Should You Think About Buying ServiceNow, Inc. (NYSE:NOW) Now?

Today we're going to take a look at the well-established ServiceNow, Inc. (NYSE:NOW). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$790 at one point, and dropping to the lows of US$643. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether ServiceNow's current trading price of US$657 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ServiceNow’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for ServiceNow

Is ServiceNow Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 13% below our intrinsic value, which means if you buy ServiceNow today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $754.43, then there’s not much of an upside to gain from mispricing. What's more, ServiceNow’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will ServiceNow generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in NOW’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on NOW, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. Luckily, you can check out what analysts are forecasting by clicking here.

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.