Is NYSE:NOW on the Verge of a Major Breakout as a Strong Growth Stock?

Last update: Oct 13, 2023

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if SERVICENOW INC (NYSE:NOW) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted SERVICENOW INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Growth Assessment of NYSE:NOW

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:NOW has received a 9 out of 10:

NOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 41.19%, which is quite impressive.
The Earnings Per Share has been growing by 44.86% 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 21.47%.
The Revenue has been growing by 30.44% 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 22.74% yearly.
NOW is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.69% yearly.

A Closer Look at Health for 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:

NOW has an Altman-Z score of 9.43. This indicates that NOW is financially healthy and has little risk of bankruptcy at the moment.
NOW has a Altman-Z score of 9.43. This is amongst the best in the industry. NOW outperforms 89.32% of its industry peers.
NOW has a debt to FCF ratio of 0.64. This is a very positive value and a sign of high solvency as it would only need 0.64 years to pay back of all of its debts.
NOW has a Debt to FCF ratio of 0.64. This is amongst the best in the industry. NOW outperforms 80.07% of its industry peers.
NOW has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.

Assessing Profitability for NYSE:NOW

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:NOW, the assigned 7 is a significant indicator of profitability:

NOW has a Return On Assets of 9.54%. This is amongst the best in the industry. NOW outperforms 92.88% of its industry peers.
NOW has a Return On Equity of 20.56%. This is amongst the best in the industry. NOW outperforms 92.53% of its industry peers.
NOW's Return On Invested Capital of 4.81% is amongst the best of the industry. NOW outperforms 82.21% of its industry peers.
The 3 year average ROIC (3.84%) for NOW is below the current ROIC(4.81%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 17.76%, NOW belongs to the top of the industry, outperforming 92.17% of the companies in the same industry.
NOW has a Operating Margin of 6.32%. This is in the better half of the industry: NOW outperforms 78.29% of its industry peers.
In the last couple of years the Operating Margin of NOW has grown nicely.
Looking at the Gross Margin, with a value of 78.50%, NOW is in the better half of the industry, outperforming 79.00% of the companies in the same industry.

Why is NYSE:NOW a setup?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:NOW currently has a 8 as setup rating:

Although the technical rating is only medium, NOW does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 583.72. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 558.20, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of NOW

Our latest full technical report of NOW contains the most current technical analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. 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.