NOV INC. (NOV): what the price assumes

boothcheck covers NOV INC. (NOV) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/NOV

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 9.5% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.3%); the inversion above states its own rate.

Per-Model Detail (n=11)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 18.2%); the trailing year was depressed.

Bullet Takeaways

• NOV makes the heavy capital equipment and consumable parts that drilling and energy companies need worldwide, with about 66% of 2025 revenue from outside the United States Approximately 66% of our revenues in 2025 were derived from operations outside the, so its fortunes track global energy capital spending more than the U.S. rig count.
• The defining risk is the cycle: at a 4.5% trailing operating margin the business is near a trough, and the price is cheap only if mid-cycle economics return, which depend on oil and gas prices the company does not control.
• The next markers are Energy Equipment bookings (Q1 2026 hit $520M, the strongest first quarter since 2019) against a $4.23B backlog, and the Q2 guide for revenue down 4% to 6% year over year.

Bull Case

The obvious fear with NOV is that it is a leveraged bet on the oil cycle at exactly the wrong time: trailing margins are thin, revenue is declining, and the Middle East conflict knocked an estimated $54 million off the most recent quarter's sales. The data complicates that fear. The order book is not behaving like a business heading into a downturn. Energy Equipment bookings reached $520 million in the first quarter of 2026, up $83 million year over year and the strongest first-quarter intake since 2019, and the capital equipment backlog stood at $4.23 billion at quarter-end. The 10-K confirms the scale of that order book, citing a backlog of capital equipment to be manufactured, assembled, tested and delivered by Energy Equipment in the amount of $4.34 bill at year-end 2025. Customers do not place multi-year equipment orders into a falling cycle; they place them when they see a multi-year build coming.

The second thing the fear misses is the quality of the balance sheet for a cyclical. NOV carries only about $632 million of net debt, well under half a year of mid-cycle operating income, and interest is covered roughly eighteen times over. That is not a company that has to survive the trough; it is one that can buy back stock and pay dividends through it. In the first quarter alone NOV returned $100 million to shareholders, $67 million in repurchases and $33 million in dividends, retiring about 3.5 million shares. The share count has been falling about 1.5% a year. A cyclical that shrinks its share base at the bottom of the cycle is loading the spring for the recovery.

The business mix is sturdier than the oilfield label suggests. A large slice of revenue is aftermarket and services, the spare parts and repair work on an enormous installed base that customers cannot defer indefinitely, plus a growing presence in offshore wind and other energy infrastructure. Mid-cycle, the operating margin runs near 18%, four times the trailing figure. The bull case is simply that NOV is a high-quality industrial franchise priced as if the trough is permanent, when its own backlog says otherwise.

Bear Case

The price embeds one assumption: that NOV's earnings recover toward mid-cycle from today's depressed level. Strip that assumption out and the cheapness disappears. At a 4.5% trailing operating margin the business is earning a fraction of what it does in a good year, and the entire value case rests on margins climbing back toward the high teens. That is the most fragile thing in the thesis, because it does not depend on NOV's execution. It depends on oil and gas prices and customer capital budgets, which the company is candid it cannot control. The 10-K is blunt that demand depends on drilling and remediation activity, which depends in turn upon oil and gas prices, the general outlook for economic growth worldwide. A prolonged period of low oil prices, or a structural plateau in upstream spending as capital shifts elsewhere, and the mid-cycle recovery the price assumes simply does not arrive.

The geographic concentration sharpens that risk. About 66% of 2025 revenue came from outside the United States Approximately 66% of our revenues in 2025 were derived from operations outside the, much of it in regions where geopolitics, not market demand, sets the pace. The Middle East disruption that cost an estimated $54 million in revenue and $32 million in EBITDA in a single quarter, partly through freight costs that ran three to four times normal, is a concrete example of how an international order book turns into delayed shipments and stranded margin when a region destabilizes. A diversified footprint reads as a strength until several regions wobble at once.

The near-term direction is still down. Management guided second-quarter revenue to decline 4% to 6% year over year, so the backlog conversion is fighting a softening current market. The valuation methods reflect the tension: the relative-multiple and growth-discounted lenses support today's price, but the methods anchored on static earnings power read it as expensive, because a 4.5% margin does not generate much earnings to value. The bear case is that the trough is longer and shallower than the bull expects, and a buyer waiting for the mid-cycle margin to return spends years collecting a thin dividend while the cycle takes its time.

Valuation

Begin with the central distortion: NOV's trailing operating margin is about 4.5%, near a cyclical trough, and any multiple built on that number is misleading in both directions. Value the business on the earnings it produces in a normal cycle, where the operating margin runs near 18%, and the picture changes completely. At today's $18.64 (June 27, 2026) the stock trades at roughly 5 times blended earnings, a level that prices in almost no recovery at all. The market is treating the trough as the run rate.

The methods split along the line you would expect for a depressed cyclical. The relative-multiple and growth-discounted lenses support the price, and the methods built on static earnings power read it as expensive, simply because a 4.5% margin throws off little earnings to capitalize. The asset-based lens looks distorted for the same reason: when current returns on capital are far below mid-cycle, the asset multiples flag the stock as expensive even though the replacement value of NOV's equipment and installed base is substantial. The honest interpretation is not that NOV is expensive; it is that none of the static methods can see past the trough year. The recovery case lives in the backlog and the mid-cycle margin, not in the trailing income statement.

Solvency removes the usual cyclical danger. Net debt of about $632 million sits at roughly 0.4 times operating income, interest is covered around eighteen times, and the company is buying back stock and paying a dividend rather than husbanding cash to survive. That is a balance sheet built to wait out the trough, not endure it. The bet the buyer underwrites is patience: that the $4.23 billion backlog converts, that mid-cycle margins return, and that the global energy capital spending NOV serves resumes its build. The downside is bounded by the assets and the cash; the upside requires the cycle to cooperate.

Catalysts

The first quarter of 2026 showed a business holding revenue steady while absorbing an external shock. Consolidated revenue was $2.05 billion, down 2% year over year, with net income of $19 million, or $0.05 per diluted share, and adjusted EBITDA of $177 million at 8.6% of sales. Management attributed an estimated $54 million revenue and $32 million EBITDA hit to the Middle East conflict, through delayed capital-equipment shipments, freight costs at times three to four times normal, and reduced manufacturing.

The order data ran the other way. Energy Equipment bookings of $520 million were up $83 million year over year and the strongest first-quarter intake since 2019, leaving a capital equipment backlog of $4.23 billion, with management framing the demand as the start of a multi-year capital-equipment cycle. Capital returns continued through the soft patch: NOV returned $100 million to shareholders, $67 million in buybacks retiring about 3.5 million shares and $33 million in dividends.

The near-term guide tempers the order momentum. NOV expects second-quarter consolidated revenue to decline 4% to 6% year over year, so the backlog is converting against a still-softening market. The markers to watch are straightforward: the trajectory of Energy Equipment bookings quarter to quarter, whether the backlog grows or is drawn down, and any easing of the Middle East disruption that would let delayed shipments flow. Each tells you whether the multi-year cycle management describes is materializing or receding.

Peer Cohorts (Per Segment, With Filing Citations)

Energy Products and Services (reported)

• SLB (SLB LIMITED/NV)
• FY2025 10-K: …digital transformations. These services include transition support from on-prem to cloud-based digital solutions, data clean-up and migration, workflow automation - including deployment of workflow solutions built within SLB's global network of Innovation Factori workspaces - and training to further enable customers'…
• FY2025 10-K: …reduce cycle time and improve efficiency of workflows to allow customers to make better, faster decisions to improve their project economics and reservoir performance. • Digital Operations: Combines the strengths of SLB's oilfield services with advanced digital technologies to deliver more reliable, efficient, and…
• HAL (HALLIBURTON COMPANY)
• FY2025 10-K: …receivables from this customer. HAL 2025 FORM 10-K | 27 Table of Contents Item 7 | Business Environment and Results of Operations BUSINESS ENVIRONMENT AND RESULTS OF OPERATIONS We operate in more than 70 countries throughout the world to provide a comprehensive range of services and products to the energy industry.…
• FY2025 10-K: …of renewable energy or other sustainability efforts, leading to less focus on oil and natural gas production growth; - restrictions on our customers ' ability to get their produced oil and natural gas to market due to infrastructure limitations or other governmental limitations on transportation of produced oil and…
• BKR (Baker Hughes Co)
• FY2025 10-K: …for which the Company recognizes revenue at a point in time includes equipment manufactured on a standardized basis for sale to the market. The Company uses proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is generally…
• FY2025 10-K: …by expanding our offering in high potential markets where we have differentiated solutions and in-demand capabilities for LNG, gas infrastructure, power generation, data centers, industrial manufacturing and oilfield production. • Delivering results in new energy: We are making strategic investments to drive…
• WFRD (Weatherford International plc)
• FY2025 10-K: …develop and produce from their oil and natural gas reservoirs more efficiently. Our products and services are designed to enable our customers to increase production rates while reducing their costs of drilling and production. Reportable Segments We offer our services and technologies in relation to the well life…
• FY2025 10-K: …for additional information. Weatherford International plc - 2025 Form 10-K | 32 Table of Contents Item 7 | MD&A Outlook Growth and spending in the energy services industry is highly dependent on many external factors. These include but are not limited to; the impact from geopolitical conflicts; our customers' capital…
• XPRO (Expro Group Holdings N.V.)
• FY2025 10-K: …specific engineering costs associated with a project. We also procure products and services on behalf of our customers that are provided by third parties for which we are reimbursed with a mark-up or in connection with an integrated services contract. We also design, manufacture and sell equipment, which is typically…
• FY2025 10-K: …to their approved annual budgets and higher or lower activity in the first quarter of the year based on whether the new year's budget has been approved. Customers We derive our revenue from services and product sales to customers primarily in the oil and gas industry. No single customer accounted for more than 10% of…
• NESR (NATIONAL ENERGY SERVICES REUNITED CORP.)
• FY2025 10-K: Services, which aggregate services performed during distinct stages of a typical life cycle of an oil and gas well. 39 Production Services . Our Production Services segment includes the results of operations from services that are generally offered and performed during the completion and production stages of a well's…
• FY2025 10-K: NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS SHAREHOLDERS' EQUITY (In US$ thousands, except share data) Common Stock and Additional Accumulated Other Ordinary Paid-in Comprehensive Retained Total Description Shares Capital Income Income Equity Balance at December 31, 2024 96,045,856…
• WTTR (SELECT WATER SOLUTIONS, INC.)
• FY2025 10-K: ​ ​ Water Infrastructure ​ Water Services ​ Chemical Technologies ​ Other ​ Eliminations ​ Totals Revenue ​ $ 293,862 ​ $ 910,479 ​ $ 260,840 ​ $ - ​ $ ( 13,106 ) ​ $ 1,452,075 Costs of revenue excluding depreciation, amortization and accretion ​ ​ ( 148,772 ) ​ ​ ( 721,205 ) ​ ​ ( 222,195 ) ​ ​ - ​ ​ 13,106 ​ ​ (…
• FY2025 10-K: …​ o Well Testing and Flowback. Our well testing and flowback services, covering a dynamic range of temperature, pressure, volume and H2S concentrations, aims to add value for our customers by providing well productivity data associated with our services, including fracturing support, fracturing plug drill out,…

Energy Equipment (reported)

• SLB (SLB LIMITED/NV)
• FY2025 10-K: …benefits of the ChampionX acquisition. The success of the ChampionX acquisition will depend on, among other things, our ability to combine our business with that of ChampionX in a manner that facilitates growth opportunities and realizes anticipated synergies. If we are not able to successfully achieve these…
• FY2025 10-K: …62 Item 9A. Controls and Procedures 62 Item 9B. Other Information 62 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 62 PART III Item 10. Directors, Executive Officers and Corporate Governance 63 Item 11. Executive Compensation 63 Item 12. Security Ownership of Certain Beneficial Owners…
• HAL (HALLIBURTON COMPANY)
• FY2025 10-K: …materials, particularly where we have a relationship with a single supplier for a particular resource. Many of the raw materials essential to our business require the use of rail, storage, and trucking services to transport the materials to our job sites. These services, particularly during times of high demand, may…
• FY2025 10-K: …Rates for services are typically priced on a per day, per meter, per man-hour, or similar basis. See Notes to Consolidated Financial Statements, Note 4 for further information on revenue recognition. Research and development We maintain an active research and development program. The program improves products,…
• BKR (Baker Hughes Co)
• FY2025 10-K: …for which the Company recognizes revenue at a point in time includes equipment manufactured on a standardized basis for sale to the market. The Company uses proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is generally…
• FY2025 10-K: …by expanding our offering in high potential markets where we have differentiated solutions and in-demand capabilities for LNG, gas infrastructure, power generation, data centers, industrial manufacturing and oilfield production. • Delivering results in new energy: We are making strategic investments to drive…
• WFRD (Weatherford International plc)
• FY2025 10-K: …transition, which will require adapting our technology portfolio to potentially changing market demand for products and services and to support the production of energy from sources other than hydrocarbons (e.g., geothermal, carbon capture, responsible abandonment, wind, solar and hydrogen). If the energy transition…
• FY2025 10-K: …a number of global and regional competitors. Our principal competitors include SLB, Halliburton, Baker Hughes and Expro Group Holdings. We also compete with various other suppliers who provide products and services within a smaller cross section of our product line portfolio either locally, regionally, or globally.…
• XPRO (Expro Group Holdings N.V.)
• FY2025 10-K: …or manufacture of equipment to directly support customer-related activities and approximately 10% for other property, plant and equipment, inclusive of software costs. The actual amount of capital expenditures for the purchase and manufacture of equipment may fluctuate based on market conditions. We continue to focus…
• FY2025 10-K: …other countries, which in turn will likely affect demand for crude oil and therefore the demand for the products and services we provide and the commercial opportunities available to us; • the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.