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NYSE : NOW OUR TEAM Carol Fuss Matthew Yardley OUTLINE - - PowerPoint PPT Presentation
NYSE : NOW OUR TEAM Carol Fuss Matthew Yardley OUTLINE - - PowerPoint PPT Presentation
NYSE : NOW OUR TEAM Carol Fuss Matthew Yardley OUTLINE ServiceNow Overview Enterprise Cloud Computing Strengths and Strategy Growth Opportunities Risk Analysis Financial Analysis Valuation Our Recommendation
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- ServiceNow Overview
- Enterprise Cloud Computing
- Strengths and Strategy
- Growth Opportunities
- Risk Analysis
- Financial Analysis
- Valuation
- Our Recommendation
OUTLINE
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$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 06/29/12 12/29/12 06/29/13 12/29/13 06/29/14 12/29/14 06/29/15 12/29/15 06/29/16 12/29/16
Ticker: NOW
PRICE HISTORY
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SERVICENOW PLATFORM
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ENTERPRISE SOFTWARE INDUSTRY
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MARKET CAPITALIZATION
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TOPLINE GROWTH
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- SaaS Business Model
- First Movers and Industry Pioneers
- Dedicated Business Units
- Ready Made Platform
STRENGTHS & OPPORTUNITIES
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- Forbes Global 2,000 (G2K)
- Upsells
- Renewal Rates
- Emerging Product Mix
- Multi-Product Customer
- Research & Development
GROWTH OPPORTUNITIES
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G2K PENETRATION
533 556 574 604 633 654 680 704 735 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16
37%
58%
44% 13%
G2K Penetration North America EMEA APAC & Other
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UPSELLS
157 169 188 204 227 244 272 302 341
8% 11% 9% 11% 7% 11% 11% 13%
0% 2% 4% 6% 8% 10% 12% 14% 50 100 150 200 250 300 350 400
Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16
Contracts > $1M Q/Q Growth
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RENEWAL RATE
99% 97% 97% 99% 97%
70% 80% 90% 100%
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16
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PRODUCT MIX
71 67 60 59 54 12 16 13 12 21 17 17 27 29 25
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16
Service Management ITOM Other
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MULTI PRODUCT CUSTOMERS
49% 53% 56% 59% 62% 65% 67% 69% 72% Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Mult-Product Customers Single-Product Customers
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RESEARCH & DEVELOPMENT
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- Cyber Security
- Convertible Debt
- Management Turnover
- Operational History of New Products
- Patents
- Exchange Rates
KEY RISKS
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BrightPoint Security
CYBER SECURITY
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Frank Slootman CEO
MANAGEMENT TURNOVER
John Donahoe Designated CEO
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- Expires November 2018
- Cash, Stock, Combination
- Selective Scenarios for Pre Conversion
CONVERTIBLE DEBT
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DEBT SCENARIOS
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- Financial Analysis
- DCF
- Comparables
- Multiples
VALUATION
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FINANCIAL ANALYSIS
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FINANCIAL ANALYSIS
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FINANCIAL ANALYSIS
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DCF
- WACC 15.36%
- Terminal Growth Rate 13.5%
- Tax Rate 40%
- Terminal Value $14.8B
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DCF WITH CONVERTIBLE DEBT
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DCF SENSITIVITIES
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MULTIPLES
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TARGET PRICE
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- International Expansion G2K
- R&D
- Strategic Partnerships
- Cyber Security
- Patents
- Management
WHY IS SERVICENOW A HOLD?
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APPENDIX:
MAIN SLIDES
- PRICE HISTORY
- PLATFORM
- INDUSTRY MRKT CAP
- TOPLINE GROWTH
- STENGTHS
- GROWTH OPPS
- G2K
- UPSELLS
- RENEWALS
- PRODUCT MIX
- MULTI-PROD CUST.
- R&D
- KEY RISKS
- CYBER SECURITY
- MANAGEMENT
- CONVERTIBLE DEBT
- FINANCIAL ANALYSIS
- DCF
- SENSITIVITIES
- MULTIPLES
- TARGET PRICE
- WHY HOLD?
FINANCIALS
- IS MANAGEMENT
- BS MANAGEMENT
- CF MANAGEMENT
- WACC
- DCF MANAGEMENT
- DCF BASE CASE
- DCF DOWNSIDE
- SENSITIVITIES MANAGEMENT
- SENSITIVITIES BASE CASE
- SENSITIVITIES DOWNSIDE
- DEBT SCENARIOS
COMPARABLE COMPANIES
- CA, INC.
- WORKDAY, INC.
- SALESFORCE.COM, INC.
OTHER
- KEY ASSUMPTIONS
- INSTITUTIONAL HOLDERS
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INCOME STATEMENT
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BALANCE SHEET
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STATEMENT OF CASH FLOW
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WACC
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DCF MANAGEMENT
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DCF BASE CASE
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DCF DOWNSIDE
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SENSITIVITIES: MANAGEMENT
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SENSITIVITIES BASE CASE
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SENSITIVITIES DOWNSIDE
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DEBT SCENARIOS
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CA, INC.
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WORKDAY, INC.
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SALSEFORCE.COM, INC.
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TOP 5 INSTITUTIONAL HOLDERS
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