What Is ServiceNow, Inc.'s (NYSE:NOW) Share Price Doing?

ServiceNow, Inc. (NYSE:NOW) saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is inching closer to its yearly highs following the recent share price climb. 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 examine ServiceNow’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for ServiceNow

What's The Opportunity In ServiceNow?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 19% 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 $951.74, 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 does the future of ServiceNow look like?

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. However, with a relatively muted profit growth of 6.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for ServiceNow, at least in the short term.

What This Means For You

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

Are you a potential investor? If you’ve been keeping an eye on NOW, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - ServiceNow has 1 warning sign we think you should be aware of.

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.