NYSE:NOV
NOV Inc.
A leading provider of integrated drilling and completion products serving the global energy sector's upstream operations.
Key Metrics
Investment Thesis
Bull Case
The stock offers attractive value given its strong balance sheet with $1.55B in cash exceeding current liabilities of $2.41B. Historical revenue stability above $8B suggests the business model can withstand moderate downturns in energy markets. Significant share buybacks indicate management confidence in intrinsic value and a commitment to boosting earnings per share over time.
Bear Case
The massive retained earnings deficit of -$673M signals historical losses that still weigh on the equity base despite recent profitability. Net income volatility from $985M in 2023 down to just $151M in 2025 demonstrates extreme sensitivity to commodity cycles. Heavy capital expenditures of $375M combined with non-cash adjustments exceeding $1B suggests earnings quality may be overstated by accounting entries.
About NOV Inc.
NOV Inc. provides comprehensive energy services including drilling equipment manufacturing, well completion systems, and oilfield technology solutions to global upstream customers. The company serves the oil and gas industry across North America, Europe, and Asia with a focus on enhancing operational efficiency for drilling and production activities.
Analysis
Management Discussion
Despite a significant drop in net income from $635M in 2024 to $151M in 2025, the company maintained strong operating cash flow of $1.25B indicating robust underlying business quality. The reduction in revenue from $8.87B to $8.74B reflects a cautious industry environment where customers are managing capital discipline. However, the company continues to return substantial cash to shareholders through $315M in share repurchases and $190M in dividends.
Industry Overview
The oilfield services industry is cyclical and directly correlated with global energy demand and drilling activity levels. Companies in this sector face intense competition from both traditional manufacturers and specialized technology providers offering integrated solutions. Recent trends show a shift toward digitalization and automation as operators seek to maximize output while reducing workforce costs.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $7.24B | $8.58B | $8.87B | $8.74B |
| Cost of Revenue | $5.90B | $6.75B | $6.86B | $6.98B |
| Gross Profit | $1.33B | $1.83B | $2.01B | $1.77B |
| Operating Expenses | $1.07B | $1.18B | $1.13B | $1.27B |
| Operating Income | $264.0M | $651.0M | $876.0M | $494.0M |
| G&A | $1.07B | $1.18B | $1.13B | $1.20B |
| Stock-Based Comp | $67.0M | $66.0M | $70.0M | $67.0M |
| D&A | $301.0M | $302.0M | $343.0M | $355.0M |
| Depreciation | $250.0M | $260.0M | $294.0M | $300.0M |
| Amortization | $51.0M | $43.0M | $49.0M | $55.0M |
| Other OpEx | $0 | $0 | $0 | $70.0M |
| Non-Operating Income | $-26.0M | $-39.0M | $-45.0M | $-119.0M |
| Interest Expense | $78.0M | $88.0M | $91.0M | $88.0M |
| Interest Income | $19.0M | $28.0M | $38.0M | $51.0M |
| Pre-Tax Income | $238.0M | $612.0M | $831.0M | $375.0M |
| Income Tax | $83.0M | $-373.0M | $196.0M | $224.0M |
| Continuing Ops | $155.0M | $985.0M | $635.0M | $151.0M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $155.0M | $985.0M | $635.0M | $151.0M |
| Minority Interest | $0 | $-8.0M | $0 | $6.0M |
| Net to Common | $155.0M | $993.0M | $635.0M | $145.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $5.49B | $5.84B | $5.77B | $5.82B |
| Cash & Equivalents | $1.07B | $816.0M | $1.23B | $1.55B |
| Inventory | $1.81B | $2.15B | $1.93B | $1.80B |
| Prepaid Expenses | $187.0M | $229.0M | $212.0M | $172.0M |
| Other Current Assets | $2.42B | $2.64B | $2.40B | $2.30B |
| Long-Term Assets | $4.64B | $5.45B | $5.59B | $5.47B |
| PP&E (Net) | $1.78B | $1.86B | $1.92B | $2.05B |
| Intangibles | $490.0M | $450.0M | $508.0M | $455.0M |
| Goodwill | $1.50B | $1.56B | $1.63B | $1.58B |
| Operating Leases | $346.0M | $372.0M | $353.0M | $315.0M |
| Other LT Assets | $403.0M | $994.0M | $1.01B | $906.0M |
| Total Assets | $10.13B | $11.29B | $11.36B | $11.29B |
| Current Liabilities | $2.44B | $2.44B | $2.35B | $2.41B |
| Accounts Payable | $906.0M | $904.0M | $837.0M | $831.0M |
| Current Debt | $13.0M | $13.0M | $37.0M | $30.0M |
| Current Leases | $67.0M | $70.0M | $72.0M | $71.0M |
| Deferred Revenue | $444.0M | $532.0M | $492.0M | $565.0M |
| Taxes Payable | $28.0M | $22.0M | $18.0M | $57.0M |
| Other Current Liab | $20.0M | $24.0M | $30.0M | $30.0M |
| Long-Term Liabilities | $2.56B | $2.62B | $2.59B | $2.56B |
| Long-Term Debt | $1.72B | $1.71B | $1.70B | $1.69B |
| LT Operating Leases | $334.0M | $343.0M | $301.0M | $289.0M |
| Other LT Liab | $513.0M | $562.0M | $582.0M | $586.0M |
| Total Liabilities | $5.00B | $5.05B | $4.93B | $4.97B |
| Shareholders' Equity | $5.13B | $6.24B | $6.43B | $6.32B |
| Retained Earnings | $-2.07B | $-1.16B | $-628.0M | $-673.0M |
| AOCI | $-1.59B | $-1.49B | $-1.62B | $-1.42B |
| Total L&E | $10.13B | $11.29B | $11.36B | $11.29B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $155.0M | $985.0M | $635.0M | $151.0M |
| Non-Cash Adjustments | $-1.99B | $-1.34B | $1.25B | $1.39B |
| Working Capital Changes | $1.65B | $496.0M | $-585.0M | $-293.0M |
| Cash from Operations | $-179.0M | $143.0M | $1.30B | $1.25B |
| Capital Expenditures | $214.0M | $283.0M | $351.0M | $375.0M |
| Cash from Investing | $-238.0M | $-293.0M | $-471.0M | $-362.0M |
| Debt Issuances | $20.0M | $2.0M | $420.0M | $3.0M |
| Debt Repayments | $4.0M | $10.0M | $431.0M | $26.0M |
| Share Buybacks | — | — | $229.0M | $315.0M |
| Dividends Paid | $78.0M | $79.0M | $108.0M | $190.0M |
| Cash from Financing | $-96.0M | $-103.0M | $-406.0M | $-584.0M |
| FX Effect | $-9.0M | $0 | $-13.0M | $17.0M |
| Net Change in Cash | $-522.0M | $-253.0M | $414.0M | $322.0M |
| Beginning Cash | $1.59B | $1.07B | $816.0M | $1.23B |
| Ending Cash | $1.07B | $816.0M | $1.23B | $1.55B |
Frequently Asked Questions
How does NOV Inc. make money?
The company generates revenue primarily through its Drilling and Completion Products segments, manufacturing equipment for rig installations and well completions. Additional streams come from its Services segment offering maintenance and repair capabilities, as well as Technology solutions providing data analytics and automation tools for energy operators.
What are the main risks for NOV?
Revenue is highly sensitive to fluctuations in crude oil prices which directly impact customer capital expenditure budgets. The energy transition poses a long-term risk as operators reduce spending on fossil fuel exploration and production. Regulatory changes regarding environmental standards could increase compliance costs or restrict operations in key markets. High inventory levels relative to revenue suggest potential obsolescence risks if market demand slows.
What is NOV's competitive advantage?
NOV leverages a diverse product portfolio that allows it to serve customers across various operating environments including deepwater and arctic regions. The company's extensive global supply chain and manufacturing footprint provide cost efficiencies and rapid deployment capabilities. Strong relationships with major international oil companies create high switching costs and recurring service contracts.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.