A Look at NOV’s Valuation Following Earnings Drop and Lower Revenue Guidance

NOV (NOV) released its third quarter earnings, showing net income fell sharply from last year, and followed up by forecasting a 5% to 7% decline in year-over-year revenue for the coming quarter. Investors are watching these trends closely.

See our latest analysis for NOV.

NOV has seen a burst of momentum lately, with its 90-day share price return rising 29.4% even as management signaled a softer revenue outlook and appointed a new board member. Still, the stock’s 1-year total shareholder return is just under flat at -1.6%, and long-term holders are looking at a -30% total return over three years. This underscores the volatility and shifting investor sentiment around the business.

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So with NOV’s earnings slipping and management sounding a cautious note, does the recent jump in share price mark a genuine value opportunity? Or has the market already priced in any future recovery?

Most Popular Narrative: 2.2% Undervalued

With NOV’s most popular valuation narrative putting fair value at $15.75, the gap with its $15.40 last close suggests the market almost agrees; however, a slight discount persists. Market watchers are now parsing whether stronger profit margin expectations can power an upside.

Ongoing digital transformation across the industry is increasing customer adoption of NOV's automation, robotics, and software-driven solutions. These offerings grow high-margin, recurring revenue streams and are expected to support structural margin expansion over time. (Net margins, recurring earnings)

Read the complete narrative.

Curious what underpins this barely discounted narrative? The secret is in a bold forecast for margin expansion and recurring earnings growth, included in analysts’ core projections. Unlock the full story to see which numbers are doing the heavy lifting for this fair value call.

Result: Fair Value of $15.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressures from tariffs and volatile customer budgets could quickly undermine the optimistic forecasts that support NOV's valuation case.

Find out about the key risks to this NOV narrative.

Build Your Own NOV Narrative

If you see the numbers differently or want to dig into the details yourself, you can easily craft your own NOV story in just minutes. Do it your way

A great starting point for your NOV research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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