NYSE:NOW, a strong growth stock, setting up for a breakout.

In this article, we'll take a closer look at SERVICENOW INC (NYSE:NOW) as a potential candidate for growth investing. While it's important for investors to conduct their own research, SERVICENOW INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

Assessing 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:

• NOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 43.50%, which is quite impressive.
• The Earnings Per Share has been growing by 33.92% on average over the past years. This is a very strong growth
• NOW shows a strong growth in Revenue. In the last year, the Revenue has grown by 24.40%.
• Measured over the past years, NOW shows a very strong growth in Revenue. The Revenue has been growing by 28.02% on average per year.
• NOW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.63% yearly.
• NOW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.57% yearly.

Unpacking NYSE:NOW's Health Rating

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:NOW scores a 6 out of 10:

• NOW has an Altman-Z score of 10.73. This indicates that NOW is financially healthy and has little risk of bankruptcy at the moment.
• NOW has a better Altman-Z score (10.73) than 85.51% of its industry peers.
• The Debt to FCF ratio of NOW is 0.47, which is an excellent value as it means it would take NOW, only 0.47 years of fcf income to pay off all of its debts.
• NOW has a Debt to FCF ratio of 0.47. This is in the better half of the industry: NOW outperforms 79.86% of its industry peers.
• A Debt/Equity ratio of 0.18 indicates that NOW is not too dependend on debt financing.
• NOW does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Insights: NYSE:NOW

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:NOW, the assigned 8 is a significant indicator of profitability:

• With an excellent Return On Assets value of 10.99%, NOW belongs to the best of the industry, outperforming 90.11% of the companies in the same industry.
• NOW has a better Return On Equity (23.78%) than 90.81% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 7.36%, NOW belongs to the top of the industry, outperforming 83.75% of the companies in the same industry.
• The last Return On Invested Capital (7.36%) for NOW is above the 3 year average (4.58%), which is a sign of increasing profitability.
• The Profit Margin of NOW (20.34%) is better than 88.69% of its industry peers.
• NOW's Profit Margin has improved in the last couple of years.
• NOW has a better Operating Margin (10.02%) than 82.33% of its industry peers.
• In the last couple of years the Operating Margin of NOW has grown nicely.
• NOW's Gross Margin of 78.87% is fine compared to the rest of the industry. NOW outperforms 78.09% of its industry peers.

How do we evaluate the setup for NYSE:NOW?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:NOW this score is currently 8:

Although the technical rating is only medium, NOW does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 779.66. Right above this resistance zone may be a good entry point.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Check the latest full fundamental report of NOW for a complete fundamental analysis.

Check the latest full technical report of NOW for a complete technical analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.