SERVICENOW INC (NOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NOW - US81762P1021 - Common Stock
153.13 USD
-3.55 (-2.27%)
We assign a fundamental rating of 6 out of 10 to NOW. NOW was compared to 278 industry peers in the Software industry. NOW scores excellent on profitability, but there are some minor concerns on its financial health. NOW is evaluated to be cheap and growing strongly. This does not happen too often!
1. Profitability
1.1 Basic Checks
In the past year NOW was profitable.
NOW had a positive operating cash flow in the past year.
Each year in the past 5 years NOW has been profitable.
In the past 5 years NOW always reported a positive cash flow from operatings.
1.2 Ratios
NOW has a better Return On Assets (7.94%) than 80.58% of its industry peers.
The Return On Equity of NOW (15.32%) is better than 83.09% of its industry peers.
The Return On Invested Capital of NOW (10.34%) is better than 85.25% of its industry peers.
NOW had an Average Return On Invested Capital over the past 3 years of 6.51%. This is below the industry average of 10.78%.
The 3 year average ROIC (6.51%) for NOW is below the current ROIC(10.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.94% | ||
| ROE | 15.32% | ||
| ROIC | 10.34% |
ROA(3y)6.46%
ROA(5y)4.58%
ROE(3y)14.66%
ROE(5y)10.88%
ROIC(3y)6.51%
ROIC(5y)5.28%
1.3 Margins
The Profit Margin of NOW (13.67%) is better than 76.62% of its industry peers.
In the last couple of years the Profit Margin of NOW has declined.
Looking at the Operating Margin, with a value of 13.85%, NOW belongs to the top of the industry, outperforming 80.58% of the companies in the same industry.
In the last couple of years the Operating Margin of NOW has grown nicely.
NOW has a better Gross Margin (78.05%) than 75.90% of its industry peers.
In the last couple of years the Gross Margin of NOW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.85% | ||
| PM (TTM) | 13.67% | ||
| GM | 78.05% |
OM growth 3Y41.76%
OM growth 5Y59.12%
PM growth 3Y49.27%
PM growth 5Y-6.45%
GM growth 3Y0.91%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NOW is destroying value.
NOW has more shares outstanding than it did 1 year ago.
NOW has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, NOW has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of NOW is 0.38, which is an excellent value as it means it would take NOW, only 0.38 years of fcf income to pay off all of its debts.
NOW has a Debt to FCF ratio of 0.38. This is in the better half of the industry: NOW outperforms 79.14% of its industry peers.
NOW has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.13, NOW is in line with its industry, outperforming 50.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.38 | ||
| Altman-Z | N/A |
ROIC/WACC0.95
WACC10.84%
2.3 Liquidity
A Current Ratio of 1.06 indicates that NOW should not have too much problems paying its short term obligations.
With a Current ratio value of 1.06, NOW is not doing good in the industry: 71.22% of the companies in the same industry are doing better.
A Quick Ratio of 1.06 indicates that NOW should not have too much problems paying its short term obligations.
NOW has a Quick ratio of 1.06. This is in the lower half of the industry: NOW underperforms 70.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.31% over the past year.
The Earnings Per Share has been growing by 33.14% 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 21.05%.
Measured over the past years, NOW shows a very strong growth in Revenue. The Revenue has been growing by 25.99% on average per year.
EPS 1Y (TTM)24.31%
EPS 3Y32.78%
EPS 5Y33.14%
EPS Q2Q%29.57%
Revenue 1Y (TTM)21.05%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%21.81%
3.2 Future
NOW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.48% yearly.
Based on estimates for the next years, NOW will show a quite strong growth in Revenue. The Revenue will grow by 18.38% on average per year.
EPS Next Y25.64%
EPS Next 2Y21.6%
EPS Next 3Y21%
EPS Next 5Y18.48%
Revenue Next Year20.53%
Revenue Next 2Y19.43%
Revenue Next 3Y19.11%
Revenue Next 5Y18.38%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.21, the valuation of NOW can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of NOW indicates a rather cheap valuation: NOW is cheaper than 88.49% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.61. NOW is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 7.43, the valuation of NOW can be described as very cheap.
91.73% of the companies in the same industry are more expensive than NOW, based on the Price/Forward Earnings ratio.
NOW's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.01.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.21 | ||
| Fwd PE | 7.43 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOW is valued cheaply inside the industry as 88.85% of the companies are valued more expensively.
NOW's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NOW is cheaper than 94.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.14 | ||
| EV/EBITDA | 10.64 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NOW has an outstanding profitability rating, which may justify a higher PE ratio.
NOW's earnings are expected to grow with 21.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.36
PEG (5Y)0.28
EPS Next 2Y21.6%
EPS Next 3Y21%
5. Dividend
5.1 Amount
NOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
NYSE:NOW (12/23/2025, 9:59:08 AM)
153.13
-3.55 (-2.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.72%
Inst Owner Change-0.4%
Ins Owners0.11%
Ins Owner Change0.48%
Market Cap31.77B
Revenue(TTM)12.67B
Net Income(TTM)1.73B
Analysts82.75
Price TargetN/A
Short Float %N/A
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.64%
Min EPS beat(2)11.85%
Max EPS beat(2)13.44%
EPS beat(4)3
Avg EPS beat(4)7.15%
Min EPS beat(4)-0.99%
Max EPS beat(4)13.44%
EPS beat(8)7
Avg EPS beat(8)7.8%
EPS beat(12)11
Avg EPS beat(12)9.66%
EPS beat(16)15
Avg EPS beat(16)7.95%
Revenue beat(2)2
Avg Revenue beat(2)1.31%
Min Revenue beat(2)0.62%
Max Revenue beat(2)2%
Revenue beat(4)2
Avg Revenue beat(4)0.16%
Min Revenue beat(4)-1.1%
Max Revenue beat(4)2%
Revenue beat(8)4
Avg Revenue beat(8)0.21%
Revenue beat(12)5
Avg Revenue beat(12)0.04%
Revenue beat(16)6
Avg Revenue beat(16)-0.15%
PT rev (1m)0%
PT rev (3m)0.92%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-1.67%
EPS NY rev (1m)0.67%
EPS NY rev (3m)2.5%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.59%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.21 | ||
| Fwd PE | 7.43 | ||
| P/S | 2.51 | ||
| P/FCF | 8.14 | ||
| P/OCF | 6.56 | ||
| P/B | 2.81 | ||
| P/tB | 3.5 | ||
| EV/EBITDA | 10.64 |
EPS(TTM)16.62
EY10.85%
EPS(NY)20.6
Fwd EY13.45%
FCF(TTM)18.82
FCFY12.29%
OCF(TTM)23.33
OCFY15.24%
SpS61.05
BVpS54.47
TBVpS43.81
PEG (NY)0.36
PEG (5Y)0.28
Graham Number142.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.94% | ||
| ROE | 15.32% | ||
| ROCE | 12.61% | ||
| ROIC | 10.34% | ||
| ROICexc | 16.91% | ||
| ROICexgc | 22.84% | ||
| OM | 13.85% | ||
| PM (TTM) | 13.67% | ||
| GM | 78.05% | ||
| FCFM | 30.83% |
ROA(3y)6.46%
ROA(5y)4.58%
ROE(3y)14.66%
ROE(5y)10.88%
ROIC(3y)6.51%
ROIC(5y)5.28%
ROICexc(3y)13.22%
ROICexc(5y)11.32%
ROICexgc(3y)18.4%
ROICexgc(5y)16.07%
ROCE(3y)7.94%
ROCE(5y)6.44%
ROICexgc growth 3Y18.02%
ROICexgc growth 5Y53.98%
ROICexc growth 3Y29.2%
ROICexc growth 5Y52.18%
OM growth 3Y41.76%
OM growth 5Y59.12%
PM growth 3Y49.27%
PM growth 5Y-6.45%
GM growth 3Y0.91%
GM growth 5Y0.57%
F-Score7
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.38 | ||
| Debt/EBITDA | 0.61 | ||
| Cap/Depr | 137.65% | ||
| Cap/Sales | 7.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 198.81% | ||
| Profit Quality | 225.59% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | N/A |
F-Score7
WACC10.84%
ROIC/WACC0.95
Cap/Depr(3y)136.22%
Cap/Depr(5y)124.36%
Cap/Sales(3y)7.82%
Cap/Sales(5y)7.96%
Profit Quality(3y)353.89%
Profit Quality(5y)596.69%
High Growth Momentum
Growth
EPS 1Y (TTM)24.31%
EPS 3Y32.78%
EPS 5Y33.14%
EPS Q2Q%29.57%
EPS Next Y25.64%
EPS Next 2Y21.6%
EPS Next 3Y21%
EPS Next 5Y18.48%
Revenue 1Y (TTM)21.05%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%21.81%
Revenue Next Year20.53%
Revenue Next 2Y19.43%
Revenue Next 3Y19.11%
Revenue Next 5Y18.38%
EBIT growth 1Y39.29%
EBIT growth 3Y74.43%
EBIT growth 5Y100.47%
EBIT Next Year50.54%
EBIT Next 3Y29.86%
EBIT Next 5Y23.66%
FCF growth 1Y64.21%
FCF growth 3Y23.49%
FCF growth 5Y30.31%
OCF growth 1Y63.82%
OCF growth 3Y24.88%
OCF growth 5Y28.12%
SERVICENOW INC / NOW FAQ
What is the ChartMill fundamental rating of SERVICENOW INC (NOW) stock?
ChartMill assigns a fundamental rating of 6 / 10 to NOW.
What is the valuation status for NOW stock?
ChartMill assigns a valuation rating of 9 / 10 to SERVICENOW INC (NOW). This can be considered as Undervalued.
How profitable is SERVICENOW INC (NOW) stock?
SERVICENOW INC (NOW) has a profitability rating of 8 / 10.
What are the PE and PB ratios of SERVICENOW INC (NOW) stock?
The Price/Earnings (PE) ratio for SERVICENOW INC (NOW) is 9.21 and the Price/Book (PB) ratio is 2.81.