ServiceNow, Inc. (NOW) vs Shopify Inc. (SHOP)

ServiceNow, Inc. and Shopify Inc. are both Software Application companies. Shopify Inc. is the larger, with a market value of $187.0B against $142.1B — 1.3× the size. ServiceNow, Inc. trades at the lower P/E: 84.0× against 96.1×. Shopify Inc. grew revenue faster over the last twelve months: 32.5% against 22.2%. Shopify Inc. has the higher net margin (14.5% vs 11.3%) and the higher return on invested capital (14.6% vs 6.83%). Across the 22 metrics below, ServiceNow, Inc. leads on 12 and Shopify Inc. on 10.

Valuation

Metric NOW SHOP Software Application median
P/E 84.03 96.11 24.79
P/S 9.49 13.89 2.67
P/B 11.18 14.53 3.01
Price to free cash flow 30.83 78.34 16.59
EV/EBITDA 41.74 96.31 14.40
EV/Sales 9.69 13.59 2.62
Earnings yield 1.19% 1.04% 0.00%
Free cash flow yield 3.24% 1.28% 1.91%

Profitability

Metric NOW SHOP Software Application median
Gross margin 74.77% 47.77% 67.03%
Operating margin 11.40% 13.90% 0.00%
Net margin 11.34% 14.53% 0.00%
Free cash flow margin 31.09% 17.73% 4.32%
Return on equity 14.24% 15.54% 0.00%
Return on assets 6.22% 13.28% 0.00%
Return on invested capital 6.83% 14.58% 0.00%

Growth

Metric NOW SHOP Software Application median
Revenue growth (TTM) 22.19% 32.50% 12.40%
EPS growth (last fiscal year) 22.08% (39.35%) —
Revenue growth, 5-year CAGR 24.06% 31.58% 13.72%
Net income growth, 5-year CAGR 71.16% 30.96% 0.00%

Health

Metric NOW SHOP Software Application median
Debt to equity 0.60 0.01 0.02
Current ratio 0.70 5.35 1.55
Net debt to EBITDA (1.51) (3.85) 0.06

Dividend

Metric NOW SHOP Software Application median
Dividend yield — — 1.25%
Payout ratio 0.00 0.00 0.00

Size

Metric NOW SHOP Software Application median
Market cap 142.09b 187.01b 396.11m

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