SERVICENOW INC (NOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NOW - US81762P1021 - Common Stock
781.12 USD
+15.92 (+2.08%)
780 USD
-1.12 (-0.14%)
NOW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 280 industry peers in the Software industry. NOW has an excellent profitability rating, but there are some minor concerns on its financial health. NOW shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
NOW had positive earnings in the past year.
NOW had a positive operating cash flow in the past year.
Each year in the past 5 years NOW has been profitable.
Each year in the past 5 years NOW had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NOW (7.94%) is better than 80.71% of its industry peers.
NOW has a Return On Equity of 15.32%. This is amongst the best in the industry. NOW outperforms 83.57% of its industry peers.
With an excellent Return On Invested Capital value of 10.34%, NOW belongs to the best of the industry, outperforming 85.36% of the companies in the same industry.
NOW had an Average Return On Invested Capital over the past 3 years of 6.51%. This is below the industry average of 10.73%.
The last Return On Invested Capital (10.34%) for NOW is above the 3 year average (6.51%), which is a sign of increasing profitability.
| 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
NOW's Profit Margin of 13.67% is fine compared to the rest of the industry. NOW outperforms 76.79% of its industry peers.
In the last couple of years the Profit Margin of NOW has declined.
With an excellent Operating Margin value of 13.85%, NOW belongs to the best of the industry, outperforming 80.71% of the companies in the same industry.
NOW's Operating Margin has improved in the last couple of years.
NOW has a better Gross Margin (78.05%) than 76.07% 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.
Compared to 1 year ago, NOW has more shares outstanding
The number of shares outstanding for NOW has been increased compared to 5 years ago.
The debt/assets ratio for NOW has been reduced compared to a year ago.
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.
The Debt to FCF ratio of NOW (0.38) is better than 79.29% 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 51.07% 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
WACC10.92%
2.3 Liquidity
A Current Ratio of 1.06 indicates that NOW should not have too much problems paying its short term obligations.
NOW has a Current ratio of 1.06. This is in the lower half of the industry: NOW underperforms 70.71% of its industry peers.
A Quick Ratio of 1.06 indicates that NOW should not have too much problems paying its short term obligations.
The Quick ratio of NOW (1.06) is worse than 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
NOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.31%, 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 33.14% on average per year.
NOW shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.05%.
NOW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.99% yearly.
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
Based on estimates for the next years, NOW will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.48% on average per year.
NOW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 18.38% yearly.
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
The Price/Earnings ratio is 47.00, which means the current valuation is very expensive for NOW.
NOW's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.43, NOW is valued quite expensively.
The Price/Forward Earnings ratio is 37.92, which means the current valuation is very expensive for NOW.
The rest of the industry has a similar Price/Forward Earnings ratio as NOW.
The average S&P500 Price/Forward Earnings ratio is at 23.66. NOW is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47 | ||
| Fwd PE | 37.92 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NOW is on the same level as its industry peers.
61.79% of the companies in the same industry are more expensive than NOW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.5 | ||
| EV/EBITDA | 62.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NOW does not grow enough to justify the current Price/Earnings ratio.
NOW has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NOW's earnings are expected to grow with 21.00% in the coming years.
PEG (NY)1.83
PEG (5Y)1.42
EPS Next 2Y21.6%
EPS Next 3Y21%
5. Dividend
5.1 Amount
No dividends for NOW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
781.12
+15.92 (+2.08%)
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 Cap162.07B
Revenue(TTM)12.67B
Net Income(TTM)1.73B
Analysts82.75
Price Target1179.54 (51.01%)
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%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)0.67%
EPS NY rev (3m)2.5%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.56%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47 | ||
| Fwd PE | 37.92 | ||
| P/S | 12.79 | ||
| P/FCF | 41.5 | ||
| P/OCF | 33.48 | ||
| P/B | 14.34 | ||
| P/tB | 17.83 | ||
| EV/EBITDA | 62.49 |
EPS(TTM)16.62
EY2.13%
EPS(NY)20.6
Fwd EY2.64%
FCF(TTM)18.82
FCFY2.41%
OCF(TTM)23.33
OCFY2.99%
SpS61.05
BVpS54.47
TBVpS43.81
PEG (NY)1.83
PEG (5Y)1.42
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
WACC10.92%
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 3 / 10 to SERVICENOW INC (NOW). This can be considered as Overvalued.
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 47 and the Price/Book (PB) ratio is 14.34.