Why NYSE:NOW Is a Promising High-Growth Stock in the Midst of Consolidation.

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.

How do we evaluate the Growth for NYSE:NOW?

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:NOW has earned a 9 for growth:

• NOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 34.51%, 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 23.48%.
• The Revenue has been growing by 28.02% 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 22.11% yearly.
• Based on estimates for the next years, NOW will show a very strong growth in Revenue. The Revenue will grow by 20.20% on average per year.

Assessing Health for NYSE:NOW

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 15.80. This indicates that NOW is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of NOW (15.80) is better than 89.61% 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.
• The Debt to FCF ratio of NOW (0.44) is better than 77.06% of its industry peers.
• NOW has a Debt/Equity ratio of 0.16. This is a healthy value indicating a solid balance between debt and equity.
• 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.

Profitability Insights: NYSE:NOW

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:

• Looking at the Return On Assets, with a value of 7.25%, NOW belongs to the top of the industry, outperforming 81.00% of the companies in the same industry.
• NOW has a better Return On Equity (14.38%) than 83.87% of its industry peers.
• NOW has a better Return On Invested Capital (8.81%) than 84.23% of its industry peers.
• The 3 year average ROIC (4.58%) for NOW is below the current ROIC(8.81%), indicating increased profibility in the last year.
• NOW has a Profit Margin of 12.77%. This is amongst the best in the industry. NOW outperforms 80.65% of its industry peers.
• NOW's Profit Margin has improved in the last couple of years.
• NOW has a Operating Margin of 12.04%. This is in the better half of the industry: NOW outperforms 79.93% of its industry peers.
• NOW's Operating Margin has improved in the last couple of years.
• NOW has a better Gross Margin (79.24%) than 77.42% of its industry peers.

Looking at the Setup

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for NYSE:NOW is 7:

NOW has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 1088.25, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill 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.