NYSE:NOW—Positioned as a High-Growth Stock, Ready for a Potential Breakout.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether SERVICENOW INC (NYSE:NOW) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but SERVICENOW INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

What does the Growth looks like for NYSE:NOW

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:NOW, the assigned 9 reflects its growth potential:

• The Earnings Per Share has grown by an impressive 41.90% over the past year.
• Measured over the past years, NOW shows a very strong growth in Earnings Per Share. The EPS has been growing by 33.92% on average per year.
• Looking at the last year, NOW shows a very strong growth in Revenue. The Revenue has grown by 23.82%.
• NOW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.02% yearly.
• The Earnings Per Share is expected to grow by 19.24% on average over the next years. This is quite good.
• Based on estimates for the next years, NOW will show a very strong growth in Revenue. The Revenue will grow by 20.56% on average per year.

A Closer Look at Health for NYSE:NOW

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:NOW, the assigned 7 reflects its health status:

• An Altman-Z score of 10.40 indicates that NOW is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 10.40, NOW belongs to the top of the industry, outperforming 88.53% of the companies in the same industry.
• The Debt to FCF ratio of NOW is 0.55, which is an excellent value as it means it would take NOW, only 0.55 years of fcf income to pay off all of its debts.
• NOW's Debt to FCF ratio of 0.55 is amongst the best of the industry. NOW outperforms 82.08% of its industry peers.
• A Debt/Equity ratio of 0.20 indicates that NOW is not too dependend on debt financing.
• 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.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:NOW was assigned a score of 8 for profitability:

• NOW has a better Return On Assets (9.96%) than 92.11% of its industry peers.
• NOW's Return On Equity of 22.69% is amongst the best of the industry. NOW outperforms 93.19% of its industry peers.
• With an excellent Return On Invested Capital value of 6.19%, NOW belongs to the best of the industry, outperforming 82.08% of the companies in the same industry.
• The 3 year average ROIC (4.58%) for NOW is below the current ROIC(6.19%), indicating increased profibility in the last year.
• NOW has a better Profit Margin (19.30%) than 90.32% of its industry peers.
• In the last couple of years the Profit Margin of NOW has grown nicely.
• Looking at the Operating Margin, with a value of 8.49%, NOW is in the better half of the industry, outperforming 79.21% of the companies in the same industry.
• NOW's Operating Margin has improved in the last couple of years.
• NOW's Gross Margin of 78.59% is fine compared to the rest of the industry. NOW outperforms 78.49% of its industry peers.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:NOW has a 7 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, NOW also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a support zone below the current price at 743.90, 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.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.