ServiceNow: Great Company, But Stock Acts Like A Levered QQQ

Sungarden Investment Publishing
Investing Group Leader
(10min)

Summary

  • Market chaos reveals which stocks are merely leveraged versions of popular indices, highlighting the impact of indexation on stock movements.
  • ServiceNow is a solid company, but its stock's high correlation to the Nasdaq 100 ETF diminishes its investment appeal.
  • Despite strong fundamentals and growth potential, NOW's valuation is too high, making it an unattractive investment at current prices.
  • Until the stock price decouples from broader market trends, NOW remains a sell due to high risk and unattractive valuation.
  • Sungarden YARP Portfolio members get exclusive access to our real-world portfolio. See all our investments here »

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ServiceNow (NYSE:NOW) is clearly a solid business, growing and innovating in its field, and an established leader. Its CEO is also a great presenter on television, what they like to call a "sound on" guest. That is, when I see he's on, I

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This article was written by

Sungarden Investment Publishing
7.04K Followers
I'm Rob Isbitts, founder of Sungarden Investment Publishing. I run the new investing group Sungarden YARP Portfolio, a community dedicated to navigating the modern investment climate with humility, discipline, and a non-traditional approach to income investing. I've been charting investments since the 1980s, and I spent decades an an investment advisor and fund manager before semi-retiring in 2020. Now, this investing group is my focus. The markets tells us a story…we just have to listen! I teach subscribers how to do that.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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