ServiceNow provides cloud-based solutions that define, structure, manage, and automate services to enterprise operations in North America, Europe, the Middle East, Africa, the Asia Pacific, and other countries. The Company provides cloud-based service management solutions that address the needs of a range of departments within an organization, including IT, human resources (HR), facilities, field service, marketing, legal and finance. The company was founded in 2004 and is based in Santa Clara, California.
NOW Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for ServiceNow Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that ServiceNow Inc ranked in the 56th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of ServiceNow Inc, consider:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 98. Notably, its equity weight is greater than 86.8% of US equities in the Technology sector yielding a positive free cash flow.
The business' balance sheet suggests that 2% of the company's capital is sourced from debt; this is greater than merely 7.41% of the free cash flow producing stocks we're observing.
ServiceNow Inc's effective tax rate, as measured by taxes paid relative to net income, is at 122 -- greater than 97.84% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as NOW, try CY, EEFT, PCOM, PRFT, and AMOT.