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

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether SERVICENOW INC (NYSE:NOW) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but SERVICENOW INC has surfaced on our radar for growth with base formation, warranting further examination.

Deciphering NYSE:NOW's Growth Rating

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:

• The Earnings Per Share has grown by an impressive 34.51% over the past year.
• 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.
• NOW shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.48%.
• 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.

Health Assessment of NYSE:NOW

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:NOW has earned a 6 out of 10:

• An Altman-Z score of 13.86 indicates that NOW is not in any danger for bankruptcy at the moment.
• NOW has a Altman-Z score of 13.86. This is amongst the best in the industry. NOW outperforms 89.64% of its industry peers.
• NOW has a debt to FCF ratio of 0.44. This is a very positive value and a sign of high solvency as it would only need 0.44 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.44, NOW is in the better half of the industry, outperforming 78.93% of the companies in the same industry.
• A Debt/Equity ratio of 0.16 indicates that NOW is not too dependend on debt financing.
• The current and quick ratio evaluation for NOW is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How do we evaluate the Profitability for 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 8 out of 10:

• NOW has a Return On Assets of 7.25%. This is amongst the best in the industry. NOW outperforms 82.50% of its industry peers.
• The Return On Equity of NOW (14.38%) is better than 84.64% of its industry peers.
• NOW's Return On Invested Capital of 8.81% is amongst the best of the industry. NOW outperforms 85.00% of its industry peers.
• The last Return On Invested Capital (8.81%) for NOW is above the 3 year average (4.58%), which is a sign of increasing profitability.
• NOW has a Profit Margin of 12.77%. This is amongst the best in the industry. NOW outperforms 80.71% of its industry peers.
• NOW's Profit Margin has improved in the last couple of years.
• The Operating Margin of NOW (12.04%) is better than 82.86% of its industry peers.
• In the last couple of years the Operating Margin of NOW has grown nicely.
• The Gross Margin of NOW (79.24%) is better than 77.50% of its industry peers.

How does the Setup look for NYSE:NOW

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NYSE:NOW currently holds a 7 as its setup rating, suggesting a particular level of consolidation in the stock.

NOW has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a support zone below the current price at 928.21, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

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.

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.