SERVICENOW INC (NOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NOW - US81762P1021 - Common Stock
813.43 USD
+12.97 (+1.62%)
814.67 USD
+1.24 (+0.15%)
We assign a fundamental rating of 6 out of 10 to NOW. NOW was compared to 281 industry peers in the Software industry. NOW scores excellent on profitability, but there are some minor concerns on its financial health. NOW is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year NOW was profitable.
NOW had a positive operating cash flow in the past year.
Each year in the past 5 years NOW has been profitable.
Each year in the past 5 years NOW had a positive operating cash flow.
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 83.27% of its industry peers.
NOW's Return On Invested Capital of 10.34% is amongst the best of the industry. NOW outperforms 85.05% of its industry peers.
NOW had an Average Return On Invested Capital over the past 3 years of 6.51%. This is significantly below the industry average of 12.04%.
The last Return On Invested Capital (10.34%) for NOW is above the 3 year average (6.51%), which is a sign of increasing profitability.
| 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 has a Profit Margin of 13.67%. This is in the better half of the industry: NOW outperforms 76.16% of its industry peers.
In the last couple of years the Profit Margin of NOW has declined.
NOW has a Operating Margin of 13.85%. This is amongst the best in the industry. NOW outperforms 80.07% of its industry peers.
NOW's Operating Margin has improved in the last couple of years.
The Gross Margin of NOW (78.05%) is better than 76.16% 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.
NOW has more shares outstanding than it did 1 year ago.
NOW has more shares outstanding than it did 5 years ago.
NOW has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of NOW is 0.38, which is an excellent value as it means it would take NOW, only 0.38 years of fcf income to pay off all of its debts.
NOW's Debt to FCF ratio of 0.38 is amongst the best of the industry. NOW outperforms 80.07% 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 51.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.38 | ||
| Altman-Z | N/A |
ROIC/WACC0.94
WACC10.94%
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.
NOW has a Current ratio of 1.06. This is in the lower half of the industry: NOW underperforms 70.82% of its industry peers.
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.
With a Quick ratio value of 1.06, NOW is not doing good in the industry: 69.39% of the companies in the same industry are doing better.
| 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 24.31% 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 21.05% in the past year. This is a very strong growth!
The Revenue has been growing by 25.99% on average over the past years. This is a very strong growth!
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
The Earnings Per Share is expected to grow by 18.48% on average over the next years. This is quite good.
The Revenue is expected to grow by 18.38% on average over the next years. This is quite good.
EPS Next Y24.81%
EPS Next 2Y21.26%
EPS Next 3Y20.87%
EPS Next 5Y18.48%
Revenue Next Year20.41%
Revenue Next 2Y19.43%
Revenue Next 3Y19.2%
Revenue Next 5Y18.38%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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 48.94 indicates a quite expensive valuation of NOW.
Compared to the rest of the industry, the Price/Earnings ratio of NOW is on the same level as its industry peers.
NOW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.45.
NOW is valuated quite expensively with a Price/Forward Earnings ratio of 39.71.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NOW is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of NOW to the average of the S&P500 Index (34.46), we can say NOW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.94 | ||
| Fwd PE | 39.71 |
4.2 Price Multiples
NOW's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NOW indicates a somewhat cheap valuation: NOW is cheaper than 61.57% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.33 | ||
| EV/EBITDA | 66.77 |
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.
NOW's earnings are expected to grow with 20.87% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.97
PEG (5Y)1.48
EPS Next 2Y21.26%
EPS Next 3Y20.87%
5. Dividend
5.1 Amount
NOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
813.43
+12.97 (+1.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.68%
Inst Owner Change-75.95%
Ins Owners0.13%
Ins Owner Change0.16%
Market Cap169.19B
Revenue(TTM)12.67B
Net Income(TTM)1.73B
Analysts83.53
Price Target1186.91 (45.91%)
Short Float %1.29%
Short Ratio1.92
Dividend
| Industry Rank | Sector 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)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)1.1%
PT rev (3m)1.55%
EPS NQ rev (1m)-1.7%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)1.85%
EPS NY rev (3m)1.82%
Revenue NQ rev (1m)0.54%
Revenue NQ rev (3m)0.54%
Revenue NY rev (1m)0.44%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.94 | ||
| Fwd PE | 39.71 | ||
| P/S | 13.36 | ||
| P/FCF | 43.33 | ||
| P/OCF | 34.95 | ||
| P/B | 14.97 | ||
| P/tB | 18.61 | ||
| EV/EBITDA | 66.77 |
EPS(TTM)16.62
EY2.04%
EPS(NY)20.48
Fwd EY2.52%
FCF(TTM)18.77
FCFY2.31%
OCF(TTM)23.27
OCFY2.86%
SpS60.9
BVpS54.33
TBVpS43.7
PEG (NY)1.97
PEG (5Y)1.48
Graham Number142.54
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
WACC10.94%
ROIC/WACC0.94
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 Y24.81%
EPS Next 2Y21.26%
EPS Next 3Y20.87%
EPS Next 5Y18.48%
Revenue 1Y (TTM)21.05%
Revenue growth 3Y23.05%
Revenue growth 5Y25.99%
Sales Q2Q%21.81%
Revenue Next Year20.41%
Revenue Next 2Y19.43%
Revenue Next 3Y19.2%
Revenue Next 5Y18.38%
EBIT growth 1Y39.29%
EBIT growth 3Y74.43%
EBIT growth 5Y100.47%
EBIT Next Year48.73%
EBIT Next 3Y29.6%
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 5 / 10 to NOW.
What is the valuation status for NOW stock?
ChartMill assigns a valuation rating of 3 / 10 to SERVICENOW INC (NOW). This can be considered as Overvalued.
How profitable is SERVICENOW INC (NOW) stock?
SERVICENOW INC (NOW) has a profitability rating of 7 / 10.
What are the PE and PB ratios of SERVICENOW INC (NOW) stock?
The Price/Earnings (PE) ratio for SERVICENOW INC (NOW) is 48.94 and the Price/Book (PB) ratio is 14.97.