Is DNOW, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for DNOW, Inc. has moved from expensive to fair, indicating a more favorable assessment of its market position. The company appears fairly valued based on its current metrics. Key ratios include a P/E ratio of 16, an EV to EBITDA of 7.85, and an EV to Sales of 0.56, which suggest that DNOW is competitively priced compared to its peers.
In the peer comparison, DNOW's P/E ratio of 16.68 is lower than that of Core & Main, Inc. at 29.46, but higher than UGI Corp.'s 11.86, indicating a range of valuations within the industry. Notably, while DNOW has shown a strong 5-year return of 175.62%, it has underperformed the S&P 500's 10-year return of 231.64%. This context reinforces the view that DNOW is fairly valued in light of its recent performance and market position.