Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Current Valuation Ratios
ServiceNow Inc., current price multiples
| ServiceNow Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | Synopsys Inc. | Workday Inc. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||
| Current share price (P) | |||||||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||||||
| Growth rate (g) | |||||||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||||||
| Next year expected EPS | |||||||||||||||||||||
| Operating profit per share | |||||||||||||||||||||
| Sales per share | |||||||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||||||
| Price to next year expected earnings | |||||||||||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||||||
| Price to book value (P/BV) | |||||||||||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
ServiceNow Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Price to earnings (P/E) ratio
- The price to earnings ratio shows a marked decreasing trend from 978.49 in 2020 to a low of 90.8 in 2023. This represents a significant contraction over four years, indicating a considerable reduction in market valuation relative to earnings. In 2024, there is a reversal of this trend, with the ratio increasing to 146.4, suggesting a partial recovery in market sentiment or earnings expectations.
- Price to operating profit (P/OP) ratio
- The price to operating profit ratio displays a consistent decline from 583.08 in 2020 down to 152.95 in 2024. The decline is steady each year, with no increases, implying a gradual alignment of the company's market price with its operating profitability over time. This decline is less steep in the last two years, indicating a potential stabilization in valuation against operating profits.
- Price to sales (P/S) ratio
- The price to sales ratio decreased substantially from 25.66 in 2020 to 12.75 in 2022, suggesting a reduction in the market price relative to revenues across these years. However, this trend reverses in 2023 and 2024, where the ratio rises to 17.52 and then 18.99 respectively. This upward movement indicates increasing confidence in revenue growth or expectations for future sales performance during those years.
- Price to book value (P/BV) ratio
- The price to book value ratio progressively declines from 40.91 in 2020 to 18.36 in 2022, followed by a modest increase to 21.71 in 2024. This movement suggests diminishing market valuations relative to the company's book value initially, with some recovery in the final years. The rise after 2022 could signal improving asset valuation or market reassessment of the company's net asset value.
Price to Earnings (P/E)
ServiceNow Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Software & Services | ||||||
| P/E Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends and shifts in key performance indicators.
- Share Price
- The share price fluctuated over the years, beginning at $118.26 and experiencing a decline to $91.03 by the end of 2022. However, this was followed by a significant increase in the subsequent years, reaching $153.34 in 2023 and further rising to $202.55 by the end of 2024. This upward trend in the later years indicates strong market confidence and a positive reassessment of the company's value.
- Earnings Per Share (EPS)
- EPS showed consistent growth from $0.12 in 2020 to a peak of $1.69 in 2023. In 2024, there was a slight decrease to $1.38, but the overall trend across the period demonstrates substantial improvement in profitability. The rapid increase between 2021 and 2023 suggests effective operational performance or revenue growth during this timeframe.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio exhibited a pronounced downward trend from an extremely high level of 978.49 in 2020 to 90.8 in 2023, indicating that the share price became more aligned with earnings as EPS increased. However, in 2024, the P/E ratio rose again to 146.4, which may reflect a market premium applied to the shares despite the slight drop in EPS. This could be due to investor expectations for future growth or other qualitative factors.
In summary, the company demonstrated considerable profitability improvements as evidenced by the EPS trend, which likely contributed to the significant rise in share price over the latter years. The fluctuating P/E ratio points to changing market perceptions and valuation dynamics, with a general move toward a more reasonable valuation as earnings grew, followed by a slight increase suggesting renewed optimism or market speculation.
Price to Operating Profit (P/OP)
ServiceNow Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from operations (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Software & Services | ||||||
| P/OP Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a fluctuating pattern over the five-year period. It started at $118.26 and then experienced a slight decline to $112.17 the following year. This trend continued with a more pronounced drop to $91.03 by the end of the third year. However, a significant recovery occurred in the last two years, with the share price rising sharply to $153.34 and then to $202.55, indicating a strong positive momentum towards the end of the timeline.
- Operating Profit per Share (OPPS) Trend
- The operating profit per share showed consistent growth throughout the period. Beginning at a modest $0.20, it increased steadily each year, reaching $0.26, $0.35, $0.74, and finally $1.32 by the end of the last year. This upward trajectory suggests improving operating performance and profitability on a per-share basis.
- Price to Operating Profit Ratio (P/OP)
- The ratio of price to operating profit per share declined markedly from 583.08 to 152.95 over the course of the five years. This decrease reflects the combined effect of the share price initially decreasing and the operating profit per share increasing, resulting in a more moderate valuation multiple. The steady fall in the P/OP ratio may signal that the market is recognizing enhanced operational profitability, adjusting the valuation to a more justified level compared to earlier periods.
- Overall Insights
- The financial indicators portray a company that improved its operating profitability considerably between 2020 and 2024. While the share price initially decreased, it rebounded strongly in the latter years, exceeding previous highs. The substantial reduction in the price to operating profit ratio over time points to a maturing valuation, where increasing earnings are being more closely aligned with market pricing. This trend may suggest growing investor confidence driven by improved operational results and a healthier profit generation profile per share.
Price to Sales (P/S)
ServiceNow Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Software & Services | ||||||
| P/S Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibits initial volatility, decreasing from $118.26 in 2020 to $91.03 in 2022, followed by a significant upward movement reaching $202.55 by 2024. This suggests a recovery and strong market confidence in the latter years.
- Sales Per Share
- Sales per share show consistent growth over the period, rising steadily from $4.61 in 2020 to $10.66 in 2024. This continuous increase indicates improving revenue generation efficiency on a per-share basis.
- Price-to-Sales Ratio (P/S)
- The P/S ratio declined from 25.66 in 2020 to a low of 12.75 in 2022, indicating that the share price decreased faster than sales per share initially. However, the ratio then increased to 18.99 by 2024, reflecting an expansion in market valuation relative to sales following the share price recovery.
- Overall Financial Implications
- The data reveals a period of initial market correction with diminishing share price amid improving sales per share, followed by a strong rebound in share price leading to a higher valuation multiple. This pattern may imply enhanced investor sentiment and confidence in future growth prospects after 2022.
Price to Book Value (P/BV)
ServiceNow Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Software & Services | ||||||
| P/BV Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a fluctuating yet overall positive trend over the five-year period. Initially, it declined from $118.26 at the end of 2020 to $91.03 at the end of 2022. However, from 2022 onwards, the share price showed a significant recovery and growth, reaching $153.34 by the end of 2023 and further increasing to $202.55 by the end of 2024. This resurgence indicates strengthened market confidence or improved company performance in the latter years.
- Book Value per Share (BVPS) Trend
- The book value per share showed a consistent and steady increase throughout the period. Starting at $2.89 in 2020, it rose to $3.70 in 2021, then to $4.96 in 2022, followed by more pronounced increases to $7.44 in 2023 and $9.33 in 2024. This upward trajectory suggests continuous growth in the company's net asset value on a per-share basis, reflecting enhanced shareholder equity over time.
- Price-to-Book Value (P/BV) Ratio Trend
- The price-to-book value ratio demonstrated a declining trend initially, decreasing sharply from 40.91 in 2020 to 18.36 by the end of 2022. This decline indicates that the share price's premium over the book value was compressing during this period, possibly due to the drop in share price or the relatively faster growth in book value. Post-2022, the P/BV ratio increased moderately to 20.60 in 2023 and 21.71 in 2024, reflecting the rise in share price outpacing the increase in book value slightly during these years.
- Overall Insights
- The financial data reveals a dynamic interplay between market valuation and underlying book value. The company experienced a phase of market price correction or investor revaluation up to 2022, followed by a significant rebound in share price aligned with steadily improving book value. The moderate increase in P/BV ratios during the final two years suggests that the market is assigning a somewhat higher premium relative to book value, possibly indicating renewed investor optimism or expectations of future growth. The consistent rise in BVPS is indicative of strengthening fundamental value, while the volatility in share price and P/BV ratio underscores periodic shifts in market sentiment.