DNOW - Now Inc. upgraded at Stephens on steady margin progression

Now Inc. (DNOW +7.5%) has gained 20% in two days after reporting better than expected Q3 earnings, swinging from a year-ago loss, and a 35% Y/Y increase in revenues to $439M. Stephens analyst Tommy Moll upgrades shares to Overweight from Equal Weight with a $12 price target, citing "enhanced visibility to improved profitability as the company has demonstrated a commitment to protect gross margins," with its third consecutive record margin in Q3. Following Q3's 10% Q/Q revenue improvement and ~200 bps margin expansion, "Now looks to exit 2021 with a nearly $90M Y/Y improvement in adjusted EBITDA, and we see continued progress through 2022 as revenue is set to grow double-digits and incremental margins creep into the mid-to-high teens," Moll writes.

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Now Inc. upgraded at Stephens on steady margin progression