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 42th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for NOW, they are:
As a business, NOW is generating more cash flow than 84.4% of positive cash flow stocks in the Technology.
The business' balance sheet suggests that 2% of the company's capital is sourced from debt; this is greater than only 10.52% 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 162 -- greater than 98.54% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
SGH, AMAT, CDK, IT, and SMCI 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.