Exploring the Growth Potential of NYSE:NOW as It Nears a Breakout.

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.

Assessing Growth Metrics for NYSE:NOW

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:NOW boasts a 9 out of 10:

• NOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.98%, which is quite impressive.
• Measured over the past years, NOW shows a very strong growth in Earnings Per Share. The EPS has been growing by 33.92% on average per year.
• Looking at the last year, NOW shows a very strong growth in Revenue. The Revenue has grown by 24.17%.
• NOW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.02% yearly.
• Based on estimates for the next years, NOW will show a very strong growth in Earnings Per Share. The EPS will grow by 21.63% on average per year.
• NOW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.57% yearly.

How do we evaluate the Health for NYSE:NOW?

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 11.46 indicates that NOW is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 11.46, NOW belongs to the top of the industry, outperforming 90.49% of the companies in the same industry.
• The Debt to FCF ratio of NOW is 0.49, which is an excellent value as it means it would take NOW, only 0.49 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of NOW (0.49) is better than 78.52% of its industry peers.
• NOW has a Debt/Equity ratio of 0.17. This is a healthy value indicating a solid balance between debt and equity.
• 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.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:NOW, the assigned 8 is noteworthy for profitability:

• NOW has a Return On Assets of 6.29%. This is amongst the best in the industry. NOW outperforms 82.75% of its industry peers.
• NOW has a better Return On Equity (13.22%) than 85.92% of its industry peers.
• With an excellent Return On Invested Capital value of 7.92%, NOW belongs to the best of the industry, outperforming 83.80% of the companies in the same industry.
• The 3 year average ROIC (4.58%) for NOW is below the current ROIC(7.92%), indicating increased profibility in the last year.
• NOW's Profit Margin of 11.51% is amongst the best of the industry. NOW outperforms 80.99% of its industry peers.
• NOW's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 10.78%, NOW belongs to the top of the industry, outperforming 81.34% of the companies in the same industry.
• NOW's Operating Margin has improved in the last couple of years.
• With a decent Gross Margin value of 79.07%, NOW is doing good in the industry, outperforming 77.82% of the companies in the same industry.

How does the Setup look for NYSE:NOW

Alongside the Technical Rating, ChartMill assigns a Setup Rating to evaluate the consolidation level of a stock. This rating, ranging from 0 to 10, is updated daily and considers various short-term technical indicators. The current setup rating for NYSE:NOW is 8:

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. There is a resistance zone just above the current price starting at 827.62. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 781.80, a Stop Loss order could be placed below this zone.

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

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

For an up to date full technical analysis you can check the technical report of NOW

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.