# NOV Inc. (NOV) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-28  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/NOV/thesis · /stocks/NOV/memo

## Financial Snapshot

---
step: 04
title: Financial Snapshot
ticker: NOV
source: coverage-next-full
created: 2026-05-28
---

### Step 04 — Financial Snapshot: NOV Inc.

#### Key Findings

- NOV's financial profile shows a company that **recovered strongly from the 2014–2020 depression** (EBITDA $172M in 2021 → $1,219M in 2024), but is now experiencing a **cycle-mix compression** in 2025–2026: gross margin peaked at 22.7% (FY2024), fell to 20.2% (FY2025) and 18.5% (Q1 2026).
- Free cash flow ($876M FY2025) remains robust and dramatically higher than reported GAAP net income ($145M), reflecting large D&A from goodwill amortization and working capital tailwinds. FCF quality is the core of the capital return story.
- The balance sheet is conservative: $1.55B cash, $2.34B total debt, $0.79B net debt against $6.32B equity. Leverage is not a risk; capital allocation optionality is the variable.

#### Income Statement Summary

##### Annual Trend (FY2021–FY2025, USD M)

| FY | Revenue | Gross Profit | Gross Margin | Op Income | Op Margin | Net Income | EPS (Dil) | Adj EBITDA |
|----|---------|-------------|-------------|-----------|-----------|------------|-----------|------------|
| 2021 | 5,524 | 774 | 14.0% | (134) | (2.4%) | (250) | (0.65) | 172 |
| 2022 | 7,237 | 1,334 | 18.4% | 264 | 3.7% | 155 | 0.39 | 565 |
| 2023 | 8,583 | 1,833 | 21.4% | 651 | 7.6% | 993 | 2.50 | 953 |
| 2024 | 8,870 | 2,010 | 22.7% | 876 | 9.9% | 635 | 1.60 | 1,219 |
| 2025 | 8,744 | 1,767 | 20.2% | 494 | 5.7% | 145 | 0.39 | 849 (1,030 mgmt adj) |

**Key observation**: Revenue plateaued in FY2024–FY2025 while margins compressed sharply. FY2025 vs FY2024: op margin –420bps, net income –77%, EPS –76%. This earnings compression is the primary reason for NOV's low reported P/E (trailing 82×) and the argument for "forward-looking" valuation using normalized or FY2027 consensus earnings.

##### Quarterly Trend (Q2 2024 – Q1 2026, USD M)

| Quarter | Revenue | Gross Profit | Gross Margin | Op Income | Op Margin | Net Income | EPS |
|---------|---------|-------------|-------------|-----------|-----------|------------|-----|
| Q2 2024 | 2,216 | 590 | 26.6% | 313 | 14.1% | 226 | 0.57 |
| Q3 2024 | 2,191 | 469 | 21.4% | 194 | 8.9% | 130 | 0.33 |
| Q4 2024 | 2,308 | 493 | 21.4% | 207 | 9.0% | 160 | 0.41 |
| Q1 2025 | 2,103 | 447 | 21.3% | 152 | 7.2% | 73 | 0.19 |
| Q2 2025 | 2,188 | 446 | 20.4% | 143 | 6.5% | 108 | 0.29 |
| Q3 2025 | 2,176 | 412 | 18.9% | 107 | 4.9% | 42 | 0.11 |
| Q4 2025 | 2,277 | 462 | 20.3% | 92 | 4.0% | (78) | (0.21) |
| Q1 2026 | 2,052 | 379 | 18.5% | 47 | 2.3% | 19 | 0.05 |

**Q1 2026 is the trough candidate**: 2.3% op margin with $47M op income on $2.05B revenue — the lowest in this cycle. This sets the comparison base for the recovery thesis.

#### Cash Flow Summary

##### Annual (FY2021–FY2025, USD M)

| FY | Op CF | CapEx | FCF | Buybacks | Dividends | Net Capital Return |
|----|-------|-------|-----|----------|-----------|-------------------|
| 2021 | 291 | (201) | 90 | 0 | (20) | 20 |
| 2022 | (179) | (214) | (393) | 0 | (78) | 78 |
| 2023 | 143 | (283) | (140) | 0 | (79) | 79 |
| 2024 | 1,304 | (351) | 953 | (229) | (108) | 337 |
| 2025 | 1,251 | (375) | 876 | (315) | (190) | 505 |

**FCF >> Net Income**: FY2025 FCF $876M vs. NI $145M — a 6× ratio. This gap reflects D&A running well above capex (indicating significant legacy goodwill and asset amortization) and working capital changes. FCF is the more reliable metric for dividend/buyback sustainability analysis.

**FY2026 FCF guide**: 40–50% of EBITDA (~$1.0B guided) = **$400–500M FCF**. At $190M dividends, residual for buyback = $210–310M. Buyback pace decelerates from $315M (FY2025).

#### Balance Sheet

##### Annual Snapshot (FY2021–FY2025, USD M)

| FY | Cash | Total Debt | LT Debt | Net Debt | Equity | Total Assets | WC |
|----|------|-----------|---------|---------|--------|-------------|-----|
| 2021 | 1,591 | 2,388 | 1,708 | 797 | 5,064 | 9,550 | 2,992 |
| 2022 | 1,069 | 2,366 | 1,717 | 1,297 | 5,134 | 10,135 | 3,056 |
| 2023 | 816 | 2,377 | 1,712 | 1,561 | 6,242 | 11,294 | 3,405 |
| 2024 | 1,230 | 2,386 | 1,703 | 1,156 | 6,428 | 11,361 | 3,423 |
| 2025 | 1,552 | 2,340 | 1,688 | 788 | 6,322 | 11,291 | 3,414 |

**Net debt of $0.79B** is the lightest it has been in this cycle. Leverage ratio: $0.79B net debt / $1.03B adj EBITDA = **0.77× net leverage** — extremely conservative. No near-term refinancing requirement; FY2025 debt reduction ~$46M (not aggressive paydown, rather steady maturity management).

#### Profitability & Margin Analysis

| Metric | FY2023 | FY2024 | FY2025 | Q1 2026 |
|--------|--------|--------|--------|---------|
| Gross Margin | 21.4% | 22.7% | 20.2% | 18.5% |
| Op Margin | 7.6% | 9.9% | 5.7% | 2.3% |
| Net Margin | 11.6% | 7.2% | 1.7% | 0.9% |
| FCF Margin | (1.6%) | 10.8% | 10.0% | n/a |
| Adj EBITDA Margin | 11.1% | 13.7% | 11.8% (9.7% GAAP) | ~7–8% |

**Margin recovery thesis**: If op margin reverts to FY2023 levels (7–8%) on flat revenue ($8.7B), that implies ~$600–700M operating income. At historical tax + minority interest levels, NI would be ~$400–500M, or ~$1.10–1.40/share on 360M diluted shares. Forward consensus of $1.30 FY2027E is consistent with this recovery path.

#### Valuation Snapshot

| Metric | Value |
|--------|-------|
| Price (retrieval) | $20.32 |
| Market Cap | $7.29B |
| Enterprise Value | $8.26B |
| EV/Adj EBITDA (FY2025) | 8.0× |
| EV/Adj EBITDA (FY2026E, ~$1.0B) | ~8.3× |
| P/E (trailing) | 82.1× (distorted by low NI) |
| P/E (FY2026E consensus $0.80) | 25.4× |
| P/E (FY2027E consensus $1.30) | 15.6× |
| FCF Yield (FY2025 FCF $876M / mkt cap $7.29B) | 12.0% |
| FCF Yield (FY2026E FCF ~$400–500M) | 5.5–6.9% |
| Dividend Yield | 1.77% ($0.50/share) |

**8–9× EV/EBITDA** on depressed margins is the base valuation anchor. Peers (SLB, HAL) trade 8–12× depending on quality and cycle position. At EV/EBITDA 9× on $1.1B normalized EBITDA (FY2023–FY2024 average), implied EV = $9.9B, equity = $9.1B, or ~$25/share — implying ~23% upside from current price.

#### Assumption Register Updates

- A06: FY2025 op margin compression cyclical + tariff, not structural — hypothesis; FY2026 H2 will test this (cost savings + offshore backlog mix).
- A08: Net debt $0.79B conservative — confirmed.
- A11: Normalized cycle-mid ROIC ~10–12% — consistent with FY2023–FY2024 op margins when extrapolated to invested capital base.

#### Source Index

| ID | Source |
|----|--------|
| S1 | NOV_financials/xbrl/xbrl_summary.md |
| S3 | NOV_financials/other/stockanalysis_summary.md |
| S5 | NOV_financials/sec_filings/10K_FY2025_summary.md |
| S6 | NOV_financials/other/consensus.md |
| S7 | NOV_financials/presentations/investor_presentation_2025.md |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/NOV/fundamental

## Navigation

- Overview: /stocks/NOV
- Financials (this page): /stocks/NOV/financials
- Thesis: /stocks/NOV/thesis
- Investment Memo: /stocks/NOV/memo
- Coverage universe: /stocks