Is NOV a Buy? What to Consider in 2026
Last updated July 2026
Short answer
The bull case for NOV Inc (NOV) rests on Offshore and International Equipment Cycle: NOV's Energy Equipment segment, roughly 58% of revenue, is benefiting from a multi-year recovery in offshore and international project sanctioning, with Q4 2025 segment revenue up 7% sequentially and 4% year over year. Revenue (FY 2025) is ~$8.74 billion. If you believe that thesis holds, the real questions become position sizing and overlap, not timing. The main risk to that view: The largest risk is the oil and gas capital-spending cycle: when operators and drilling contractors cut budgets, demand for NOV's equipment, drill pipe, and aftermarket parts falls quickly, and global drilling activity already declined about 7% in 2025. Whether NOV is a buy comes down to whether you believe the thesis. This is informational, not a recommendation, and Walnut is not an investment adviser.
NOV Inc, known as National Oilwell Varco until its 2021 rebrand, is a Houston-based designer and manufacturer of equipment, technology, and components used across the oil and gas industry. The company operates through two reporting segments: Energy Equipment, which builds capital equipment for offshore rigs, subsea production, floating and land drilling systems, wind installation vessels, and process and flow technologies, and Energy Products and Services, which supplies drill pipe, downhole tools, drill bits, coiled tubing, composite pipe, and aftermarket parts and repair. NOV sells into a global customer base of drilling contractors, national and international oil companies, and service firms, and increasingly positions parts of its portfolio toward offshore wind and industrial process markets. The investment picture is defined by cyclicality and a shift in where demand is coming from. In 2025 total revenue fell about 1% to roughly $8.74 billion even as global drilling activity dropped around 7%, because strong offshore capital-equipment orders in the Energy Equipment segment (about 58% of revenue) offset a 4% decline in the shorter-cycle Energy Products and Services segment tied to land rig counts. NOV closed 2025 with a $4.34 billion backlog, generated about $1.03 billion in adjusted EBITDA and $876 million of free cash flow, and returned $505 million to shareholders. The bull case rests on multi-year offshore and international project spending plus disciplined cash generation, while the bear case is a prolonged downturn in drilling capital budgets.
What's the case for buying NOV?
1. Offshore and International Equipment Cycle
NOV's Energy Equipment segment, roughly 58% of revenue, is benefiting from a multi-year recovery in offshore and international project sanctioning, with Q4 2025 segment revenue up 7% sequentially and 4% year over year. Deepwater, subsea, and production-systems orders tend to be long-cycle and less sensitive to short-term oil price swings than land drilling. This mix shift is the primary reason NOV has held revenue roughly flat while global activity declined.
2. Backlog and Book-to-Bill Visibility
The company ended 2025 with a $4.34 billion backlog and a book-to-bill ratio near 91%, giving multi-quarter revenue visibility even as new orders soften. A backlog above four billion dollars provides a cushion against a weak spot market for drilling equipment. Investors watch order intake closely, since a book-to-bill below 100% signals the backlog is drawing down rather than building.
3. Cash Generation and Shareholder Returns
NOV produced about $876 million of free cash flow and $1.03 billion of adjusted EBITDA in 2025, exceeding the billion-dollar EBITDA mark for the third consecutive year. The company returned $505 million to shareholders through dividends and buybacks, including $190 million in dividends. This cash discipline, paired with a modest dividend, is central to the story given the muted growth outlook.
4. Energy Transition and Diversification Optionality
NOV supplies equipment for offshore wind installation vessels, process and flow technologies, and industrial markets that sit alongside its core oilfield business. This diversification gives the company exposure to energy-transition capital spending without abandoning its dominant conventional franchise. The scale of that contribution is still small relative to oil and gas, so it is an option on future growth rather than a current earnings driver.
What are the risks to NOV?
The largest risk is the oil and gas capital-spending cycle: when operators and drilling contractors cut budgets, demand for NOV's equipment, drill pipe, and aftermarket parts falls quickly, and global drilling activity already declined about 7% in 2025. Q1 2026 results underscored the fragility, with revenue of $2.05 billion, adjusted EBITDA of $177 million, and EPS of just $0.05 that missed estimates, hurt by Middle East conflict-related disruptions. Full-year 2026 guidance calls for slightly lower revenue and EBITDA in line to slightly below 2025, with results weighted to the second half. A declining backlog and book-to-bill below 100%, geopolitical instability in key regions, and a slower-than-expected offshore recovery all add uncertainty, and net income of $145 million in 2025 leaves the trailing valuation sensitive to any further earnings weakness.
How is NOV valued? (as of JULY 2026)
Snapshot for NOV as of July 2026, sourced from Yahoo Finance and may be delayed. Valuation figures move with price and earnings; verify the current numbers with your broker before deciding.
- Revenue (FY 2025): ~$8.74 billion
- Revenue (Q1 2026): ~$2.05 billion
- Adjusted EBITDA (FY 2025): ~$1.03 billion
- Net Income (FY 2025): ~$145 million (~$0.39 diluted EPS)
- Backlog (year-end 2025): ~$4.34 billion (book-to-bill ~91%)
- P/E Ratio (TTM): ~70x to ~75x on depressed 2025 earnings (~18x forward)
NOV's full-year 2025 revenue of roughly $8.74 billion was down about 1% year over year, a resilient outcome against a 7% drop in global drilling activity, driven by offshore capital-equipment strength in the Energy Equipment segment. The unusually high trailing P/E of roughly 70x to 75x reflects a low denominator, with 2025 net income of only $145 million (~$0.39 per diluted share), so the forward multiple near 18x and cash-flow metrics are more informative than trailing earnings. Q1 2026 was soft, with EPS of $0.05 missing consensus of $0.16 amid Middle East disruptions, and management guided 2026 to slightly lower revenue with EBITDA in line to modestly below 2025.
How do you decide if NOV is a buy?
Rather than asking whether NOV is a buy in the abstract, it tends to help to answer four questions:
- Thesis: do you believe the case above, and is it still true today?
- Time horizon: a single stock can be volatile, so a longer horizon absorbs more of the swings.
- Position sizing: a thesis can be right and the sizing still wrong; decide how much of your portfolio one name should be.
- Overlap: check whether you already hold NOV indirectly through an index or sector ETF before adding more.
For the full picture, see the NOV stock guide (what the company does, the ETFs that hold it, similar stocks, and the themes it fits). In Walnut you can ask its AI about NOV against your real portfolio and see your actual exposure before deciding.
The bottom line on NOV
The bottom line: NOV Inc's story right now is Offshore and International Equipment Cycle, with revenue (fy 2025) at ~$8.74 billion. If you believe that narrative continues, the call is about sizing NOV sensibly and checking overlap with what you own; if you doubt it (the risk: the largest risk is the oil and gas capital-spending cycle: when operators and drilling contractors cut budgets, demand for NOV's equipment, drill pipe, and aftermarket parts falls quickly, and global drilling activity already declined about 7% in 2025.), it is not for you. Decide from the thesis, not the ticker. Walnut is not an investment adviser.
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FAQ
Is NOV a good stock to buy right now?
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The case for NOV Inc right now is Offshore and International Equipment Cycle, with revenue (fy 2025) at ~$8.74 billion. If you believe that thesis holds, NOV is a way to own it and the real questions are sizing and overlap, not timing; the main risk to that view is the largest risk is the oil and gas capital-spending cycle: when operators and drilling contractors cut budgets, demand for NOV's equipment, drill pipe, and aftermarket parts falls quickly, and global drilling activity already declined about 7% in 2025. So it comes down to whether you believe the thesis. Walnut is not an investment adviser and this is not a recommendation.
What does NOV Inc do?
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NOV Inc, known as National Oilwell Varco until its 2021 rebrand, is a Houston-based designer and manufacturer of equipment, technology, and components used across the oil and gas i
What are the main risks of NOV?
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The largest risk is the oil and gas capital-spending cycle: when operators and drilling contractors cut budgets, demand for NOV's equipment, drill pipe, and aftermarket parts falls quickly, and global drilling activity already declined about 7% in 2025. Q1 2026 results underscored the fragility, with revenue of $2.05 billion, adjusted EBITDA of $177 million, and EPS of just $0.05 that missed estimates, hurt by Middle East conflict-related disruptions. Full-year 2026 guidance calls for slightly lower revenue and EBITDA in line to slightly below 2025, with results weighted to the second half. A declining backlog and book-to-bill below 100%, geopolitical instability in key regions, and a slower-than-expected offshore recovery all add uncertainty, and net income of $145 million in 2025 leaves the trailing valuation sensitive to any further earnings weakness.
What does NOV Inc do?
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NOV Inc, formerly National Oilwell Varco, designs and manufactures equipment, technology, and components for the oil and gas industry. It runs two segments: Energy Equipment, which builds offshore rig systems, subsea and production equipment, and process technologies, and Energy Products and Services, which supplies drill pipe, downhole tools, drill bits, coiled tubing, and aftermarket parts. It sells globally to drilling contractors and oil companies.
Is NOV a good stock to buy right now?
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That depends on your view of the oilfield equipment cycle and offshore spending. NOV generated about $8.74 billion in 2025 revenue and $876 million of free cash flow but earned only $145 million in net income, so the trailing P/E looks very high while the forward multiple is near 18x. Management guides 2026 to be flat to slightly softer. Whether that is attractive is a judgment based on your own goals and time horizon.
Why is NOV's P/E ratio so high?
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The high trailing P/E of roughly 70x to 75x is driven by a low earnings denominator, not a high price. NOV earned just $145 million, or about $0.39 per diluted share, in 2025 despite roughly $8.74 billion of revenue, because margins are cyclically depressed. On cash flow and forward earnings estimates near 18x, the valuation looks far less extreme, which is why investors focus on EBITDA, free cash flow, and backlog for this stock.
Does NOV pay a dividend?
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Yes. NOV pays a quarterly cash dividend, with an indicated annual rate around $0.36 per share and a yield near 2% at recent prices. The company paid about $190 million in dividends in 2025 as part of $505 million in total capital returned to shareholders through dividends and buybacks. Because the business is cyclical, the dividend has varied over time and depends on cash flow through the drilling cycle.
Walnut is informational and is not an investment adviser. This page is educational and not a recommendation to buy or sell NOV; figures are approximate and dated, and your own situation, time horizon, and risk tolerance should drive any decision. Verify current data before investing.