Should You Buy ServiceNow Inc Stock (NOW) Wednesday?

InvestorsObserver gives ServiceNow Inc (NOW) a poor valuation score of 3 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. NOW currently has better value than 3% of stocks based on these metrics. Long-term investors committed to buy-and-hold should find the valuation ranking system most relevant when making investment decisions.

NOW gets 3 Valuation Rank now. Find out what this means to you and get the outstanding rankings NOW!

Metric Analysis

NOW has the following twelve -month Price to Earnings (PE) ratio of 481.3. The historical average of approximately 15 shows a low value for NOW stock because investors are paying a higher share price in relation to the company’s earnings. NOW’s high trailing PE ratio shows that the company has been trading more than its fair value in the market recently. The following 12-month earnings per share (EPS) of 1.14 does not justify the current stock price. However, the following PE ratios do not factor into the company’s expected growth rate, resulting in many newer companies with high PE ratios due to the high growth potential that attracts investors beyond of insufficient income. NOW’s 12-month-forward PE to Growth (PEG) ratio of 10.52 is considered a weak value because the market overvalues ​​NOW in relation to the company’s expected earnings growth. NOW’s PEG comes from its forward price to revenue ratio divided by its growth rate. A PEG ratio of 1 represents an ideal correlation between earnings growth and share price. Because they incorporate more fundamentals of a company’s overall health and focus on the future than in the past, PEG ratios are one of the most used metrics of analysis by analysts today.

Summary

NOW’s valuation metrics are weak at its current price due to the oversized PEG ratio despite strong growth. NOW’s PE and PEG are worse than the market average resulting in a below average analysis score. Click Here to get the full ServiceNow Inc stock Report (NOW).

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