During the last three months, the growth of the leaders in the S&P 500 index was the software industry +5.1%.
Some of the largest (by market capitalization) companies in this industry: Intuit ($183.8 billion), which develops business process automation solutions for enterprise customers, and ServiceNow ($158.9 billion), which controls more small business accounts and tax management reporting in the USA.
According to the latest quarterly reporting data, we analyzed each company’s profitability, strength, and efficiency criteria according to the methodology of Stanford University professor Joseph Piotroski.
As you can see, both companies are currently performing quite strongly in terms of fundamentals. However, ServiceNow shows better results and outperforms Intuit on the efficiency criterion.
Over the past 3 months, shares of Intuit have increased by +1.1%, and ServiceNow – by +3.1% (the S&P 500 index has increased by +4.0%). ServiceNow outperformed its closest competitor but underperformed the index.
So, the winner in today’s battle is ServiceNow (NOW). ServiceNow’s business looks more “healthy” in terms of operating margin, and its shares show a better yield.
* This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
