Is It Too Late To Consider Buying ServiceNow, Inc. (NYSE:NOW)?

Today we're going to take a look at the well-established ServiceNow, Inc. (NYSE:NOW). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at ServiceNow’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Our analysis indicates that NOW is potentially undervalued!

Is ServiceNow Still Cheap?

Great news for investors – ServiceNow is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $610.89, but it is currently trading at US$410 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, ServiceNow’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of ServiceNow look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. ServiceNow's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since NOW is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on NOW for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NOW. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you'd like to know more about ServiceNow as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for ServiceNow and we think they deserve your attention.

If you are no longer interested in ServiceNow, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.