SERVICENOW INC (NOW) Stock Fundamental Analysis
NYSE:NOW - New York Stock Exchange, Inc. - US81762P1021 - Common Stock
Taking everything into account, NOW scores 6 out of 10 in our fundamental rating. NOW was compared to 285 industry peers in the Software industry. While NOW has a great profitability rating, there are some minor concerns on its financial health. NOW is valued quite expensively, but it does show have an excellent growth rating. This makes NOW very considerable for growth investing!
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.
NOW had positive earnings in each of the past 5 years.
Each year in the past 5 years NOW had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.25%, NOW belongs to the best of the industry, outperforming 81.00% of the companies in the same industry.
With an excellent Return On Equity value of 14.38%, NOW belongs to the best of the industry, outperforming 83.51% of the companies in the same industry.
With an excellent Return On Invested Capital value of 8.81%, NOW belongs to the best of the industry, outperforming 84.23% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NOW is significantly below the industry average of 12.12%.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.25% | ||
| ROE | 14.38% | ||
| ROIC | 8.81% |
ROA(3y)4.84%
ROA(5y)5.26%
ROE(3y)11.79%
ROE(5y)13.8%
ROIC(3y)4.58%
ROIC(5y)3.61%
1.3 Margins
The Profit Margin of NOW (12.77%) is better than 79.93% 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.
In the last couple of years the Operating Margin of NOW has grown nicely.
NOW's Gross Margin of 79.24% is fine compared to the rest of the industry. NOW outperforms 77.06% of its industry peers.
NOW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.04% | ||
| PM (TTM) | 12.77% | ||
| GM | 79.24% |
OM growth 3Y24.53%
OM growth 5YN/A
PM growth 3Y94.51%
PM growth 5YN/A
GM growth 3Y0.18%
GM growth 5Y0.64%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
NOW has a better debt/assets ratio than last year.
2.2 Solvency
NOW has an Altman-Z score of 15.57. This indicates that NOW is financially healthy and has little risk of bankruptcy at the moment.
NOW's Altman-Z score of 15.57 is amongst the best of the industry. NOW outperforms 90.32% of its industry peers.
The Debt to FCF ratio of NOW is 0.44, which is an excellent value as it means it would take NOW, only 0.44 years of fcf income to pay off 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 76.34% of the companies in the same industry.
NOW has a Debt/Equity ratio of 0.16. This is a healthy value indicating a solid balance between debt and equity.
NOW has a Debt to Equity ratio of 0.16. This is comparable to the rest of the industry: NOW outperforms 46.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 0.44 | ||
| Altman-Z | 15.57 |
ROIC/WACC0.79
WACC11.15%
2.3 Liquidity
A Current Ratio of 1.13 indicates that NOW should not have too much problems paying its short term obligations.
The Current ratio of NOW (1.13) is worse than 69.53% of its industry peers.
NOW has a Quick Ratio of 1.13. This is a normal value and indicates that NOW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.13, NOW is doing worse than 69.18% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 34.51% over the past year.
The Earnings Per Share has been growing by 33.92% on average over the past years. This is a very strong growth
Looking at the last year, NOW shows a very strong growth in Revenue. 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.
EPS 1Y (TTM)34.51%
EPS 3Y32.21%
EPS 5Y33.92%
EPS Q2Q%27.4%
Revenue 1Y (TTM)23.48%
Revenue growth 3Y25.68%
Revenue growth 5Y28.02%
Sales Q2Q%22.25%
3.2 Future
Based on estimates for the next years, NOW will show a very strong growth in Earnings Per Share. The EPS will grow by 22.11% on average per year.
The Revenue is expected to grow by 20.13% on average over the next years. This is a very strong growth
EPS Next Y30.53%
EPS Next 2Y25.11%
EPS Next 3Y24.06%
EPS Next 5Y22.11%
Revenue Next Year22.93%
Revenue Next 2Y21.72%
Revenue Next 3Y21.22%
Revenue Next 5Y20.13%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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 82.04, NOW can be considered very expensive at the moment.
NOW's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of NOW to the average of the S&P500 Index (28.29), we can say NOW is valued expensively.
The Price/Forward Earnings ratio is 65.06, which means the current valuation is very expensive for NOW.
NOW's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 24.44. NOW is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 82.04 | ||
| Fwd PE | 65.06 |
4.2 Price Multiples
NOW's Enterprise Value to EBITDA ratio is in line with the industry average.
NOW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 67.51 | ||
| EV/EBITDA | 117.06 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of NOW may justify a higher PE ratio.
A more expensive valuation may be justified as NOW's earnings are expected to grow with 24.06% in the coming years.
PEG (NY)2.69
PEG (5Y)2.42
EPS Next 2Y25.11%
EPS Next 3Y24.06%
5. Dividend
5.1 Amount
NOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SERVICENOW INC
NYSE:NOW (1/21/2025, 6:40:01 PM)
After market: 1096.85 0 (0%)1096.85
+25.37 (+2.37%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.66%
Inst Owner Change-0.4%
Ins Owners0.18%
Ins Owner Change-1.17%
Market Cap225.95B
Analysts81.67
Price Target1093.99 (-0.26%)
Short Float %1.75%
Short Ratio3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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)7.84%
Min EPS beat(2)6.57%
Max EPS beat(2)9.1%
EPS beat(4)4
Avg EPS beat(4)8.44%
Min EPS beat(4)6.57%
Max EPS beat(4)10.52%
EPS beat(8)8
Avg EPS beat(8)10.91%
EPS beat(12)12
Avg EPS beat(12)8.22%
EPS beat(16)16
Avg EPS beat(16)9.15%
Revenue beat(2)1
Avg Revenue beat(2)0.37%
Min Revenue beat(2)-0.23%
Max Revenue beat(2)0.97%
Revenue beat(4)2
Avg Revenue beat(4)0.26%
Min Revenue beat(4)-0.31%
Max Revenue beat(4)0.97%
Revenue beat(8)3
Avg Revenue beat(8)-0.03%
Revenue beat(12)4
Avg Revenue beat(12)-0.26%
Revenue beat(16)8
Avg Revenue beat(16)0.25%
PT rev (1m)5.78%
PT rev (3m)22.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.95%
EPS NY rev (1m)0%
EPS NY rev (3m)0.95%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.95%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 82.04 | ||
| Fwd PE | 65.06 | ||
| P/S | 21.59 | ||
| P/FCF | 67.51 | ||
| P/OCF | 53.33 | ||
| P/B | 24.32 | ||
| P/tB | 29.02 | ||
| EV/EBITDA | 117.06 |
EPS(TTM)13.37
EY1.22%
EPS(NY)16.86
Fwd EY1.54%
FCF(TTM)16.25
FCFY1.48%
OCF(TTM)20.57
OCFY1.88%
SpS50.8
BVpS45.1
TBVpS37.79
PEG (NY)2.69
PEG (5Y)2.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.25% | ||
| ROE | 14.38% | ||
| ROCE | 10.82% | ||
| ROIC | 8.81% | ||
| ROICexc | 16.15% | ||
| ROICexgc | 21.17% | ||
| OM | 12.04% | ||
| PM (TTM) | 12.77% | ||
| GM | 79.24% | ||
| FCFM | 31.99% |
ROA(3y)4.84%
ROA(5y)5.26%
ROE(3y)11.79%
ROE(5y)13.8%
ROIC(3y)4.58%
ROIC(5y)3.61%
ROICexc(3y)9.96%
ROICexc(5y)8.13%
ROICexgc(3y)15.24%
ROICexgc(5y)11.85%
ROCE(3y)5.62%
ROCE(5y)4.43%
ROICexcg growth 3Y15.73%
ROICexcg growth 5YN/A
ROICexc growth 3Y12%
ROICexc growth 5YN/A
OM growth 3Y24.53%
OM growth 5YN/A
PM growth 3Y94.51%
PM growth 5YN/A
GM growth 3Y0.18%
GM growth 5Y0.64%
F-Score8
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 0.44 | ||
| Debt/EBITDA | 0.82 | ||
| Cap/Depr | 157.8% | ||
| Cap/Sales | 8.51% | ||
| Interest Coverage | 54.78 | ||
| Cash Conversion | 232.29% | ||
| Profit Quality | 250.52% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 15.57 |
F-Score8
WACC11.15%
ROIC/WACC0.79
Cap/Depr(3y)111.68%
Cap/Depr(5y)119.51%
Cap/Sales(3y)7.36%
Cap/Sales(5y)8.28%
Profit Quality(3y)534.65%
Profit Quality(5y)578%
High Growth Momentum
Growth
EPS 1Y (TTM)34.51%
EPS 3Y32.21%
EPS 5Y33.92%
EPS Q2Q%27.4%
EPS Next Y30.53%
EPS Next 2Y25.11%
EPS Next 3Y24.06%
EPS Next 5Y22.11%
Revenue 1Y (TTM)23.48%
Revenue growth 3Y25.68%
Revenue growth 5Y28.02%
Sales Q2Q%22.25%
Revenue Next Year22.93%
Revenue Next 2Y21.72%
Revenue Next 3Y21.22%
Revenue Next 5Y20.13%
EBIT growth 1Y94.75%
EBIT growth 3Y56.5%
EBIT growth 5YN/A
EBIT Next Year52.34%
EBIT Next 3Y33.62%
EBIT Next 5Y28.81%
FCF growth 1Y76.9%
FCF growth 3Y25.93%
FCF growth 5Y36.91%
OCF growth 1Y76.17%
OCF growth 3Y23.9%
OCF growth 5Y33.18%