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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for ServiceNow Inc. To summarize, we found that ServiceNow Inc ranked in the 56th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 89.33%. As for the metrics that stood out in our discounted cash flow analysis of ServiceNow Inc, consider:
The company's balance sheet shows it gets 98% of its capital from equity, and 2% of its capital from debt. Notably, its equity weight is greater than 86.01% of US equities in the Technology sector yielding a positive free cash flow.
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately just 7.83% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
ServiceNow Inc's effective tax rate, as measured by taxes paid relative to net income, is at 122 -- greater than 97.87% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
INOD, TACT, CSOD, CPSI, and EEFT can be thought of as valuation peers to NOW, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.