The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For instance the ServiceNow, Inc. (NYSE:NOW) share price is 275% higher than it was three years ago. Most would be happy with that. On top of that, the share price is up 28% in about a quarter. This could be related to the recent financial results, released recently – you can catch up on the most recent data by reading our company report.
ServiceNow isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years ServiceNow has grown its revenue at 31% annually. That’s well above most other pre-profit companies. Along the way, the share price gained 55% per year, a solid pop by our standards. But it does seem like the market is paying attention to strong revenue growth. Nonetheless, we’d say ServiceNow is still worth investigating – successful businesses can often keep growing for long periods.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
ServiceNow is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think ServiceNow will earn in the future (free analyst consensus estimates)
A Different Perspective
It’s nice to see that ServiceNow shareholders have received a total shareholder return of 34% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 28% per year), it would seem that the stock’s performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. If you would like to research ServiceNow in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
But note: ServiceNow may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.