Stifel trimmed its price objective for Now Inc (NYSE:DNOW) to $16 from $18 but left its Buy recommendation intact, citing persistent implementation problems tied to an enterprise resource planning - ERP - rollout at MRC Global's U.S. operations.
The analyst firm flagged the ERP difficulties as a material factor behind Now Inc's weaker-than-expected fourth-quarter 2025 performance and management's subsequent decision to postpone guidance for 2026. The ERP disruption is limited to MRC's U.S. businesses, which account for about 40% of Now Inc's sales. According to the company's disclosures, the remaining 60% of revenue streams are not affected by the current ERP issues.
Market reaction was swift. MRC Global's shares dropped 19.1% in the wake of the announcement, while the energy sector benchmark XLE declined roughly 0.5% over the same period. Now Inc's own share price closed at $13.23, down from the prior close of $16.36, reflecting a one-week decline of approximately 19.5%.
Company management said it is actively trying to limit additional revenue leakage tied to the ERP rollout. Despite the operational setbacks, Now Inc reported a solid liquidity position, with a current ratio of 2.34, a level Stifel and other observers view as sufficient to navigate near-term disruptions.
In response to the increased risk from ongoing ERP challenges, Stifel lowered its forward estimates to reflect the potential for diminished near-term results. Nevertheless, the firm characterized the ERP problems as likely transitory and affirmed a constructive view of Now Inc's acquisition of MRC Global. Stifel expects that, over time, Now Inc will generate improved growth and operating performance as it realizes revenue enhancements and accelerated cost synergies from the deal.
The company's latest quarterly results underscore the near-term impact of the implementation issues. Now Inc reported fourth-quarter 2025 earnings per share of $0.15, missing consensus by $0.01 versus an expected $0.16. Reported revenue for the quarter came in at $959 million, short of the $987.67 million analysts had anticipated, a revenue shortfall of about 2.9%.
Those results and the subsequent market moves are central to investor focus, particularly given management's decision to delay full-year 2026 guidance while it addresses the ERP-related disruptions. Stifel's revision to its price target and estimates reflects a calibrated response: the firm reduced near-term forecasts but maintained confidence in the longer-term strategic rationale for the MRC acquisition.
Investors and market participants will be watching for further updates from management on remediation of the ERP rollout, any additional revenue impact, and the timing for restored guidance. For now, the episode highlights the operational sensitivity of the portion of Now Inc's business tied to MRC Global's U.S. systems, and the contrast between that unit and the remainder of the company that remains unaffected.