This score-card analysis attributes an Overall Score to a company by analyzing several aspects that I consider to be among the most important.
In summary, a company to have an overall score close to 100% must have the following characteristics:
- Report high growth rates in the last 3 years (and in the last quarter) in terms of Revenue, Gross Profit, Operating Income and Net Income. Furthermore, it must operate with high and improving margins in recent years.
- Analysts expect Earnings Per Share (EPS) and revenues to grow in the short term (in the next quarter) and in the medium to long term (in the next 5 years). Moreover, they expect the company to be undervalued at current prices and in the last quarter their EPS expectations must have been beaten with a consequent rise in share prices.
- The stock price of the company must have outperformed the S&P 500 index and in the last 3 months the Hedge Funds and Insiders bought shares in the company.
The overall score ranges from 0% (if the characteristics listed above are all very negative) to +100% and it is unlikely that there will be a company with a +100% score because the requirements for achieving this score are very high, however a score higher than +70% can be considered good.
This analysis alone is not enough to decide whether or not to invest in a company because it does not provide indications on the timing of entry, but it is a good starting point.
ServiceNow Inc (NOW)
- Overall Score: 82,4%
- Quarterly results:
- Revenue up 31.6% and net income up 380%
- Net margin 4 times better.
- For the next quarter, analysts expect further growth, with revenue up +31.5% and EPS +13%.
- Annual results:
- Revenue rise to 3.2 billion, an increase of 220% compared to the revenue of 1 billion 3 years ago.
- Net Income TTM (sum of the last 4 quarters) of 35 million compared to the loss of 200 million 3 years ago.
- Analysts expect an annual EPS growth of 30.2% and consider NOW undervalued by 6.5% at current prices.
- Hedge funds reduced their positions by 523k shares in the last quarter. In the same period the insiders sold shares for 54 million dollars.
ServiceNow Inc. is an American cloud computing company with its headquarters in Santa Clara, California
The overall score of NOW is 82,4% .
In the last 6 months, NOW has underperformed the S&P500 index by -6,7% and analysts believe the company is undervalued by 6,5% .
In the last quarter, the company reported revenue of 885,8 million, up by 31,6% compared to the same quarter 12 months earlier. Revenue TTM (Trailing-12-Months) are equal to 3224 million, up by 220,6% in the last 3 years.
NOW reported an operating income of 56,3 million in the last quarter, an improvement of 486,5% compared to the same quarter 12 months earlier, also reporting an improvement of 345,6% in the operating margin. Considering the sum of the last four quarters (TTM), NOW reports an operating income of 13,9 Million , a growth of 108,4% compared to three years ago and an improvement of 102,6% in the operating margin.
NOW reported a net income of 40,6 million in the last quarter, an improvement of 383,3% compared to the same quarter 12 months earlier, also reporting an improvement of 267,3% in the net margin. The TTM net income is 35 million , a growth of 117,6% compared to three years ago and the net margin has improved by 105,5% .
In the next quarter, analysts expect growth in EPS (Earnings Per Share) of 13,0% and a growth in revenue of 31,5% . Furthermore, they expect an annual growth of NOW EPS by 30,2% for the next 5 years.
In the last quarter, NOW reported better EPS than analysts’ expectations and the stock price reacted by increasing by 8,1% .
Finally, in the last quarter the Hedge Funds have decreased their positions by 523.4k shares. The Insiders have sold shares worth $54M .
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This analysis considers numerical data to understand whether a company is good or not based on business growth and whether analysts are positive about it.
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Sources & additional info
*The comparison with the S&P 500 index (black line) is visible inside the graph.
*Data updated to the last quarterly report available
*Data in Millions of Dollars
*Data from zacks.com, tipranks.com, reuters.com, finance.yahoo.com
*Company information from wikipedia.com
DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment. Stocks trading involves substantial risk of loss and is not suitable for every investor. Trade responsibly.