Intrinsic value of ServiceNow - NOW

Previous Close

$147.74

  Intrinsic Value

$2.93

stock screener

  Rating & Target

str. sell

-98%

Previous close

$147.74

 
Intrinsic value

$2.93

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of NOW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  38.41
  39.10
  35.69
  32.62
  29.86
  27.37
  25.14
  23.12
  21.31
  19.68
  18.21
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.61
Revenue, $m
  1,391
  1,935
  2,625
  3,482
  4,522
  5,759
  7,207
  8,873
  10,764
  12,882
  15,228
  17,800
  20,595
  23,609
  26,835
  30,270
  33,909
  37,747
  41,781
  46,009
  50,429
  55,041
  59,846
  64,849
  70,051
  75,459
  81,079
  86,919
  92,989
  99,298
  105,857
Variable operating expenses, $m
 
  2,253
  3,054
  4,047
  5,253
  6,689
  8,368
  10,302
  12,495
  14,952
  17,674
  20,649
  23,891
  27,387
  31,130
  35,115
  39,336
  43,788
  48,468
  53,372
  58,499
  63,849
  69,424
  75,226
  81,261
  87,535
  94,054
  100,829
  107,870
  115,189
  122,798
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,813
  2,253
  3,054
  4,047
  5,253
  6,689
  8,368
  10,302
  12,495
  14,952
  17,674
  20,649
  23,891
  27,387
  31,130
  35,115
  39,336
  43,788
  48,468
  53,372
  58,499
  63,849
  69,424
  75,226
  81,261
  87,535
  94,054
  100,829
  107,870
  115,189
  122,798
Operating income, $m
  -423
  -318
  -428
  -566
  -732
  -930
  -1,162
  -1,428
  -1,731
  -2,070
  -2,445
  -2,849
  -3,296
  -3,778
  -4,295
  -4,844
  -5,427
  -6,041
  -6,686
  -7,363
  -8,070
  -8,808
  -9,577
  -10,378
  -11,210
  -12,076
  -12,975
  -13,910
  -14,881
  -15,891
  -16,941
EBITDA, $m
  -340
  -249
  -338
  -449
  -583
  -742
  -928
  -1,143
  -1,387
  -1,660
  -1,962
  -2,293
  -2,653
  -3,042
  -3,457
  -3,900
  -4,369
  -4,863
  -5,383
  -5,927
  -6,497
  -7,091
  -7,710
  -8,355
  -9,025
  -9,722
  -10,446
  -11,198
  -11,980
  -12,793
  -13,638
Interest expense (income), $m
  0
  18
  10
  28
  50
  76
  108
  145
  188
  237
  291
  351
  417
  489
  567
  650
  738
  831
  930
  1,034
  1,142
  1,256
  1,374
  1,498
  1,626
  1,760
  1,899
  2,043
  2,193
  2,349
  2,511
Earnings before tax, $m
  -450
  -336
  -438
  -593
  -781
  -1,006
  -1,270
  -1,574
  -1,919
  -2,307
  -2,736
  -3,200
  -3,713
  -4,267
  -4,861
  -5,494
  -6,164
  -6,872
  -7,616
  -8,397
  -9,213
  -10,064
  -10,952
  -11,876
  -12,837
  -13,836
  -14,874
  -15,953
  -17,075
  -18,240
  -19,452
Tax expense, $m
  2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -452
  -336
  -438
  -593
  -781
  -1,006
  -1,270
  -1,574
  -1,919
  -2,307
  -2,736
  -3,200
  -3,713
  -4,267
  -4,861
  -5,494
  -6,164
  -6,872
  -7,616
  -8,397
  -9,213
  -10,064
  -10,952
  -11,876
  -12,837
  -13,836
  -14,874
  -15,953
  -17,075
  -18,240
  -19,452

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  899
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,034
  1,578
  2,141
  2,840
  3,688
  4,698
  5,878
  7,238
  8,780
  10,508
  12,421
  14,519
  16,799
  19,257
  21,888
  24,690
  27,658
  30,789
  34,079
  37,528
  41,133
  44,895
  48,814
  52,894
  57,138
  61,549
  66,133
  70,897
  75,847
  80,993
  86,344
Adjusted assets (=assets-cash), $m
  1,135
  1,578
  2,141
  2,840
  3,688
  4,698
  5,878
  7,238
  8,780
  10,508
  12,421
  14,519
  16,799
  19,257
  21,888
  24,690
  27,658
  30,789
  34,079
  37,528
  41,133
  44,895
  48,814
  52,894
  57,138
  61,549
  66,133
  70,897
  75,847
  80,993
  86,344
Revenue / Adjusted assets
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
  1.226
Average production assets, $m
  218
  302
  410
  543
  705
  898
  1,124
  1,384
  1,679
  2,010
  2,376
  2,777
  3,213
  3,683
  4,186
  4,722
  5,290
  5,889
  6,518
  7,177
  7,867
  8,586
  9,336
  10,116
  10,928
  11,772
  12,648
  13,559
  14,506
  15,490
  16,514
Working capital, $m
  271
  -873
  -1,184
  -1,570
  -2,039
  -2,597
  -3,250
  -4,002
  -4,855
  -5,810
  -6,868
  -8,028
  -9,288
  -10,647
  -12,103
  -13,652
  -15,293
  -17,024
  -18,843
  -20,750
  -22,743
  -24,823
  -26,991
  -29,247
  -31,593
  -34,032
  -36,567
  -39,201
  -41,938
  -44,783
  -47,742
Total debt, $m
  508
  281
  788
  1,417
  2,180
  3,089
  4,152
  5,375
  6,763
  8,318
  10,040
  11,928
  13,980
  16,192
  18,561
  21,082
  23,754
  26,571
  29,532
  32,636
  35,880
  39,266
  42,794
  46,466
  50,285
  54,255
  58,381
  62,668
  67,124
  71,755
  76,570
Total liabilities, $m
  1,647
  1,420
  1,927
  2,556
  3,319
  4,228
  5,291
  6,514
  7,902
  9,457
  11,179
  13,067
  15,119
  17,331
  19,700
  22,221
  24,893
  27,710
  30,671
  33,775
  37,019
  40,405
  43,933
  47,605
  51,424
  55,394
  59,520
  63,807
  68,263
  72,894
  77,709
Total equity, $m
  387
  158
  214
  284
  369
  470
  588
  724
  878
  1,051
  1,242
  1,452
  1,680
  1,926
  2,189
  2,469
  2,766
  3,079
  3,408
  3,753
  4,113
  4,489
  4,881
  5,289
  5,714
  6,155
  6,613
  7,090
  7,585
  8,099
  8,634
Total liabilities and equity, $m
  2,034
  1,578
  2,141
  2,840
  3,688
  4,698
  5,879
  7,238
  8,780
  10,508
  12,421
  14,519
  16,799
  19,257
  21,889
  24,690
  27,659
  30,789
  34,079
  37,528
  41,132
  44,894
  48,814
  52,894
  57,138
  61,549
  66,133
  70,897
  75,848
  80,993
  86,343
Debt-to-equity ratio
  1.313
  1.780
  3.680
  4.990
  5.910
  6.580
  7.060
  7.430
  7.700
  7.920
  8.080
  8.220
  8.320
  8.410
  8.480
  8.540
  8.590
  8.630
  8.670
  8.700
  8.720
  8.750
  8.770
  8.780
  8.800
  8.810
  8.830
  8.840
  8.850
  8.860
  8.870
Adjusted equity ratio
  -0.451
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -452
  -336
  -438
  -593
  -781
  -1,006
  -1,270
  -1,574
  -1,919
  -2,307
  -2,736
  -3,200
  -3,713
  -4,267
  -4,861
  -5,494
  -6,164
  -6,872
  -7,616
  -8,397
  -9,213
  -10,064
  -10,952
  -11,876
  -12,837
  -13,836
  -14,874
  -15,953
  -17,075
  -18,240
  -19,452
Depreciation, amort., depletion, $m
  83
  69
  90
  117
  149
  188
  233
  285
  344
  410
  483
  555
  643
  737
  837
  944
  1,058
  1,178
  1,304
  1,435
  1,573
  1,717
  1,867
  2,023
  2,186
  2,354
  2,530
  2,712
  2,901
  3,098
  3,303
Funds from operations, $m
  256
  -267
  -348
  -476
  -632
  -818
  -1,037
  -1,288
  -1,575
  -1,896
  -2,253
  -2,645
  -3,071
  -3,531
  -4,024
  -4,549
  -5,107
  -5,694
  -6,313
  -6,961
  -7,639
  -8,347
  -9,085
  -9,852
  -10,651
  -11,482
  -12,345
  -13,241
  -14,173
  -15,142
  -16,149
Change in working capital, $m
  96
  -245
  -311
  -386
  -469
  -558
  -653
  -752
  -853
  -955
  -1,058
  -1,160
  -1,260
  -1,359
  -1,455
  -1,549
  -1,641
  -1,731
  -1,819
  -1,907
  -1,993
  -2,080
  -2,167
  -2,256
  -2,346
  -2,439
  -2,535
  -2,634
  -2,737
  -2,845
  -2,958
Cash from operations, $m
  160
  -22
  -37
  -90
  -163
  -260
  -384
  -537
  -722
  -941
  -1,195
  -1,485
  -1,810
  -2,172
  -2,569
  -3,000
  -3,465
  -3,963
  -4,493
  -5,054
  -5,646
  -6,267
  -6,917
  -7,597
  -8,305
  -9,043
  -9,810
  -10,607
  -11,436
  -12,297
  -13,191
Maintenance CAPEX, $m
  0
  -44
  -60
  -82
  -109
  -141
  -180
  -225
  -277
  -336
  -402
  -475
  -555
  -643
  -737
  -837
  -944
  -1,058
  -1,178
  -1,304
  -1,435
  -1,573
  -1,717
  -1,867
  -2,023
  -2,186
  -2,354
  -2,530
  -2,712
  -2,901
  -3,098
New CAPEX, $m
  -124
  -84
  -108
  -134
  -162
  -193
  -226
  -260
  -295
  -330
  -366
  -401
  -436
  -470
  -503
  -536
  -568
  -599
  -629
  -659
  -689
  -719
  -750
  -780
  -812
  -844
  -877
  -911
  -947
  -984
  -1,023
Cash from investing activities, $m
  -108
  -128
  -168
  -216
  -271
  -334
  -406
  -485
  -572
  -666
  -768
  -876
  -991
  -1,113
  -1,240
  -1,373
  -1,512
  -1,657
  -1,807
  -1,963
  -2,124
  -2,292
  -2,467
  -2,647
  -2,835
  -3,030
  -3,231
  -3,441
  -3,659
  -3,885
  -4,121
Free cash flow, $m
  52
  -150
  -205
  -305
  -434
  -594
  -789
  -1,022
  -1,294
  -1,607
  -1,963
  -2,361
  -2,802
  -3,285
  -3,809
  -4,373
  -4,978
  -5,620
  -6,300
  -7,018
  -7,771
  -8,560
  -9,384
  -10,244
  -11,140
  -12,072
  -13,041
  -14,048
  -15,095
  -16,182
  -17,312
Issuance/(repayment) of debt, $m
  -2
  -227
  507
  629
  763
  909
  1,063
  1,223
  1,388
  1,555
  1,722
  1,888
  2,052
  2,212
  2,369
  2,522
  2,671
  2,818
  2,961
  3,103
  3,245
  3,386
  3,528
  3,672
  3,819
  3,970
  4,126
  4,287
  4,456
  4,631
  4,815
Issuance/(repurchase) of shares, $m
  66
  1,006
  495
  663
  866
  1,107
  1,388
  1,710
  2,073
  2,479
  2,928
  3,410
  3,941
  4,513
  5,124
  5,774
  6,461
  7,185
  7,945
  8,741
  9,573
  10,440
  11,344
  12,284
  13,261
  14,277
  15,333
  16,430
  17,570
  18,755
  19,987
Cash from financing (excl. dividends), $m  
  -56
  779
  1,002
  1,292
  1,629
  2,016
  2,451
  2,933
  3,461
  4,034
  4,650
  5,298
  5,993
  6,725
  7,493
  8,296
  9,132
  10,003
  10,906
  11,844
  12,818
  13,826
  14,872
  15,956
  17,080
  18,247
  19,459
  20,717
  22,026
  23,386
  24,802
Total cash flow (excl. dividends), $m
  -11
  629
  797
  986
  1,195
  1,422
  1,661
  1,911
  2,167
  2,427
  2,687
  2,937
  3,191
  3,441
  3,685
  3,922
  4,155
  4,383
  4,606
  4,827
  5,047
  5,266
  5,487
  5,712
  5,940
  6,175
  6,417
  6,669
  6,931
  7,204
  7,490
Retained Cash Flow (-), $m
  180
  -1,006
  -495
  -663
  -866
  -1,107
  -1,388
  -1,710
  -2,073
  -2,479
  -2,928
  -3,410
  -3,941
  -4,513
  -5,124
  -5,774
  -6,461
  -7,185
  -7,945
  -8,741
  -9,573
  -10,440
  -11,344
  -12,284
  -13,261
  -14,277
  -15,333
  -16,430
  -17,570
  -18,755
  -19,987
Prev. year cash balance distribution, $m
 
  899
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  523
  302
  323
  329
  314
  273
  202
  94
  -52
  -241
  -473
  -750
  -1,072
  -1,440
  -1,852
  -2,306
  -2,803
  -3,339
  -3,914
  -4,526
  -5,174
  -5,856
  -6,572
  -7,321
  -8,102
  -8,915
  -9,761
  -10,639
  -11,551
  -12,497
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  501
  277
  281
  271
  244
  198
  136
  59
  -30
  -126
  -225
  -320
  -408
  -483
  -544
  -586
  -610
  -615
  -603
  -575
  -535
  -486
  -431
  -373
  -315
  -260
  -209
  -165
  -126
  -94
Current shareholders' claim on cash, %
  100
  50.0
  38.1
  29.1
  22.3
  17.1
  13.2
  10.2
  8.0
  6.2
  4.9
  3.8
  3.0
  2.4
  1.9
  1.5
  1.2
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1

ServiceNow, Inc. is provider of enterprise cloud computing solutions that define, structure, manage and automate services for global enterprises. The Company offers a set of cloud-based services that automate workflow within and between departments in an enterprise. It provides workflow solutions, and focuses on service management for customer support, human resources, security operations and other enterprise departments. The platform also enables customers to create, by themselves or with its partners, their own service-oriented business applications throughout the enterprise. The Company delivers its software through the Internet as a service. It markets its services to enterprises in a range of industries, including financial services, consumer products, information technology services, healthcare, government, education and technology. It operates data centers in Australia, Brazil, Canada, Hong Kong, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States.

FINANCIAL RATIOS  of  ServiceNow (NOW)

Valuation Ratios
P/E Ratio -54.7
Price to Sales 17.8
Price to Book 63.9
Price to Tangible Book
Price to Cash Flow 154.6
Price to Free Cash Flow 687.1
Growth Rates
Sales Growth Rate 38.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 39.3%
Cap. Spend. - 3 Yr. Gr. Rate 17.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 131.3%
Total Debt to Equity 131.3%
Interest Coverage 0
Management Effectiveness
Return On Assets -23.5%
Ret/ On Assets - 3 Yr. Avg. -16.5%
Return On Total Capital -46.7%
Ret/ On T. Cap. - 3 Yr. Avg. -29.5%
Return On Equity -94.8%
Return On Equity - 3 Yr. Avg. -59.3%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 71.3%
Gross Margin - 3 Yr. Avg. 67.4%
EBITDA Margin -26.4%
EBITDA Margin - 3 Yr. Avg. -19.7%
Operating Margin -30.3%
Oper. Margin - 3 Yr. Avg. -23%
Pre-Tax Margin -32.4%
Pre-Tax Margin - 3 Yr. Avg. -25.8%
Net Profit Margin -32.5%
Net Profit Margin - 3 Yr. Avg. -26.1%
Effective Tax Rate -0.4%
Eff/ Tax Rate - 3 Yr. Avg. -1.6%
Payout Ratio 0%

NOW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NOW stock intrinsic value calculation we used $1391 million for the last fiscal year's total revenue generated by ServiceNow. The default revenue input number comes from 2016 income statement of ServiceNow. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NOW stock valuation model: a) initial revenue growth rate of 39.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NOW is calculated based on our internal credit rating of ServiceNow, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of ServiceNow.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NOW stock the variable cost ratio is equal to 116.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NOW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for ServiceNow.

Corporate tax rate of 27% is the nominal tax rate for ServiceNow. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NOW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NOW are equal to 15.6%.

Life of production assets of 3.5 years is the average useful life of capital assets used in ServiceNow operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NOW is equal to -45.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $387 million for ServiceNow - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 171.102 million for ServiceNow is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of ServiceNow at the current share price and the inputted number of shares is $25.3 billion.

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INTC Intel 45.38 38.48  hold
RHT Red Hat 134.19 73.86  sell
ORCL Oracle 49.45 36.10  sell
NTAP NetApp 60.64 23.07  str.sell
ZEN Zendesk 42.60 0.62  str.sell

COMPANY NEWS

▶ IT Can Withstand a Market Sell-Off: Morgan Stanley   [Feb-06-18 03:07PM  Investopedia]
▶ ServiceNow reports 4Q loss   [Jan-31-18 05:28PM  Associated Press]
▶ ServiceNow, Inc. to Host Earnings Call   [10:30AM  ACCESSWIRE]
▶ The 10 Top Picks For 2018 From Argus Research   [Jan-28-18 10:04AM  Forbes]
▶ ServiceNow Price Target Hiked, Looks Like Another Salesforce.com   [Jan-16-18 04:02PM  Investor's Business Daily]
▶ Best-In-Class Growth Stocks   [Dec-27-17 11:02AM  Simply Wall St.]
▶ ServiceNow Reaches 80-Plus Relative Strength Rating Benchmark   [Dec-07-17 03:00AM  Investor's Business Daily]
▶ ServiceNow's Uptrend Is Still Going Strong   [Nov-27-17 01:03PM  TheStreet.com]
▶ 5 Companies That Microsoft Could Put on Its Shopping List   [Nov-25-17 05:20PM  TheStreet.com]
▶ Is It Too Late To Buy ServiceNow Inc (NOW)?   [Nov-15-17 07:27PM  Simply Wall St.]
▶ ServiceNow to Present at Upcoming Investor Conferences   [Nov-10-17 08:00AM  Business Wire]
▶ ETFs with exposure to ServiceNow, Inc. : November 9, 2017   [Nov-09-17 12:59PM  Capital Cube]
▶ Top NasdaqGM Growth Stocks To Buy   [Nov-08-17 11:02AM  Simply Wall St.]
▶ ServiceNow Profit Beats, Billings Upside Light, Investors Take Profits   [Oct-25-17 05:19PM  Investor's Business Daily]
▶ ServiceNow reports 3Q loss   [04:57PM  Associated Press]
▶ ServiceNow scoops up San Mateo mobile platform startup   [09:48AM  American City Business Journals]
▶ ServiceNow, Inc. to Host Earnings Call   [08:05AM  ACCESSWIRE]
▶ ETFs with exposure to ServiceNow, Inc. : October 16, 2017   [Oct-16-17 09:57AM  Capital Cube]
▶ ETFs with exposure to ServiceNow, Inc. : October 5, 2017   [Oct-05-17 11:12AM  Capital Cube]
▶ 3 Stocks That Look Just Like Salesforce in 2002   [Sep-27-17 09:00AM  Motley Fool]
▶ ServiceNow Is NOW Poised for a Breakout   [Aug-31-17 01:05PM  TheStreet.com]
▶ Why ServiceNow Could Be Actionable At New High   [04:48AM  Investor's Business Daily]
▶ ServiceNow reports 2Q loss   [Jul-26-17 10:33PM  Associated Press]
▶ [$$] Tech M&A: thrift shop picks   [Jun-19-17 06:55AM  Financial Times]
▶ The 3 Best IT Services Companies to Buy in 2017   [Jun-02-17 09:28PM  Motley Fool]
▶ ServiceNow Price Target Hiked On Improving Margins, Cash Flow   [May-25-17 04:08PM  Investor's Business Daily]
▶ 3 Stocks That Look Just Like Google in 2004   [May-20-17 01:18PM  Motley Fool]
▶ ETFs with exposure to ServiceNow, Inc. : May 11, 2017   [May-11-17 05:15PM  Capital Cube]
Financial statements of NOW
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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