DNOW's First Quarter Since Delaying Guidance Now Has Numbers to Report
Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.
Part 2.1: Price Behavior Around Earnings
DNOW reports before the market open, meaning Day 0 represents the first full trading session where investors react to results, while Day +1 captures follow-through momentum.
| Earnings Date | Day 0 Move | Day 0 Range | Day +1 Move | Day +1 Range |
|---|---|---|---|---|
| 2026-08-06 | +$1.17 (+8.23%) | $0.92 (6.47%) | +$1.13 (+7.34%) | $1.00 (6.47%) |
| 2026-05-07 | -$0.45 (-3.33%) | $0.77 (5.70%) | +$0.02 (+0.15%) | $0.51 (3.91%) |
| 2026-02-20 | -$3.13 (-19.13%) | $2.46 (15.04%) | -$1.38 (-10.43%) | $1.31 (9.90%) |
| 2025-11-05 | -$0.04 (-0.27%) | $2.93 (20.10%) | -$0.99 (-6.80%) | $1.60 (10.95%) |
| 2025-08-06 | -$1.14 (-7.48%) | $2.52 (16.54%) | +$0.77 (+5.46%) | $0.85 (6.03%) |
| 2025-05-07 | -$1.37 (-8.55%) | $1.69 (10.54%) | -$0.12 (-0.82%) | $0.91 (6.21%) |
| 2025-02-13 | +$2.84 (+20.08%) | $2.23 (15.77%) | +$0.20 (+1.18%) | $0.88 (5.18%) |
| 2024-11-07 | -$0.01 (-0.07%) | $1.27 (9.24%) | +$0.51 (+3.71%) | $0.88 (6.40%) |
| Avg Abs Move | 8.39% | 12.42% | 4.49% | 6.88% |
DNOW's post-earnings price behavior shows significant volatility, with an average absolute Day 0 move of 8.39% and Day +1 move of 4.49%. The most recent report (Q2 2026, August 6) triggered a strong positive reaction with an 8.23% Day 0 gain, reflecting investor relief at the sequential improvement and raised guidance. However, the pattern is highly inconsistent: Q1 2026 (February 20) saw a dramatic 19.13% Day 0 decline—the largest move in the dataset—when the company reported its integration struggles and suspended guidance.
The historical range is wide, with Day 0 moves spanning from -19.13% to +20.08%, suggesting earnings reports frequently deliver material surprises. The average Day 0 range of 12.42% indicates substantial intraday volatility as investors digest results. Day +1 moves tend to be smaller (4.49% average) but still meaningful, with a 6.88% average range.
Given the recent pattern, investors should expect a mid-to-high single-digit percentage move on Day 0, with direction heavily dependent on whether DNOW demonstrates continued progress on ERP stabilization, margin expansion, and revenue growth in key segments like midstream and gas utilities.
Part 2.2: Options Market Expected Move
| Metric | Value |
|---|---|
| Expiration Date | 11/20/26 (DTE 16) |
| Expected Move | $1.40 (9.12%) |
| Expected Range | $13.97 to $16.77 |
| Implied Volatility | 85.81% |
The options market is pricing a 9.12% expected move by the November 20 expiration (16 days out), with an implied range of $13.97 to $16.77. This is slightly above the 8.39% average historical Day 0 move but well below the 12.42% average Day 0 range, suggesting options traders are anticipating a meaningful but not extreme reaction. The expected move is notably lower than the most volatile recent reports (Q1's 19.13% decline, Q4 2025's 20.08% gain), indicating the market expects less dramatic surprises this time. However, it's roughly in line with the most recent Q2 2026 result (8.23% Day 0 move), suggesting traders are pricing in the possibility of another significant reaction if DNOW delivers further evidence of integration progress or setbacks.
Part 3: What Analysts Are Saying
Current Analyst Consensus
Analysts maintain a bullish stance on DNOW, with a consensus rating of 4.33 out of 5 (between Buy and Strong Buy). The breakdown shows 4 Strong Buy ratings, 0 Moderate Buys, and 2 Hold ratings, with no sell recommendations. The average price target of $18.50 implies 20% upside from the current price of $15.37, with targets ranging from a low of $17.00 to a high of $19.00.
Sentiment Trend
Analyst sentiment has remained unchanged over the past month, with the 4.33 rating and distribution of recommendations holding steady. This stability suggests analysts are maintaining their constructive views while waiting for further evidence of integration progress and margin recovery. The lack of recent upgrades or downgrades indicates the Street is in a "wait-and-see" mode following Q2's strong sequential improvement.
Price Target Implications
The consensus $18.50 target represents meaningful upside potential, reflecting analyst confidence that DNOW can successfully execute its integration plan and realize the strategic benefits of the MRC Global combination. The tight range of price targets ($17-$19) suggests relatively high conviction around the valuation, with most analysts clustering around the view that the stock is undervalued at current levels. The bullish stance is predicated on expectations that ERP challenges will continue to fade, cost synergies will accelerate, and the company's diversified end-market exposure will support more stable earnings through the cycle. However, the unchanged sentiment over the past month suggests analysts are looking for Q3 results to validate the Q2 recovery before becoming more aggressive with their targets.
Part 4: Technical Picture
Barchart Technical Opinion
DNOW's technical picture has weakened notably heading into earnings. The Barchart Technical Opinion currently stands at 56% Buy, down sharply from 88% Buy just one week ago and 88% Buy a month ago. This represents a significant deterioration in technical momentum over a very short timeframe, suggesting recent price action has turned more cautious.
Timeframe Analysis
- Short-term (Hold): Neutral signal indicates near-term momentum has stalled, with the stock consolidating after recent moves
- Medium-term (50% Buy): Moderate buy signal suggests the intermediate trend remains constructive but has lost some strength
- Long-term (100% Buy): Strong buy signal reflects positive longer-term trend structure remains intact despite recent weakness
Trend Characteristics
The trend is characterized as Average strength with the Weakest direction, indicating that while the underlying trend structure is intact, momentum has clearly deteriorated and the stock is showing signs of losing upward thrust heading into the earnings event.
Moving Average Analysis
DNOW is trading below its short-term moving averages, sitting beneath the 5-day ($16.05), 10-day ($16.01), 20-day ($15.79), and 50-day ($15.80) averages. However, the stock remains above its longer-term 100-day ($15.03) and 200-day ($14.11) moving averages. This configuration suggests the stock has pulled back from recent highs but maintains a positive longer-term trend. The clustering of the 20-day, 50-day, and current price around the $15.80 level indicates a key support zone.
| Period | Value | Period | Value |
|---|---|---|---|
| 5-Day MA | $16.05 | 50-Day MA | $15.80 |
| 10-Day MA | $16.01 | 100-Day MA | $15.03 |
| 20-Day MA | $15.79 | 200-Day MA | $14.11 |
The technical setup heading into earnings is mixed to cautious. While the longer-term trend remains constructive with the stock above its 100-day and 200-day moving averages, the recent breakdown below all short-term moving averages and the sharp deterioration in the Barchart Opinion (from 88% to 56% Buy in just one week) suggest momentum has turned negative. The stock is testing support at the $15.37 level, just below the 50-day moving average at $15.80, which represents a critical technical threshold. A strong earnings report that demonstrates continued integration progress could quickly reverse this technical weakness and propel the stock back above short-term resistance levels. Conversely, any disappointment could trigger a test of the 100-day moving average at $15.03. The weakening technical picture suggests the market is approaching this report with caution, making the earnings reaction potentially more volatile as traders reassess positioning based on the results.