Is ServiceNow Inc. (NOW) Stock Cheap Or Risky?


At the last check on Thursday, ServiceNow Inc.’s (NYSE:NOW) stock was up $26.17, moving up 5.21 percent to $528.72. The average number of shares traded per day over the past five days has been 1,222,095 shares. 3 times new highs have been achieved over the past 5 days, with a $19.56 gain in that time frame. In the last twenty days, the average volume was 1,596,794, while in the previous 50 days, it was 1,621,234.

Since last month, NOW stock rose 16.45%. Shares of the company fell to $427.68 on 04/27/23, the lowest level in the past month. A 52-week high of $521.58 was reached on 05/25/23 after having rallying from a 52-week low of $337.00. Since the beginning of this year, NOW’s stock price has risen by 36.17% or $141.46, and marked a new high 12 times. However, the stock has increased by 1.37% since its 52-week high.

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NOW stock investors should be aware that ServiceNow Inc. (NOW) stock had its last reported insider trading activity 3 days ago on May 22. Caimi Lara, the Chief Custmr Ofc-GM Impact Svc of the company, disposed of 267 shares for $513.77 on May 22. It resulted in a $137,177 divestment by the insider. Mastantuono Gina sold 4,278 shares at an average price of $500.00 on May 18. The insider now owns 8,734 shares following the transaction. On May 18, Chief Digital Information Ofc Bedi Christopher sold 1,888 shares at $500.00 apiece. The transaction was valued at $944,000.

Valuation Metrics

Right now, ServiceNow Inc. (NOW) has a P/E ratio of about 256.14. The stock’s beta is 1.02. Besides these, the trailing price-to-sales (P/S) ratio of 13.44, the price-to-book (PB) ratio of 18.25, and the price-to-cash flow ratio of 47.83 may also be considered.

Financial Health

In the three months ended March 30, ServiceNow Inc.’s quick ratio stood at 1.20, while its current ratio was 1.20, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending March 30 was 0.27. On the profitability front, the trailing twelve-month gross margin is 78.40% percent. In the year ended March 30, EBITDA margin amounted to 9.62%, whereas operating margins totaled 5.40%. Based on annual data, NOW earned $5.67 billion in gross profit and brought in $7.25 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 4.30%. Return on equity (ROE) for the past 12 months was 8.30%.

According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. NOW’s revenue rose 17.84% to $1.94 billion during the quarter, while net income inched up to $2.1 billion. While analysts expected ServiceNow Inc. to report $2.04 quarterly earnings, the actual figure was $2.37 per share, beating the consensus estimate by 16.20%. During the quarter, the company generated $376.0 million in EBITDA. The liabilities of ServiceNow Inc. were 8.01 billion at the end of its most recent quarter ended March 30, and its total debt was $2.24 billion. The value of shareholders’ equity is $204.0 million.

Technical Picture

This quick technical analysis looks at ServiceNow Inc.’s (NOW) price momentum. With a historical volatility rate of 34.72%, the RSI 9-day stood at 79.54% on 24 May.

With respect to its five-day moving average, the current ServiceNow Inc. price is up by +3.83% percent or $19.56. At present, NOW shares trade +16.59% above its 20-day simple moving average and +36.43% percent above its 100-day simple moving average. However, the stock is currently trading approximately +25.45% above its SMA50 and +8.67% above its SMA200.

Stochastic coefficient K was 87.53% and Stochastic coefficient D was 87.99%, while ATR was 15.32. Given the Stochastic reading of 98.35% for the 14-day period, the RSI (14) reading has been calculated as 73.69%. As of today, the MACD Oscillator reading stands at 12.08, while the 14-day reading stands at 30.03.

Analyst Ratings

ServiceNow Inc. (NOW) has been rated Buy by analysts. According to 0 brokerage firms, NOW is a sell, and 3 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 5 analysts rate ServiceNow Inc. stock as buy, with 30 recommending it as overweight.

With a median target price of $545.00, the current consensus forecast for the stock is $410.00 – $650.00. Based on these forecasts, analysts predict ServiceNow Inc. (NOW) will achieve an average price target of $542.62.


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