SERVICENOW STOCK ANALYSIS - Better than Palantir & Salesforce? The Best Software Stock?

In this in-depth ServiceNow (NOW) stock analysis video, I will explain why I believe ServiceNow stock is one of the best software companies over the long term. You will learn about why I think ServiceNow is a much better software business compared to Palantir and Salesforce, ServiceNow's business model and biggest risks, ServiceNow's long-term growth prospects and how to calculate ServiceNow's intrinsic value, so you will know when ServiceNow stock becomes undervalued, fairly valued or overvalued.
0:00 Intro
2:31 Growth Stock Portfolio Update
4:48 ServiceNow's Business Overview
8:44 ServiceNow's Biggest Risks to Consider
13:30 ServiceNow's Long-term Growth Prospects
21:12 ServiceNow Stock Valuation
23:53 Will I Buy ServiceNow Stock?
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Disclaimer: All content on this channel is for informational and entertainment purposes only. They should not be construed as professional financial advice. If you need such advice, please consult a licensed financial or tax advisor. You will also need to do your research. No guarantee is given regarding the accuracy of the information on this channel.

[@TheIntelligentInvestor]

👏👏👏👏👏If you like my channel and want to support it, here is how you can help (My Patreon Blog): www.patreon.com/IntelligentInvestorChannel

[@shannonoliver7992]

Great Analysis, Victor. It's the best I've seen on KZbin. You do a serious Deep Dive, and I appreciate it. You've earned a permanent subscriber. Awesome portfolio btw!

[@TheIntelligentInvestor]

Thanks Shannon! Appreciate your support!

[@gavin2730]

Can you revisit Mastercard and Visa's long term prospects in light of positive and negative developments like Visa Direct, CBDCs, and PIX?

[@michaelfriend3990]

Bill McDermot is a great CEO. As long as he's with NOW we're in good hands.

[@TheIntelligentInvestor]

I agree, he used to run SAP before.

[@shannonoliver7992]

Just joined your Patreon and will join the discord tomorrow.

[@michaelfriend3990]

Great work Victor. Last couple companies I've worked for use NOW and we're always using more and more of their service.

[@TheIntelligentInvestor]

Thx Michael, the company I work for also use ServiceNow.

[@cclinton8240]

Love the analysis Victor. Do you think you would be able to revisit TSMC since it's been over a year since your last analysis and much has changed. Thank you!

[@TheIntelligentInvestor]

Good idea, I’ll make an updated TSMC video soon. I’m working on ARM Holdings next.

[@MengShengVincent]

Hi Victor, thanks for your great sharing. Recently Visa has been falling. Would you come out with a video update for the latest visa?

[@TheIntelligentInvestor]

Good idea that’ll probably be in the next few weeks.

[@alexkoch14]

Thanks for the analysis, Victor. One question about your DCF- why use a terminal growth rate of 7.5%? That seems high when most models use between 2-4%.

[@TheIntelligentInvestor]

Good question, it really depends on the business. For traditional businesses like Walmart, I think it makes sense for the terminal growth rate to be around 2% to 5%. But for SaaS businesses (eg Adobe, Salesforce, Intuit Inc, etc.), It’s very common for them to grow their revenue by around 8% to 12% consistently each year because of subscription revenues, increasing subscribers, new products, and new subscription plans with higher prices. Hence I think the terminal growth rate of 7.5% is reasonable.

[@alexkoch14]

@@TheIntelligentInvestor makes sense. I saw an article that the terminal growth rate should be a company’s reinvestment rate (CAPEX + changes in working capital / net income) * ROIC. I think that’s a great way to look at it as it removes another manual input/bias from the model.

[@TheIntelligentInvestor]

Thx for the suggestion, let me try that formula.