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DNOW Faces Investigation and Stock Downturn Amid Legal Concerns

Bryce TuoheyAvatar
Written by Bryce Tuohey Reviewed by Matt Monaco Fact-checked by Bryce Tuohey
Updated 2/22/2026, 8:09 am ET 2/22/2026, 8:09 am ET | 5 min 5 min read
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DNOW Inc.’s stocks have been trading down by -18.64 percent amid concerns linked to key industry challenges.

Industrials industry expert:

Analyst sentiment – negative

NOW Inc. (DNOW) holds a competitively positioned market stance within the industrial sector, as evidenced by a gross margin of 23.1% and an ebitda margin of 6.9%. Its revenue growth is robust at $2.37 billion, demonstrating a solid trajectory over both three-year (6.37%) and five-year (4.64%) periods, though profitability margins reflect moderate compression with a profit margin of 3.91%. The company is financially strong, boasting a debt-to-equity ratio of 0.02 and a current ratio of 2.5, suggesting ample liquidity to manage short-term obligations. Despite a price-to-earnings ratio of 15.28, which places it competitively within the market, the return on assets and equity metrics indicate inefficiencies in asset utilization and equity returns.

Technically, DNOW’s weekly price patterns reveal considerable volatility, seen between a high of $17.00 and a low of $13.22. The recent price action suggests a descending pattern, evidenced by the sharp drop to a current level of approximately $13.31 after previous support at $16.40 failed. Sellers dominate as recent candles indicate lower highs and lower lows, augmented by intensified selling volume. A prudent trading strategy would involve short-selling at current levels, targeting a further decline towards the $12.50 area, with a stop-loss near $14.00 to mitigate risk given the bearish momentum.

Recent news highlights substantial challenges for DNOW, including a 19% drop in share price following a Q4 earnings disappointment with adjusted EPS declining to $0.15, which indicates intensified margin pressure despite stronger revenue. The Rosen Law Firm’s investigation adds legal uncertainty to DNOW’s outlook, contrasting somewhat with broader industrial benchmarks which have, on average, navigated similar market conditions with greater resilience. DNOW’s forward prospects point to a cautious outlook, with critical resistance at $15.00 and immediate downside support around $13.00. Overall, sentiment remains negative, highlighting potential downside risk amid legal issues and profitability concerns.

Candlestick Chart

Weekly Update Feb 16 – Feb 20, 2026: On Sunday, February 22, 2026 DNOW Inc. stock [NYSE: DNOW] is trending down by -18.64%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

Recent financial data presents a troubling picture for DNOW as the oilfield services company confronts significant fiscal challenges. Fourth-quarter results highlight a decline in adjusted EPS from $0.25 to $0.15 year over year, an indicator of margin pressures despite robust revenue gains. DNOW reported $959 million in revenue for the quarter, slightly below analysts’ forecasts, casting a shadow on its financial performance.

An analysis of market data further corroborates the stock’s unstable trajectory. After opening at $16.13 and showing volatility throughout the week, closing prices dipped significantly to $13.31 on one of the trading days. This downturn aligns with the overall negative sentiment stemming from DNOW’s weak fiscal performance and potential legal challenges.

More Breaking News

Key financial ratios reveal DNOW’s tight operational environment, with an EBIT margin standing at 5.1% and a gross margin of 23.1%. These figures point to a constrained ability to convert revenue into profit, further emphasizing the strain on profitability amidst mounting expenses. Additionally, valuation metrics indicate modest leverage, indicating fiscal discipline but highlighting the need for strategic reevaluations to enhance profitability and stabilize cash flows.

Conclusion

The near-term outlook for DNOW is fraught with complexities, as the company juggles financial shortfalls with impending legal scrutiny. While robust revenues reflect its operational scale, declining margins and EPS signal a pressing need for strategic reprioritization. Traders should keep a vigilant eye on these developments, as the outcome of legal probes and potential class actions could further sway market sentiment.

Ultimately, DNOW’s path to stability will depend on its capacity to optimize operational efficiencies, rebuild trader confidence, and effectively address regulatory challenges. The road ahead calls for decisive corporate leadership and strategic clarity to navigate these turbulent market waters. As millionaire penny stock trader and teacher Tim Sykes says, “Small gains add up over time; focus on building wealth gradually, not chasing jackpots.” Embracing this mindset, DNOW can aim for steady improvements in its operations and financial metrics, rather than seeking quick fixes.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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Bryce Tuohey

Mentor and Trainer at StocksToTrade.com, Lead Mentor at Small Cap Rockets and To The Moon Report
Bryce’s first pattern was buying into strength in breakouts. But he noticed when they didn’t work, he took bigger losses. When the OTC market got hot, Bryce learned to dip buy the inevitable panics. He adapted his breakout strategy and now buys consolidation and trend breaks. His goal is to have better risk/reward and get an entry before multi-day listed breakouts.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”