What Happened?
Shares of energy and industrial distributor DNOW (NYSE:DNOW) fell 4.4% in the afternoon session after markets reacted to President Trump's threat to "completely obliterate" Iran's energy infrastructure and the critical Kharg Island hub. The ultimatum raised the specter of a total energy supply shock. Notably, Kharg Island handles 90% of Iran's crude exports. The escalating rhetoric, including potential ground force deployment to seize fuel hubs, drove a flight to safety.
The shares closed the day at $11.63, down 5.1% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy DNOW? Access our full analysis report here, it’s free.
What Is The Market Telling Us
DNOW’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 19.1% on the news that the company reported disappointing fourth-quarter 2025 financial results, which included a significant loss and missed Wall Street's expectations.
For the quarter, DNOW posted revenue of $959 million, which fell short of analysts' estimates. The results were particularly weak on the bottom line, with the company reporting a GAAP loss of $0.95 per share, a significant miss compared to the profit of $0.15 per share that analysts had anticipated. The quarter's performance, which came after the company's recent all-stock acquisition of MRC Global, was also marked by a sharp decline in profitability. Adding to investor concerns, DNOW's operating margin fell to negative 17.7%, a steep drop from the positive 5.1% margin recorded in the same period of the previous year.
DNOW is down 10.1% since the beginning of the year, and at $12.01 per share, it is trading 30.6% below its 52-week high of $17.31 from April 2025. Despite the year-to-date decline, investors who bought $1,000 worth of DNOW’s shares 5 years ago would now be looking at an investment worth $1,182.
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