Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

ServiceNow Inc. (NYSE:NOW)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

ServiceNow Inc., FCFF calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (loss) 626,698  (26,704) (149,130) (451,804) (198,426)
Net noncash charges 530,920  697,039  666,626  515,496  411,603 
Changes in operating assets and liabilities, net of effect of business combinations 78,354  140,754  125,329  96,229  101,914 
Net cash provided by operating activities 1,235,972  811,089  642,825  159,921  315,091 
Interest expense, net of tax1 26,294  36,085  35,240  21,963  20,524 
Purchases of property and equipment (264,892) (224,462) (150,510) (105,562) (87,481)
Purchases of other intangibles (72,689) (24,400) (6,670) (18,750) (1,750)
Free cash flow to the firm (FCFF) 924,685  598,312  520,885  57,572  246,384 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-25).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the ServiceNow Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. ServiceNow Inc.’s FCFF increased from 2017 to 2018 and from 2018 to 2019.

Interest Paid, Net of Tax

ServiceNow Inc., interest paid, net of tax calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Effective Income Tax Rate (EITR)
EITR1 21.00% 31.57% 34.00% 34.00% 34.00%
Interest Paid, Net of Tax
Interest expense, before tax 33,283  52,733  53,394  33,278  31,097 
Less: Interest expense, tax2 6,989  16,648  18,154  11,315  10,573 
Interest expense, net of tax 26,294  36,085  35,240  21,963  20,524 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-25).

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2 2019 Calculation
Interest expense, tax = Interest expense × EITR
= 33,283 × 21.00% = 6,989

Enterprise Value to FCFF Ratio, Current

ServiceNow Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (US$ in thousands)
Enterprise value (EV) 85,906,548 
Free cash flow to the firm (FCFF) 924,685 
Valuation Ratio
EV/FCFF 92.90
Benchmarks
EV/FCFF, Competitors1
Adobe Inc. 53.81
Alphabet Inc. 28.14
Autodesk Inc. 35.10
Facebook Inc. 31.35
International Business Machines Corp. 11.68
Intuit Inc. 32.72
Microsoft Corp. 32.85
Oracle Corp. 15.79
salesforce.com inc. 58.18
EV/FCFF, Sector
Software & Computer Services 31.06
EV/FCFF, Industry
Technology 27.59

Based on: 10-K (filing date: 2020-02-20).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Enterprise Value to FCFF Ratio, Historical

ServiceNow Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in thousands)
Enterprise value (EV)1 65,991,898  42,539,740  27,522,585  14,211,010  8,414,708 
Free cash flow to the firm (FCFF)2 924,685  598,312  520,885  57,572  246,384 
Valuation Ratio
EV/FCFF3 71.37 71.10 52.84 246.84 34.15
Benchmarks
EV/FCFF, Competitors4
Adobe Inc. 40.48 31.36 33.45 25.29 30.64
Alphabet Inc. 28.19 30.10 27.21 18.22 24.91
Autodesk Inc. 98.38 — 144.92 33.22 19.49
Facebook Inc. 25.59 28.30 29.70 30.03 48.05
International Business Machines Corp. 12.86 12.27 12.20 14.18 11.31
Intuit Inc. 33.30 27.69 25.66 31.97 17.54
Microsoft Corp. 26.19 23.86 15.52 14.60 13.26
Oracle Corp. 14.03 11.11 15.07 11.24 12.09
salesforce.com inc. 41.15 40.55 33.55 34.92 47.12
EV/FCFF, Sector
Software & Computer Services 25.23 24.09 21.26 17.80 18.72
EV/FCFF, Industry
Technology 21.26 19.17 19.36 15.65 14.15

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-25).

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2 See details »

3 2019 Calculation
EV/FCFF = EV ÷ FCFF
= 65,991,898 ÷ 924,685 = 71.37

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. ServiceNow Inc.’s EV/FCFF ratio increased from 2017 to 2018 and from 2018 to 2019.