StockStory points to weak growth and cash generation at NOV
The publisher cites five-year sales growth, gross margins and free cash flow as reasons for caution on the oilfield equipment company.
StockStory said it was cautious on NOV, citing the company’s five-year sales growth, gross margin and free cash flow margin. The publisher said NOV shares returned 0.7% since April, compared with a 16.3% gain for the S&P 500.
The company’s sales grew at a 9.9% compounded annual rate over the past five years, according to StockStory. The publisher also said NOV’s average gross margin was 20.6% over that period, which it characterized as bottom-tier for the sector.
StockStory said NOV’s average free cash flow margin was 2.9% over five years, below what it would expect from an upstream and integrated energy business. The publisher argued that weak cash profitability leaves fewer opportunities to return capital to shareholders.
The article said NOV traded at 16.8 times forward earnings, or $18.91 per share, when it was written. As of 17:37 UTC on Oct. 2, NOV traded at $19.08, up 0.9% since the previous close.
This article was produced with the help of AI technology.
Source: Yahoo Finance
