Stock Analysis

Have Insiders Sold ServiceNow, Inc. (NYSE:NOW) Shares Recently?

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NYSE:NOW
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We wouldn't blame ServiceNow, Inc. (NYSE:NOW) shareholders if they were a little worried about the fact that Chirantan Desai, the Chief Operating Officer recently netted about US$3.3m selling shares at an average price of US$478. That sale reduced their total holding by 15% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At ServiceNow

In fact, the recent sale by Chirantan Desai was the biggest sale of ServiceNow shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of US$492. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 15%of Chirantan Desai's holding.

Over the last year we saw more insider selling of ServiceNow shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:NOW Insider Trading Volume June 5th 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that ServiceNow insiders own 0.3% of the company, worth about US$247m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About ServiceNow Insiders?

Insiders haven't bought ServiceNow stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that ServiceNow is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 1 warning sign with ServiceNow and understanding it should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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About NYSE:NOW

ServiceNow

ServiceNow, Inc. provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth5
Past Performance2
Financial Health6
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Flawless balance sheet with high growth potential.