, $m
  -43
  144
  175
  211
  248
  288
  329
  370
  412
  454
  495
  536
  576
  615
  652
  689
  726
  762
  797
  832
  868
  904
  940
  978
  1,016
  1,056
  1,097
  1,140
  1,186
  1,233
  1,283
Issuance/(repurchase) of shares, $m
  0
  835
  1,060
  1,321
  1,619
  1,954
  2,326
  2,734
  3,177
  3,653
  4,162
  4,672
  5,243
  5,843
  6,472
  7,129
  7,815
  8,528
  9,269
  10,039
  10,838
  11,668
  12,529
  13,423
  14,351
  15,315
  16,317
  17,358
  18,442
  19,570
  20,745
Cash from financing (excl. dividends), $m  
  -47
  979
  1,235
  1,532
  1,867
  2,242
  2,655
  3,104
  3,589
  4,107
  4,657
  5,208
  5,819
  6,458
  7,124
  7,818
  8,541
  9,290
  10,066
  10,871
  11,706
  12,572
  13,469
  14,401
  15,367
  16,371
  17,414
  18,498
  19,628
  20,803
  22,028
Total cash flow (excl. dividends), $m
  16
  268
  321
  379
  441
  507
  574
  643
  712
  781
  849
  885
  951
  1,015
  1,077
  1,139
  1,199
  1,258
  1,316
  1,375
  1,433
  1,492
  1,553
  1,614
  1,678
  1,744
  1,812
  1,883
  1,958
  2,036
  2,118
Retained Cash Flow (-), $m
  220
  -835
  -1,060
  -1,321
  -1,619
  -1,954
  -2,326
  -2,734
  -3,177
  -3,653
  -4,162
  -4,672
  -5,243
  -5,843
  -6,472
  -7,129
  -7,815
  -8,528
  -9,269
  -10,039
  -10,838
  -11,668
  -12,529
  -13,423
  -14,351
  -15,315
  -16,317
  -17,358
  -18,442
  -19,570
  -20,745
Prev. year cash balance distribution, $m
 
  106
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -462
  -740
  -942
  -1,178
  -1,448
  -1,752
  -2,091
  -2,464
  -2,872
  -3,313
  -3,787
  -4,292
  -4,828
  -5,395
  -5,991
  -6,616
  -7,270
  -7,953
  -8,664
  -9,405
  -10,175
  -10,976
  -11,808
  -12,673
  -13,571
  -14,505
  -15,475
  -16,484
  -17,534
  -18,626
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -443
  -677
  -820
  -970
  -1,122
  -1,271
  -1,413
  -1,540
  -1,650
  -1,737
  -1,798
  -1,832
  -1,836
  -1,811
  -1,759
  -1,681
  -1,582
  -1,465
  -1,334
  -1,195
  -1,052
  -911
  -774
  -645
  -528
  -423
  -332
  -255
  -191
  -140
Current shareholders' claim on cash, %
  100
  59.1
  35.7
  22.0
  13.8
  8.8
  5.7
  3.7
  2.5
  1.7
  1.1
  0.8
  0.5
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

NOW Inc. (NOW) is a global distributor to the oil and gas and industrial markets. The Company operates under the DistributionNOW and Wilson Export brands. Its segments include the United States, Canada and International. As of December 31, 2016, its segments, the United States, Canada and International, had over 200, 55 and 35 locations, respectively. The United States segment comprises United States Energy, United States Supply Chain and United States Process Solutions. NOW's energy product offerings are used in the oil and gas industry, including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining, as well as in other industries, such as chemical processing, power generation and industrial manufacturing operations. It provides supply chain management to drilling contractors, exploration and production (E&P) operators, midstream operators, downstream energy and industrial manufacturing companies.

FINANCIAL RATIOS  of  NOW Inc. (DNOW)

Valuation Ratios
P/E Ratio -5.7
Price to Sales 0.6
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 5.7
Price to Free Cash Flow 5.9
Growth Rates
Sales Growth Rate -30%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -27.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 5.5%
Total Debt to Equity 5.5%
Interest Coverage -57
Management Effectiveness
Return On Assets -13.4%
Ret/ On Assets - 3 Yr. Avg. -10.4%
Return On Total Capital -17%
Ret/ On T. Cap. - 3 Yr. Avg. -13.2%
Return On Equity -18.1%
Return On Equity - 3 Yr. Avg. -13.9%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 16.4%
Gross Margin - 3 Yr. Avg. 17.7%
EBITDA Margin -8.2%
EBITDA Margin - 3 Yr. Avg. -6.4%
Operating Margin -10.5%
Oper. Margin - 3 Yr. Avg. -7.7%
Pre-Tax Margin -10.9%
Pre-Tax Margin - 3 Yr. Avg. -7.9%
Net Profit Margin -11.1%
Net Profit Margin - 3 Yr. Avg. -8.3%
Effective Tax Rate -1.7%
Eff/ Tax Rate - 3 Yr. Avg. 12.1%
Payout Ratio 0%

DNOW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DNOW stock intrinsic value calculation we used $2107 million for the last fiscal year's total revenue generated by NOW Inc.. The default revenue input number comes from 2016 income statement of NOW Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DNOW stock valuation model: a) initial revenue growth rate of 34% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for DNOW is calculated based on our internal credit rating of NOW Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of NOW Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DNOW stock the variable cost ratio is equal to 116.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for DNOW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.6% for NOW Inc..

Corporate tax rate of 27% is the nominal tax rate for NOW Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DNOW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DNOW are equal to 15.5%.

Life of production assets of 11 years is the average useful life of capital assets used in NOW Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DNOW is equal to 24%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1183 million for NOW Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 106.981 million for NOW Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of NOW Inc. at the current share price and the inputted number of shares is $1.3 billion.

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MSM MSC Industrial 94.49 65.36  sell
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COMPANY NEWS

▶ NOW, Inc. Value Analysis (NYSE:DNOW) : December 26, 2017   [Dec-26-17 12:50PM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : December 14, 2017   [Dec-14-17 01:13PM  Capital Cube]
▶ Estimating The Intrinsic Value Of NOW Inc (DNOW)   [Dec-08-17 09:33AM  Simply Wall St.]
▶ ETFs with exposure to NOW, Inc. : November 27, 2017   [Nov-27-17 01:10PM  Capital Cube]
▶ NOV spinoff Now Inc. announces new CFO and related C-suite changes   [Nov-20-17 09:25AM  American City Business Journals]
▶ NOW Inc. Announces Organizational Changes   [Nov-16-17 06:45AM  Business Wire]
▶ ETFs with exposure to NOW, Inc. : November 14, 2017   [Nov-14-17 02:15PM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : November 3, 2017   [Nov-03-17 12:06PM  Capital Cube]
▶ NOW Is Not The Time To Buy This Oil Stock   [Nov-02-17 04:12PM  Benzinga]
▶ NOW Inc.'s Results Continue to Improve   [12:09PM  Motley Fool]
▶ NOW, Inc. to Host Earnings Call   [07:20AM  ACCESSWIRE]
▶ Now reports 3Q loss   [06:51AM  Associated Press]
▶ NOW Inc. Reports Third Quarter 2017 Results   [06:45AM  Business Wire]
▶ ETFs with exposure to NOW, Inc. : October 2, 2017   [Oct-02-17 10:48AM  Capital Cube]
▶ NOW, Inc. Value Analysis (NYSE:DNOW) : September 27, 2017   [Sep-27-17 10:50AM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : August 28, 2017   [Aug-28-17 05:09PM  Capital Cube]
▶ Pete Miller to retire from NOV spinoff   [Aug-24-17 09:00AM  American City Business Journals]
▶ ETFs with exposure to NOW, Inc. : August 16, 2017   [Aug-16-17 05:36PM  Capital Cube]
▶ Now reports 2Q loss   [Aug-02-17 09:23PM  Associated Press]
▶ NOW Inc. Reports Second Quarter 2017 Results   [06:45AM  Business Wire]
▶ ETFs with exposure to NOW, Inc. : July 24, 2017   [Jul-24-17 03:25PM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : July 14, 2017   [Jul-14-17 01:58PM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : June 15, 2017   [Jun-15-17 01:44PM  Capital Cube]
▶ 3 Top Oil Stocks to Buy in June   [Jun-08-17 12:14PM  Motley Fool]
▶ ETFs with exposure to NOW, Inc. : June 1, 2017   [Jun-01-17 01:44PM  Capital Cube]
▶ Arnold Schneider Gains New Energy Holdings in 1st Quarter   [May-31-17 12:01PM  GuruFocus.com]
▶ ETFs with exposure to NOW, Inc. : May 16, 2017   [May-16-17 12:50PM  Capital Cube]
▶ 3 Hidden Gems in the Oil Sector   [May-09-17 08:11AM  Motley Fool]
▶ ETFs with exposure to NOW, Inc. : May 3, 2017   [May-03-17 03:50PM  Capital Cube]
▶ Now reports 1Q loss   [06:51AM  Associated Press]
▶ NOW Inc. Reports First Quarter 2017 Results   [06:45AM  Business Wire]
▶ NOW, Inc. Value Analysis (NYSE:DNOW) : May 1, 2017   [May-01-17 04:56PM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : April 21, 2017   [Apr-21-17 02:52PM  Capital Cube]
▶ ETFs with exposure to NOW, Inc. : April 5, 2017   [Apr-05-17 04:38PM  Capital Cube]
▶ 3 Little-Known Energy Companies to Put on Your Radar   [Mar-31-17 02:42PM  Motley Fool]
▶ Now reports 4Q loss   [07:00AM  Associated Press]
▶ NOW Inc (DNOW): Are Hedge Funds Right About This Stock?   [Dec-05-16 12:49PM  at Insider Monkey]
▶ NOW Inc. Announces Distributorship Agreements   [Nov-07-16 06:45AM  Business Wire]
▶ NOW Incs Results Bounce Off the Bottom   [05:00PM  at Motley Fool]
Financial statements of DNOW
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