The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$481.82||$670.16||$929.42||$1,087.42||$1,261.41|
|Source||Analyst x18||Analyst x16||Analyst x4||Extrapolated @ (17%, capped from 37.7%)||Extrapolated @ (16%, capped from 37.7%)|
Discounted (@ 9.87%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $1,261 × (1 + 2.47%) ÷ (9.87% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
$14,142 = $3,229 + $10,913
Value = Total value / Shares Outstanding ($14,142 / 171)Discount to Share Price
Value per share:
Current discount (share price of $120.81): -45.84%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 9.87% = 2.47% + (0.983 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($20,616,899,471).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.983 = 0.946 (1 + (1- 30%) (5.53%))
Levered Beta used in calculation = 0.983
Mr. John J. Donahoe, II, has been the Chief Executive Officer and President of ServiceNow, Inc. since April 3, 2017. Mr. Donahoe has over 30 years of management experience. Mr. Donahoe served as the Chief Executive Officer and President of eBay Inc. from March 31, 2008 to July 17, 2015, where he oversaw the eBay, PayPal and eBay Enterprise businesses. Mr. Donahoe served as an Interim President of Paypal at eBay Inc. from January 3, 2012 to April 2012. He joined eBay in 2005 as President of eBay Marketplaces, responsible for eBay's global e-commerce businesses. He served as an Interim President of eBay Marketplace at eBay Inc. since September 2010 and served as its President of Auction Business Unit since February 24, 2005. Prior to joining eBay, he served as the Chief Executive Officer and Worldwide Managing Director of Bain & Company, Inc. from 1999 to March 1, 2006 and served as its Managing Director from 1982 to 1999. He joined Bain & Company Inc. in 1982, served as the Head of the San Francisco office for seven years. At Bain, Mr. Donahoe oversaw its 29 offices and 3,000 employees worldwide and served clients in the telecommunications, airlines, aerospace and financial services industries. Prior to that, he worked for the Rolm Corporation and Salomon Brothers. He has been the Non-Executive Chairman and Director of PayPal Holdings, Inc. since July 17, 2015. He serves as Vice Chairman of the Advisory Council at Stanford Graduate School of Business. He has been an Independent Director of NIKE, Inc., since June 19, 2014 and Skype Global S.à r.l. (Skype S.à r.l.) since November 2009. He has been a Director of ServiceNow, Inc. since April 3, 2017. He serves as a Member of the Advisory Board and Director of eVolution Global Partners, L.L.C. He serves on the Board of Trustees at Dartmouth College and Sacred Heart Schools. He served as an Independent Director of Intel Corporation from March 2009 to May 18, 2017 and served as its Lead Independent Director from May 2016 to May 18, 2017. He served as a Director at eBay Inc. from January 2008 to July 17, 2015. He served as a Trustee of The Bridgespan Group, Inc., and other charitable organizations. He serves as a Member of the President's Export Council. Mr. Donahoe received a B.A. degree in Economics with high distinction, magna cum laude, Phi Beta Kappa from Dartmouth College and earned an M.B.A. from the Stanford University Graduate School of Business, where he was an Arjay Scholar.
Average tenure and age of the ServiceNow management team in years:
Average tenure and age of the ServiceNow board of directors in years:
ServiceNow, Inc. provides enterprise cloud computing solutions that define, structure, manage, and automate services for enterprises worldwide. The company offers service management solutions for customer support, human resources, security operations, and other enterprise departments. It operates ServiceNow platform that provides workflow, configuration management database, service catalog, service portal, knowledge management, reporting and analytics, data benchmarking, visual task boards, built-in and optional encryption capabilities, and collaboration and developer tools. The company also provides information technology (IT) solutions, such as IT service management product suite for enterprise’s employees, customers, and partners; IT operations management that connects a customer’s physical and cloud-based IT infrastructure with applications and platforms; and IT business management product suite that enables customers to manage their IT priorities. In addition, it offers customer service management product for customer service cases and requests; HR service management product; and security operation management product for security operations management requirements of third-party. Further, the company provides professional services, training services and certification programs, and customer support services. It serves enterprises in various industries, including financial services, consumer products, IT services, healthcare, and technology. The company sells products through its direct sales team, as well as indirectly through third-party channels by partnering with systems integrators, managed services providers, and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California with additional offices in North America, South America, Europe, and Asia.
2225 Lawson Lane,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|NYSE||NOW||Common Stock||New York Stock Exchange||US||USD||29. Jun 2012|
|DB||4S0||Common Stock||Deutsche Boerse AG||DE||EUR||29. Jun 2012|
|Sector:||Software and Services|