SERVICENOW INC (NOW)
US81762P1021 - Common Stock
NOW gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 276 industry peers in the Software industry. NOW has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. NOW is not overvalued while it is showing excellent growth. This is an interesting combination. This makes NOW very considerable for growth and quality 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.
NOW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.96%, NOW belongs to the best of the industry, outperforming 91.24% of the companies in the same industry.
NOW's Return On Equity of 22.69% is amongst the best of the industry. NOW outperforms 92.70% of its industry peers.
NOW has a Return On Invested Capital of 6.19%. This is amongst the best in the industry. NOW outperforms 83.21% 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 10.12%.
The last Return On Invested Capital (6.19%) for NOW is above the 3 year average (4.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.96% | ||
| ROE | 22.69% | ||
| ROIC | 6.19% |
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
NOW's Profit Margin of 19.30% is amongst the best of the industry. NOW outperforms 89.42% of its industry peers.
In the last couple of years the Profit Margin of NOW has grown nicely.
NOW's Operating Margin of 8.49% is amongst the best of the industry. NOW outperforms 80.66% of its industry peers.
NOW's Operating Margin has improved in the last couple of years.
NOW has a better Gross Margin (78.59%) than 79.20% 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 | 8.49% | ||
| PM (TTM) | 19.3% | ||
| GM | 78.59% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NOW is destroying value.
NOW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, NOW has more shares outstanding
Compared to 1 year ago, NOW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 9.90 indicates that NOW is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.90, NOW belongs to the top of the industry, outperforming 87.59% of the companies in the same industry.
NOW has a debt to FCF ratio of 0.55. This is a very positive value and a sign of high solvency as it would only need 0.55 years to pay back of all of its debts.
NOW has a better Debt to FCF ratio (0.55) than 80.29% of its industry peers.
A Debt/Equity ratio of 0.20 indicates that NOW is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.20, NOW is in line with its industry, outperforming 47.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 0.55 | ||
| Altman-Z | 9.9 |
ROIC/WACC0.62
WACC9.96%
2.3 Liquidity
A Current Ratio of 1.06 indicates that NOW should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.06, NOW is doing worse than 75.18% of the companies in the same industry.
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 74.09% of its industry peers.
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 | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 41.90% 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
NOW shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.82%.
Measured over the past years, NOW shows a very strong growth in Revenue. The Revenue has been growing by 28.02% on average per year.
EPS 1Y (TTM)41.9%
EPS 3Y32.21%
EPS 5Y33.92%
EPS growth Q2Q36.4%
Revenue 1Y (TTM)23.82%
Revenue growth 3Y25.68%
Revenue growth 5Y28.02%
Revenue growth Q2Q25.62%
3.2 Future
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.
EPS Next Y24.09%
EPS Next 2Y22.47%
EPS Next 3Y22.67%
EPS Next 5Y19.24%
Revenue Next Year21.89%
Revenue Next 2Y21.3%
Revenue Next 3Y21.21%
Revenue Next 5Y20.56%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 66.50 indicates a quite expensive valuation of NOW.
NOW's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of NOW to the average of the S&P500 Index (25.20), we can say NOW is valued expensively.
The Price/Forward Earnings ratio is 53.59, which means the current valuation is very expensive for NOW.
The rest of the industry has a similar Price/Forward Earnings ratio as NOW.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.63, NOW is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.5 | ||
| Fwd PE | 53.59 |
4.2 Price Multiples
NOW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NOW is cheaper than 63.50% of the companies in the same industry.
60.22% 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 | 54.4 | ||
| EV/EBITDA | 106.29 |
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 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 22.67% in the coming years.
PEG (NY)2.76
PEG (5Y)1.96
EPS Next 2Y22.47%
EPS Next 3Y22.67%
5. Dividend
5.1 Amount
No dividends for NOW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SERVICENOW INC
NYSE:NOW (4/25/2024, 7:08:00 PM)
After market: 721.5 +5.25 (+0.73%)716.25
-30.04 (-4.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap147.10B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Div Incr Years
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.5 | ||
| Fwd PE | 53.59 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.76
PEG (5Y)1.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.96% | ||
| ROE | 22.69% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.49% | ||
| PM (TTM) | 19.3% | ||
| GM | 78.59% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)41.9%
EPS 3Y32.21%
EPS 5Y
EPS growth Q2Q
EPS Next Y24.09%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)23.82%
Revenue growth 3Y25.68%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
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