ServiceNow, Inc.

NEOE:NOWS Stock Report

Market Cap: CA$305.9b

ServiceNow Valuation

Is NOWS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of NOWS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NOWS (CA$28.15) is trading above our estimate of fair value (CA$23.71)

Significantly Below Fair Value: NOWS is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NOWS?

Key metric: As NOWS is barely profitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for NOWS. This is calculated by dividing NOWS's market cap by their current revenue.
What is NOWS's PS Ratio?
PS Ratio20.9x
SalesUS$10.46b
Market CapUS$218.82b

Price to Sales Ratio vs Peers

How does NOWS's PS Ratio compare to its peers?

The above table shows the PS ratio for NOWS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average7.1x
CSU Constellation Software
7.2x16.0%CA$97.2b
BB BlackBerry
2.2x21.7%CA$1.9b
TCS Tecsys
3.8x10.2%CA$654.7m
PANW Palo Alto Networks
15.2x13.3%US$125.8b
NOWS ServiceNow
20.9x16.7%CA$218.8b

Price-To-Sales vs Peers: NOWS is expensive based on its Price-To-Sales Ratio (20.9x) compared to the peer average (7.1x).

Price to Sales Ratio vs Industry

How does NOWS's PS Ratio compare vs other companies in the CA Software Industry?

27 CompaniesPrice / SalesEstimated GrowthMarket Cap
QUIS Quisitive Technology Solutions
0.6x6.2%US$71.45m
BTCW Bitcoin Well
0.6xn/aUS$31.20m
NOW NowVertical Group
0.5x5.3%US$21.85m
PLUR Plurilock Security
0.4xn/aUS$19.50m
NOWS 20.9xIndustry Avg. 3.6xNo. of Companies27PS02.85.68.411.214+
27 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: NOWS is expensive based on its Price-To-Sales Ratio (20.9x) compared to the Canadian Software industry average (3.6x).

Price to Sales Ratio vs Fair Ratio

What is NOWS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NOWS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio20.9x
Fair PS Ratio32.4x

Price-To-Sales vs Fair Ratio: NOWS is good value based on its Price-To-Sales Ratio (20.9x) compared to the estimated Fair Price-To-Sales Ratio (32.4x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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