SERVICENOW INC (NOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NOW - US81762P1021 - Common Stock
147.45 USD
-5.74 (-3.75%)
147.6 USD
+0.15 (+0.1%)
NOW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 276 industry peers in the Software industry. While NOW has a great profitability rating, there are some minor concerns on its financial health. NOW is not priced too expensively while it is growing strongly. Keep and eye on this one!
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.
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
Looking at the Return On Assets, with a value of 7.94%, NOW belongs to the top of the industry, outperforming 80.07% of the companies in the same industry.
NOW has a Return On Equity of 15.32%. This is amongst the best in the industry. NOW outperforms 82.61% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.34%, NOW belongs to the top of the industry, outperforming 85.51% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NOW is below the industry average of 10.78%.
The 3 year average ROIC (6.51%) for NOW is below the current ROIC(10.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.94% | ||
| ROE | 15.32% | ||
| ROIC | 10.34% |
ROA(3y)6.46%
ROA(5y)4.58%
ROE(3y)14.66%
ROE(5y)10.88%
ROIC(3y)6.51%
ROIC(5y)5.28%
1.3 Margins
NOW's Profit Margin of 13.67% is fine compared to the rest of the industry. NOW outperforms 75.36% of its industry peers.
In the last couple of years the Profit Margin of NOW has declined.
The Operating Margin of NOW (13.85%) is better than 80.43% of its industry peers.
NOW's Operating Margin has improved in the last couple of years.
NOW's Gross Margin of 78.05% is fine compared to the rest of the industry. NOW outperforms 75.72% 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 | 13.85% | ||
| PM (TTM) | 13.67% | ||
| GM | 78.05% |
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%
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
NOW has more shares outstanding than it did 5 years ago.
The debt/assets ratio for NOW has been reduced compared to a year ago.
2.2 Solvency
NOW has a debt to FCF ratio of 0.38. This is a very positive value and a sign of high solvency as it would only need 0.38 years to pay back of all of its debts.
NOW has a Debt to FCF ratio of 0.38. This is in the better half of the industry: NOW outperforms 79.35% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that NOW is not too dependend on debt financing.
NOW has a Debt to Equity ratio of 0.13. This is comparable to the rest of the industry: NOW outperforms 50.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.38 | ||
| Altman-Z | N/A |
ROIC/WACC0.95
WACC10.9%
2.3 Liquidity
NOW has a Current Ratio of 1.06. 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 Current ratio, with a value of 1.06, NOW is doing worse than 71.74% of the companies in the same industry.
NOW has a Quick Ratio of 1.06. 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 (1.06) than 71.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
NOW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.31%, which is quite impressive.
The Earnings Per Share has been growing by 33.14% 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 21.05%.
Measured over the past years, NOW shows a very strong growth in Revenue. The Revenue has been growing by 25.99% on average per year.
EPS 1Y (TTM)24.31%
EPS 3Y32.78%
EPS 5Y33.14%
EPS Q2Q%29.57%
Revenue 1Y (TTM)21.05%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%21.81%
3.2 Future
NOW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 63.46% yearly.
The Revenue is expected to grow by 18.38% on average over the next years. This is quite good.
EPS Next Y29.2%
EPS Next 2Y21.68%
EPS Next 3Y20.96%
EPS Next 5Y63.46%
Revenue Next Year20.57%
Revenue Next 2Y19.49%
Revenue Next 3Y19.17%
Revenue Next 5Y18.38%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
NOW is valuated quite expensively with a Price/Earnings ratio of 44.41.
The rest of the industry has a similar Price/Earnings ratio as NOW.
NOW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.60.
Based on the Price/Forward Earnings ratio of 35.75, the valuation of NOW can be described as expensive.
NOW's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of NOW to the average of the S&P500 Index (23.23), we can say NOW is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.41 | ||
| Fwd PE | 35.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOW is valued cheaply inside the industry as 88.41% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NOW is valued cheaper than 94.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.83 | ||
| EV/EBITDA | 9.85 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
NOW has an outstanding profitability rating, which may justify a higher PE ratio.
NOW's earnings are expected to grow with 20.96% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.52
PEG (5Y)1.34
EPS Next 2Y21.68%
EPS Next 3Y20.96%
5. Dividend
5.1 Amount
No dividends for NOW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
147.45
-5.74 (-3.75%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.36%
Inst Owner Change0%
Ins Owners0.11%
Ins Owner Change0.51%
Market Cap30.59B
Revenue(TTM)12.67B
Net Income(TTM)1.73B
Analysts82.75
Price Target231.78 (57.19%)
Short Float %N/A
Short Ratio1.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)12.64%
Min EPS beat(2)11.85%
Max EPS beat(2)13.44%
EPS beat(4)3
Avg EPS beat(4)7.15%
Min EPS beat(4)-0.99%
Max EPS beat(4)13.44%
EPS beat(8)7
Avg EPS beat(8)7.8%
EPS beat(12)11
Avg EPS beat(12)9.66%
EPS beat(16)15
Avg EPS beat(16)7.95%
Revenue beat(2)2
Avg Revenue beat(2)1.31%
Min Revenue beat(2)0.62%
Max Revenue beat(2)2%
Revenue beat(4)2
Avg Revenue beat(4)0.16%
Min Revenue beat(4)-1.1%
Max Revenue beat(4)2%
Revenue beat(8)4
Avg Revenue beat(8)0.21%
Revenue beat(12)5
Avg Revenue beat(12)0.04%
Revenue beat(16)6
Avg Revenue beat(16)-0.15%
PT rev (1m)-80.47%
PT rev (3m)-80.26%
EPS NQ rev (1m)-80%
EPS NQ rev (3m)-80.34%
EPS NY rev (1m)-79.43%
EPS NY rev (3m)-78.92%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.59%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.41 | ||
| Fwd PE | 35.75 | ||
| P/S | 2.42 | ||
| P/FCF | 7.83 | ||
| P/OCF | 6.32 | ||
| P/B | 2.71 | ||
| P/tB | 3.37 | ||
| EV/EBITDA | 9.85 |
EPS(TTM)3.32
EY2.25%
EPS(NY)4.12
Fwd EY2.8%
FCF(TTM)18.82
FCFY12.76%
OCF(TTM)23.33
OCFY15.82%
SpS61.05
BVpS54.47
TBVpS43.81
PEG (NY)1.52
PEG (5Y)1.34
Graham Number63.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.94% | ||
| ROE | 15.32% | ||
| ROCE | 12.61% | ||
| ROIC | 10.34% | ||
| ROICexc | 16.91% | ||
| ROICexgc | 22.84% | ||
| OM | 13.85% | ||
| PM (TTM) | 13.67% | ||
| GM | 78.05% | ||
| FCFM | 30.83% |
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%
ROICexgc growth 3Y18.02%
ROICexgc 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 Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.38 | ||
| Debt/EBITDA | 0.61 | ||
| Cap/Depr | 137.65% | ||
| Cap/Sales | 7.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 198.81% | ||
| Profit Quality | 225.59% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | N/A |
F-Score7
WACC10.9%
ROIC/WACC0.95
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)24.31%
EPS 3Y32.78%
EPS 5Y33.14%
EPS Q2Q%29.57%
EPS Next Y29.2%
EPS Next 2Y21.68%
EPS Next 3Y20.96%
EPS Next 5Y63.46%
Revenue 1Y (TTM)21.05%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%21.81%
Revenue Next Year20.57%
Revenue Next 2Y19.49%
Revenue Next 3Y19.17%
Revenue Next 5Y18.38%
EBIT growth 1Y39.29%
EBIT growth 3Y74.43%
EBIT growth 5Y100.47%
EBIT Next Year50.19%
EBIT Next 3Y29.86%
EBIT Next 5Y23.66%
FCF growth 1Y64.21%
FCF growth 3Y23.49%
FCF growth 5Y30.31%
OCF growth 1Y63.82%
OCF growth 3Y24.88%
OCF growth 5Y28.12%
SERVICENOW INC / NOW FAQ
What is the ChartMill fundamental rating of SERVICENOW INC (NOW) stock?
ChartMill assigns a fundamental rating of 6 / 10 to NOW.
What is the valuation status of SERVICENOW INC (NOW) stock?
ChartMill assigns a valuation rating of 5 / 10 to SERVICENOW INC (NOW). This can be considered as Fairly Valued.
How profitable is SERVICENOW INC (NOW) stock?
SERVICENOW INC (NOW) has a profitability rating of 8 / 10.
How financially healthy is SERVICENOW INC?
The financial health rating of SERVICENOW INC (NOW) is 4 / 10.
What is the expected EPS growth for SERVICENOW INC (NOW) stock?
The Earnings per Share (EPS) of SERVICENOW INC (NOW) is expected to grow by 29.2% in the next year.