Is DNOW, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for DNOW, Inc. has moved from attractive to fair, indicating a shift in its perceived value. Based on the current metrics, the company appears to be fairly valued. The P/E ratio stands at 16, while the EV to EBITDA is 7.85, and the EV to Sales ratio is 0.56. In comparison to peers, Core & Main, Inc. has a significantly higher P/E ratio of 29.46, while UGI Corp. is valued at a lower P/E of 11.86, showcasing a range of valuations within the industry.
Despite a fair valuation, DNOW, Inc. has underperformed against the S&P 500 in the short term, with a 1-month return of -7.37% compared to the index's 0.96%. However, over the longer term, the company has shown resilience with a 5-year return of 160.26%, which outpaces the S&P 500's 91.29%. This suggests that while the current valuation is fair, the stock has potential for growth based on its historical performance.