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SERVICENOW INC (NOW) Stock Fundamental Analysis

USA - NYSE:NOW - US81762P1021 - Common Stock

888.71 USD
-29.24 (-3.19%)
Last: 10/10/2025, 8:47:24 PM
902.67 USD
+13.96 (+1.57%)
Pre-Market: 10/13/2025, 7:33:48 AM
Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to NOW. NOW was compared to 282 industry peers in the Software industry. While NOW has a great profitability rating, there are some minor concerns on its financial health. NOW shows excellent growth, but is valued quite expensive already.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year NOW was profitable.
In the past year NOW had a positive cash flow from operations.
In the past 5 years NOW has always been profitable.
NOW had a positive operating cash flow in each of the past 5 years.
NOW Yearly Net Income VS EBIT VS OCF VS FCFNOW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B 2B 3B 4B

1.2 Ratios

With an excellent Return On Assets value of 7.53%, NOW belongs to the best of the industry, outperforming 80.50% of the companies in the same industry.
The Return On Equity of NOW (15.19%) is better than 82.98% of its industry peers.
NOW's Return On Invested Capital of 9.68% is amongst the best of the industry. NOW outperforms 83.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NOW is significantly below the industry average of 11.88%.
The 3 year average ROIC (6.51%) for NOW is below the current ROIC(9.68%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 7.53%
ROE 15.19%
ROIC 9.68%
ROA(3y)6.46%
ROA(5y)4.58%
ROE(3y)14.66%
ROE(5y)10.88%
ROIC(3y)6.51%
ROIC(5y)5.28%
NOW Yearly ROA, ROE, ROICNOW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 -40 -60 -80 -100

1.3 Margins

Looking at the Profit Margin, with a value of 13.78%, NOW is in the better half of the industry, outperforming 76.60% of the companies in the same industry.
NOW's Profit Margin has declined in the last couple of years.
NOW's Operating Margin of 13.28% is fine compared to the rest of the industry. NOW outperforms 78.37% of its industry peers.
In the last couple of years the Operating Margin of NOW has grown nicely.
NOW's Gross Margin of 78.52% is fine compared to the rest of the industry. NOW outperforms 76.60% 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 RankSector Rank
OM 13.28%
PM (TTM) 13.78%
GM 78.52%
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%
NOW Yearly Profit, Operating, Gross MarginsNOW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40 60

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4

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
NOW Yearly Shares OutstandingNOW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M
NOW Yearly Total Debt VS Total AssetsNOW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

2.2 Solvency

The Debt to FCF ratio of NOW is 0.39, which is an excellent value as it means it would take NOW, only 0.39 years of fcf income to pay off all of its debts.
NOW's Debt to FCF ratio of 0.39 is fine compared to the rest of the industry. NOW outperforms 79.43% of its industry peers.
NOW has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
NOW has a Debt to Equity ratio of 0.14. This is comparable to the rest of the industry: NOW outperforms 51.77% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.14
Debt/FCF 0.39
Altman-Z N/A
ROIC/WACC0.87
WACC11.19%
NOW Yearly LT Debt VS Equity VS FCFNOW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

2.3 Liquidity

NOW has a Current Ratio of 1.09. This is a normal value and indicates that NOW is financially healthy and should not expect problems in meeting its short term obligations.
NOW's Current ratio of 1.09 is on the low side compared to the rest of the industry. NOW is outperformed by 68.09% of its industry peers.
NOW has a Quick Ratio of 1.09. This is a normal value and indicates that NOW is financially healthy and should not expect problems in meeting its short term obligations.
NOW has a worse Quick ratio (1.09) than 66.67% of its industry peers.
Industry RankSector Rank
Current Ratio 1.09
Quick Ratio 1.09
NOW Yearly Current Assets VS Current LiabilitesNOW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 23.47% over the past year.
NOW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.14% yearly.
The Revenue has grown by 21.12% in the past year. This is a very strong growth!
NOW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.99% yearly.
EPS 1Y (TTM)23.47%
EPS 3Y32.78%
EPS 5Y33.14%
EPS Q2Q%30.67%
Revenue 1Y (TTM)21.12%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%22.38%

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 18.95% on average per year.
NOW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 18.32% yearly.
EPS Next Y22.58%
EPS Next 2Y20.57%
EPS Next 3Y20.65%
EPS Next 5Y18.95%
Revenue Next Year19.88%
Revenue Next 2Y19.25%
Revenue Next 3Y19.18%
Revenue Next 5Y18.32%

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.
NOW Yearly Revenue VS EstimatesNOW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 10B 20B 30B
NOW Yearly EPS VS EstimatesNOW Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 0 10 20 30 40 50

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2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 57.26, the valuation of NOW can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as NOW.
The average S&P500 Price/Earnings ratio is at 27.02. NOW is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 43.89, 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 22.57. NOW is valued rather expensively when compared to this.
Industry RankSector Rank
PE 57.26
Fwd PE 43.89
NOW Price Earnings VS Forward Price EarningsNOW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

NOW's Enterprise Value to EBITDA is on the same level as the industry average.
NOW's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 48.58
EV/EBITDA 79.43
NOW Per share dataNOW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

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.
The decent 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 20.65% in the coming years.
PEG (NY)2.54
PEG (5Y)1.73
EPS Next 2Y20.57%
EPS Next 3Y20.65%

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0

5. Dividend

5.1 Amount

No dividends for NOW!.
Industry RankSector Rank
Dividend Yield N/A

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SERVICENOW INC

NYSE:NOW (10/10/2025, 8:47:24 PM)

Premarket: 902.67 +13.96 (+1.57%)

888.71

-29.24 (-3.19%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)07-23 2025-07-23/amc
Earnings (Next)10-29 2025-10-29/amc
Inst Owners90.68%
Inst Owner Change-0.06%
Ins Owners0.13%
Ins Owner Change0.3%
Market Cap184.85B
Analysts83.53
Price Target1174.01 (32.1%)
Short Float %1.45%
Short Ratio1.78
Dividend
Industry RankSector 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)8.88%
Min EPS beat(2)4.31%
Max EPS beat(2)13.44%
EPS beat(4)3
Avg EPS beat(4)5.83%
Min EPS beat(4)-0.99%
Max EPS beat(4)13.44%
EPS beat(8)7
Avg EPS beat(8)7.91%
EPS beat(12)11
Avg EPS beat(12)9.1%
EPS beat(16)15
Avg EPS beat(16)7.89%
Revenue beat(2)1
Avg Revenue beat(2)0.57%
Min Revenue beat(2)-0.87%
Max Revenue beat(2)2%
Revenue beat(4)2
Avg Revenue beat(4)0.25%
Min Revenue beat(4)-1.1%
Max Revenue beat(4)2%
Revenue beat(8)3
Avg Revenue beat(8)0.11%
Revenue beat(12)4
Avg Revenue beat(12)-0.18%
Revenue beat(16)6
Avg Revenue beat(16)-0.09%
PT rev (1m)0.45%
PT rev (3m)6.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.23%
EPS NY rev (1m)0.01%
EPS NY rev (3m)2.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.77%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.05%
Valuation
Industry RankSector Rank
PE 57.26
Fwd PE 43.89
P/S 15.33
P/FCF 48.58
P/OCF 39.34
P/B 16.91
P/tB 20.92
EV/EBITDA 79.43
EPS(TTM)15.52
EY1.75%
EPS(NY)20.25
Fwd EY2.28%
FCF(TTM)18.29
FCFY2.06%
OCF(TTM)22.59
OCFY2.54%
SpS57.97
BVpS52.56
TBVpS42.48
PEG (NY)2.54
PEG (5Y)1.73
Profitability
Industry RankSector Rank
ROA 7.53%
ROE 15.19%
ROCE 11.81%
ROIC 9.68%
ROICexc 17.68%
ROICexgc 24.64%
OM 13.28%
PM (TTM) 13.78%
GM 78.52%
FCFM 31.56%
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%
ROICexcg growth 3Y18.02%
ROICexcg 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 Turnover0.55
Health
Industry RankSector Rank
Debt/Equity 0.14
Debt/FCF 0.39
Debt/EBITDA 0.67
Cap/Depr 141.91%
Cap/Sales 7.41%
Interest Coverage 250
Cash Conversion 210.62%
Profit Quality 229.08%
Current Ratio 1.09
Quick Ratio 1.09
Altman-Z N/A
F-Score7
WACC11.19%
ROIC/WACC0.87
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)23.47%
EPS 3Y32.78%
EPS 5Y33.14%
EPS Q2Q%30.67%
EPS Next Y22.58%
EPS Next 2Y20.57%
EPS Next 3Y20.65%
EPS Next 5Y18.95%
Revenue 1Y (TTM)21.12%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%22.38%
Revenue Next Year19.88%
Revenue Next 2Y19.25%
Revenue Next 3Y19.18%
Revenue Next 5Y18.32%
EBIT growth 1Y49.21%
EBIT growth 3Y74.43%
EBIT growth 5Y100.47%
EBIT Next Year48.73%
EBIT Next 3Y29.6%
EBIT Next 5Y24.29%
FCF growth 1Y65%
FCF growth 3Y23.49%
FCF growth 5Y30.31%
OCF growth 1Y61.53%
OCF growth 3Y24.88%
OCF growth 5Y28.12%