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).
Current Valuation Ratios
ServiceNow Inc., current price multiples
| ServiceNow Inc. | Accenture PLC | Adobe Inc. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Fair Isaac Corp. | 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) | $1,013.71 | |||||||||||||||||||
| No. shares of common stock outstanding | 207,000,000 | |||||||||||||||||||
| Growth rate (g) | 12.03% | |||||||||||||||||||
| Earnings per share (EPS) | $6.88 | |||||||||||||||||||
| Next year expected EPS | $7.71 | |||||||||||||||||||
| Operating profit per share | $6.59 | |||||||||||||||||||
| Sales per share | $53.06 | |||||||||||||||||||
| Book value per share (BVPS) | $46.42 | |||||||||||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||||||||||
| Price to earnings (P/E) | 147.25 | 25.51 | 28.49 | 83.53 | — | 75.55 | 44.77 | 72.45 | 42.46 | 53.23 | 730.81 | 53.31 | 41.79 | 37.77 | 121.91 | 49.00 | 57.25 | |||
| Price to next year expected earnings | 131.44 | 21.65 | 21.54 | 65.93 | — | 36.05 | 44.46 | 64.60 | 33.35 | 18.93 | 881.05 | 62.32 | 39.87 | 32.81 | 121.88 | 40.36 | 45.68 | |||
| Price-earnings-growth (PEG) | 12.24 | 1.43 | 0.88 | 3.13 | — | 0.69 | 64.06 | 5.96 | 1.56 | 0.29 | — | — | 8.64 | 2.50 | 4,911.60 | 2.29 | 2.26 | |||
| Price to operating profit (P/OP) | 153.84 | 19.31 | 23.50 | 65.27 | — | 52.81 | 28.75 | 59.14 | 34.20 | 37.47 | 1,088.18 | 200.91 | 35.95 | 63.06 | 154.52 | 39.86 | 44.37 | |||
| Price to sales (P/S) | 19.10 | 2.86 | 7.37 | 19.00 | 32.37 | 22.56 | 4.30 | 13.18 | 15.27 | 11.54 | 117.88 | 17.12 | 6.83 | 13.95 | 7.59 | 12.12 | 11.81 | |||
| Price to book value (P/BV) | 21.84 | 6.55 | 11.23 | 18.87 | 39.03 | — | 9.87 | 11.64 | 13.94 | 32.39 | 67.51 | 26.58 | 4.23 | 9.51 | 7.10 | 14.07 | 16.82 | |||
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
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 exhibited a significant downward trend from 978.47 in 2020 to 90.8 in 2023, indicating a considerable reduction in market expectations or an improvement in earnings relative to the stock price over this period. However, there was a notable increase to 146.4 in 2024, suggesting a partial rebound in market valuation or a change in earnings dynamics.
- Price to Operating Profit (P/OP) Ratio
- This ratio steadily decreased from 583.07 in 2020 to 152.95 in 2024, reflecting a consistent decline in the valuation of operating profit by the market. The trend suggests improved operating profitability or a compression in price relative to operating earnings, with a smoother decline compared to the P/E ratio.
- Price to Sales (P/S) Ratio
- The Price to Sales ratio fell from 25.66 in 2020 to 12.75 in 2022, indicating a decreasing market valuation relative to sales. However, the ratio rebounded to 18.99 by 2024, pointing to an increase in market valuation relative to sales in the latter years, possibly due to improved sales quality, growth prospects, or investor sentiment.
- Price to Book Value (P/BV) Ratio
- This ratio showed a marked decline from 40.91 in 2020 to 18.36 in 2022, followed by a modest recovery to 21.71 in 2024. The pattern suggests that the market valuation relative to the company's book value decreased initially but began to strengthen again in the most recent periods, indicating changing perceptions of asset value or balance sheet strength.
- Overall Observations
- Across all valuation metrics, there is a clear trend of decreasing market valuation multiples from 2020 through approximately 2022 or 2023. This may reflect a combination of earnings growth, changes in investor sentiment, or broader market conditions impacting valuation standards. The rebound in some ratios in 2024 suggests renewed investor confidence or improving financial performance metrics. Notably, the Price to Earnings ratio demonstrated the most pronounced volatility, while Price to Operating Profit and Price to Book Value ratios showed more gradual adjustments. This analysis points to a dynamic valuation environment with evolving profitability and market perception over the examined period.
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 | 206,000,000 | 205,000,000 | 203,000,000 | 200,000,000 | 196,100,000 | |
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | 1,425) | 1,731) | 325) | 230) | 119) | |
| Earnings per share (EPS)2 | 6.92 | 8.44 | 1.60 | 1.15 | 0.60 | |
| Share price1, 3 | 1,012.75 | 766.69 | 455.13 | 560.85 | 591.29 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 146.40 | 90.80 | 284.28 | 487.70 | 978.47 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | 31.07 | 27.81 | 22.93 | 36.58 | 28.32 | |
| Adobe Inc. | 31.98 | 49.64 | 33.15 | 48.90 | 41.69 | |
| Cadence Design Systems Inc. | 67.09 | 78.64 | 59.70 | 53.88 | 62.89 | |
| CrowdStrike Holdings Inc. | 892.67 | — | — | — | — | |
| Fair Isaac Corp. | 99.26 | 54.13 | 29.67 | 27.12 | 56.83 | |
| International Business Machines Corp. | 39.68 | 22.50 | 71.56 | 19.40 | 19.30 | |
| Intuit Inc. | 58.94 | 64.61 | 57.31 | 75.17 | 49.52 | |
| Microsoft Corp. | 35.67 | 33.96 | 28.34 | 35.14 | 35.04 | |
| Oracle Corp. | 37.63 | 38.96 | 26.85 | 15.84 | 16.69 | |
| Palantir Technologies Inc. | 632.38 | 246.77 | — | — | — | |
| Palo Alto Networks Inc. | 42.42 | 170.35 | — | — | — | |
| Salesforce Inc. | 71.24 | 879.57 | 135.68 | 48.20 | 1,204.70 | |
| Synopsys Inc. | 33.69 | 70.08 | 51.76 | 73.37 | 55.92 | |
| Workday Inc. | 50.53 | — | 1,957.29 | — | — | |
| P/E Ratio, Sector | ||||||
| Software & Services | 41.74 | 39.95 | 34.37 | 37.37 | 38.32 | |
| P/E Ratio, Industry | ||||||
| Information Technology | 45.10 | 35.92 | 26.81 | 29.49 | 31.10 | |
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
= 1,425,000,000 ÷ 206,000,000 = 6.92
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= 1,012.75 ÷ 6.92 = 146.40
5 Click competitor name to see calculations.
- Share Price
- The share price experienced a decline from 591.29 US$ at the end of 2020 to 455.13 US$ at the end of 2022. However, it showed a significant recovery and growth in the subsequent years, increasing to 766.69 US$ by the end of 2023 and further rising to 1,012.75 US$ by the end of 2024.
- Earnings Per Share (EPS)
- The EPS demonstrated a generally upward trend over the observed period. Starting at 0.6 US$ in 2020, it rose steadily to 1.6 US$ by the end of 2022. A notable jump occurred in 2023, where EPS reached 8.44 US$, followed by a decrease to 6.92 US$ in 2024, although the latter still represents a substantial improvement compared to earlier years.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio showed a consistent decline from an extremely high level of 978.47 in 2020 to 284.28 in 2022, indicating a reduction in market valuation relative to earnings despite the rising EPS. The ratio further decreased sharply to 90.8 in 2023, reflecting a strong increase in earnings relative to share price. However, in 2024, the P/E ratio increased again to 146.4, suggesting the share price grew at a faster pace than earnings or a change in market sentiment.
- Overall Trends and Insights
- The data shows a period of initial share price decline accompanied by rising earnings per share, resulting in a decreasing P/E ratio through 2022. The subsequent years marked strong growth in both share price and EPS, although EPS growth was particularly marked in 2023 before a slight pullback in 2024. The substantial decrease in the P/E ratio over the early years indicates improved earnings relative to share price, while the rise in 2024 suggests either increased market optimism or valuation expansion. Overall, financial performance improved notably over the period with increasing market valuation toward the end of the timeframe.
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 | 206,000,000 | 205,000,000 | 203,000,000 | 200,000,000 | 196,100,000 | |
| Selected Financial Data (US$) | ||||||
| Income from operations (in millions) | 1,364) | 762) | 355) | 257) | 199) | |
| Operating profit per share2 | 6.62 | 3.72 | 1.75 | 1.29 | 1.01 | |
| Share price1, 3 | 1,012.75 | 766.69 | 455.13 | 560.85 | 591.29 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 152.95 | 206.26 | 260.26 | 436.46 | 583.07 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | 23.52 | 21.69 | 16.83 | 28.35 | 22.21 | |
| Adobe Inc. | 26.38 | 40.52 | 25.85 | 40.64 | 51.75 | |
| Cadence Design Systems Inc. | 52.42 | 65.43 | 47.21 | 48.13 | 57.54 | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | |
| Fair Isaac Corp. | 69.38 | 36.15 | 20.43 | 21.03 | 45.39 | |
| International Business Machines Corp. | 25.48 | 17.99 | 14.35 | 16.23 | 15.90 | |
| Intuit Inc. | 48.11 | 49.04 | 46.05 | 62.00 | 41.56 | |
| Microsoft Corp. | 28.73 | 27.76 | 24.72 | 30.79 | 29.30 | |
| Oracle Corp. | 25.65 | 25.30 | 16.51 | 14.31 | 12.17 | |
| Palantir Technologies Inc. | 941.61 | 431.61 | — | — | — | |
| Palo Alto Networks Inc. | 159.88 | 193.40 | — | — | — | |
| Salesforce Inc. | 58.80 | 177.62 | 357.52 | 431.39 | 511.08 | |
| Synopsys Inc. | 56.25 | 67.90 | 43.85 | 75.64 | 59.90 | |
| Workday Inc. | 381.31 | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Software & Services | 33.96 | 31.98 | 27.23 | 33.52 | 31.79 | |
| P/OP Ratio, Industry | ||||||
| Information Technology | 34.96 | 29.91 | 22.75 | 26.04 | 26.91 | |
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
= 1,364,000,000 ÷ 206,000,000 = 6.62
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
= 1,012.75 ÷ 6.62 = 152.95
5 Click competitor name to see calculations.
- Share Price
- The share price experienced fluctuations over the observed period. From 2020 to 2022, the price declined from $591.29 to $455.13, reflecting a downward trend. However, from 2022 onward, there was a significant recovery and growth, with the share price rising to $766.69 in 2023 and further increasing to $1,012.75 in 2024. This upward trajectory in the latter years indicates improved market confidence or company performance.
- Operating Profit Per Share
- The operating profit per share demonstrated strong and consistent growth throughout the entire period. Starting at $1.01 in 2020, it increased steadily each year, reaching $6.62 by 2024. This suggests enhanced operational efficiency or higher profitability on a per-share basis over time.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio shows a clear declining trend, starting from a very high ratio of 583.07 in 2020 and decreasing to 152.95 by 2024. The reduction in this ratio indicates that the company's share price is becoming more justified by its operating profit per share, reflecting potential market revaluation towards more reasonable valuation multiples or improved earnings performance relative to the share price.
Price to Sales (P/S)
ServiceNow Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 206,000,000 | 205,000,000 | 203,000,000 | 200,000,000 | 196,100,000 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | 10,984) | 8,971) | 7,245) | 5,896) | 4,519) | |
| Sales per share2 | 53.32 | 43.76 | 35.69 | 29.48 | 23.05 | |
| Share price1, 3 | 1,012.75 | 766.69 | 455.13 | 560.85 | 591.29 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 18.99 | 17.52 | 12.75 | 19.02 | 25.66 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | 3.48 | 2.98 | 2.56 | 4.28 | 3.26 | |
| Adobe Inc. | 8.27 | 13.88 | 8.95 | 14.94 | 17.04 | |
| Cadence Design Systems Inc. | 15.26 | 20.02 | 14.23 | 12.55 | 13.85 | |
| CrowdStrike Holdings Inc. | 26.10 | 12.81 | 30.15 | 48.70 | 22.79 | |
| Fair Isaac Corp. | 29.64 | 15.36 | 8.05 | 8.08 | 10.38 | |
| International Business Machines Corp. | 3.81 | 2.73 | 1.94 | 1.94 | 1.47 | |
| Intuit Inc. | 10.72 | 10.72 | 9.30 | 16.09 | 11.78 | |
| Microsoft Corp. | 12.82 | 11.60 | 10.40 | 12.81 | 10.85 | |
| Oracle Corp. | 7.44 | 6.63 | 4.25 | 5.38 | 4.33 | |
| Palantir Technologies Inc. | 102.00 | 23.27 | 9.34 | 15.58 | 39.86 | |
| Palo Alto Networks Inc. | 13.62 | 10.87 | 9.62 | 10.72 | 6.66 | |
| Salesforce Inc. | 8.45 | 5.84 | 7.40 | 9.24 | 8.88 | |
| Synopsys Inc. | 12.45 | 14.75 | 10.03 | 13.22 | 10.08 | |
| Workday Inc. | 9.61 | 7.71 | 11.19 | 13.95 | 10.65 | |
| P/S Ratio, Sector | ||||||
| Software & Services | 10.32 | 8.77 | 7.46 | 9.46 | 7.68 | |
| P/S Ratio, Industry | ||||||
| Information Technology | 9.31 | 7.33 | 6.01 | 6.96 | 6.11 | |
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
= 10,984,000,000 ÷ 206,000,000 = 53.32
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= 1,012.75 ÷ 53.32 = 18.99
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a downward trend from 2020 through 2022, decreasing from $591.29 to $455.13. However, in the subsequent years, a significant recovery and growth occurred, with the price climbing to $766.69 in 2023 and further accelerating to $1012.75 by the end of 2024. This pattern indicates increased market confidence or improved company fundamentals during the latter period.
- Sales per Share
- Sales per share demonstrated consistent growth throughout the entire period reported. Starting at $23.05 in 2020, it increased annually, reaching $53.32 by 2024. This steady rise reflects continuous business expansion and enhanced revenue generation on a per-share basis.
- Price-to-Sales (P/S) Ratio
- The P/S ratio declined substantially from 25.66 in 2020 to 12.75 in 2022, suggesting that the share price decreased faster than sales per share initially, or that the market valuation relative to sales became more conservative. After 2022, the P/S ratio rose again, reaching 17.52 in 2023 and 18.99 in 2024. This increase, alongside rising share prices, suggests a restoration of higher market valuation multiples, possibly reflecting renewed investor optimism.
Price to Book Value (P/BV)
ServiceNow Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 206,000,000 | 205,000,000 | 203,000,000 | 200,000,000 | 196,100,000 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in millions) | 9,609) | 7,628) | 5,032) | 3,695) | 2,834) | |
| Book value per share (BVPS)2 | 46.65 | 37.21 | 24.79 | 18.48 | 14.45 | |
| Share price1, 3 | 1,012.75 | 766.69 | 455.13 | 560.85 | 591.29 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 21.71 | 20.60 | 18.36 | 30.36 | 40.91 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | 7.98 | 7.44 | 7.13 | 11.06 | 8.51 | |
| Adobe Inc. | 12.61 | 16.31 | 11.22 | 15.94 | 16.53 | |
| Cadence Design Systems Inc. | 15.15 | 24.05 | 18.46 | 13.68 | 14.90 | |
| CrowdStrike Holdings Inc. | 34.61 | 19.61 | 42.67 | 48.91 | 14.78 | |
| Fair Isaac Corp. | — | — | — | — | 40.58 | |
| International Business Machines Corp. | 8.75 | 7.49 | 5.34 | 5.90 | 5.24 | |
| Intuit Inc. | 9.47 | 8.92 | 7.20 | 15.71 | 17.71 | |
| Microsoft Corp. | 11.71 | 11.92 | 12.38 | 15.16 | 13.11 | |
| Oracle Corp. | 45.25 | 308.71 | — | 41.57 | 14.01 | |
| Palantir Technologies Inc. | 58.42 | 14.90 | 6.94 | 10.48 | 28.60 | |
| Palo Alto Networks Inc. | 21.15 | 42.84 | 252.00 | 71.88 | 20.61 | |
| Salesforce Inc. | 4.94 | 3.13 | 3.37 | 4.73 | 4.48 | |
| Synopsys Inc. | 8.48 | 14.02 | 9.24 | 10.50 | 7.57 | |
| Workday Inc. | 8.63 | 8.58 | 12.68 | 18.38 | 15.54 | |
| P/BV Ratio, Sector | ||||||
| Software & Services | 11.99 | 11.44 | 10.73 | 13.58 | 11.64 | |
| P/BV Ratio, Industry | ||||||
| Information Technology | 13.25 | 11.50 | 10.49 | 12.51 | 11.10 | |
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
= 9,609,000,000 ÷ 206,000,000 = 46.65
3 Closing price as at the filing date of ServiceNow Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= 1,012.75 ÷ 46.65 = 21.71
5 Click competitor name to see calculations.
- Share Price
- The share price experienced a decline from $591.29 at the end of 2020 to $455.13 at the end of 2022. Following this period of decline, there was a significant recovery and growth, with the share price increasing sharply to $766.69 by the end of 2023 and continuing to rise to $1,012.75 by the end of 2024.
- Book Value Per Share (BVPS)
- Book value per share showed a consistent upward trend throughout the period. It increased steadily from $14.45 in 2020 to $46.65 in 2024, indicating a strengthening of the company's underlying net asset value per share over the five-year span.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio declined significantly from 40.91 in 2020 to 18.36 in 2022, reflecting a reduction in the market’s valuation relative to the company's book value during this period. From 2022 onwards, the ratio rose moderately to 21.71 by the end of 2024, indicating a partial recovery in valuation multiples, although it remained well below the earlier peak levels.
- Overall Observations
- The data reflect initial market price corrections and valuation multiple contractions up to 2022, followed by strong share price recovery and moderate upward adjustments in valuation multiples thereafter. Concurrently, the company's book value per share grew steadily, suggesting ongoing improvements in the company's equity base regardless of market fluctuations. The rise in share price in the latter years outpaced the growth in book value, contributing to an increase in the P/BV ratio after its prior decline.