Why NYSE:NOW Is a Standout High-Growth Stock in a Consolidation Phase.

Last update: Dec 25, 2023

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if SERVICENOW INC (NYSE:NOW) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted SERVICENOW INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

A Closer Look at Growth for NYSE:NOW

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:NOW has received a 9 out of 10:

The Earnings Per Share has grown by an impressive 46.82% over the past year.
NOW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 44.86% yearly.
The Revenue has grown by 22.47% in the past year. This is a very strong growth!
The Revenue has been growing by 30.44% on average over the past years. This is a very strong growth!
NOW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.37% yearly.
The Revenue is expected to grow by 21.51% on average over the next years. This is a very strong growth

ChartMill's Evaluation of Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:NOW has received a 6 out of 10:

An Altman-Z score of 11.75 indicates that NOW is not in any danger for bankruptcy at the moment.
NOW has a better Altman-Z score (11.75) than 88.21% of its industry peers.
The Debt to FCF ratio of NOW is 0.63, which is an excellent value as it means it would take NOW, only 0.63 years of fcf income to pay off all of its debts.
NOW's Debt to FCF ratio of 0.63 is amongst the best of the industry. NOW outperforms 82.86% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that NOW is not too dependend on debt financing.

Profitability Assessment of NYSE:NOW

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:NOW scores a 7 out of 10:

NOW has a better Return On Assets (10.51%) than 93.21% of its industry peers.
NOW has a Return On Equity of 22.08%. This is amongst the best in the industry. NOW outperforms 93.21% of its industry peers.
NOW's Return On Invested Capital of 5.93% is amongst the best of the industry. NOW outperforms 82.50% of its industry peers.
The 3 year average ROIC (3.84%) for NOW is below the current ROIC(5.93%), indicating increased profibility in the last year.
NOW has a better Profit Margin (18.72%) than 91.43% of its industry peers.
NOW has a better Operating Margin (7.64%) than 78.93% of its industry peers.
NOW's Operating Margin has improved in the last couple of years.
NOW has a better Gross Margin (78.52%) than 79.29% of its industry peers.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:NOW has a 7 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, NOW also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price.

More Strong Growth stocks can be found in our Strong Growth screener.

Our latest full fundamental report of NOW contains the most current fundamental analsysis.

Our latest full technical report of NOW contains the most current technical analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.