Financial Comparison: ServiceNow (NYSE:NOW) & KWESST Micro Systems (NASDAQ:KWE)

ServiceNow (NYSE:NOW) and KWESST Micro Systems (NASDAQ:KWE) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Earnings and Valuation

This table compares ServiceNow and KWESST Micro Systems”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServiceNow	$8.97 billion	23.23	$1.73 billion	$6.43	157.34
KWESST Micro Systems	$1.11 million	1.33	-$5.47 million	($7.80)	-0.06

ServiceNow has higher revenue and earnings than KWESST Micro Systems. KWESST Micro Systems is trading at a lower price-to-earnings ratio than ServiceNow, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ServiceNow and KWESST Micro Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServiceNow	12.77%	16.03%	7.54%
KWESST Micro Systems	-494.30%	-428.31%	-135.32%

Institutional & Insider Ownership

87.2% of ServiceNow shares are owned by institutional investors. Comparatively, 21.4% of KWESST Micro Systems shares are owned by institutional investors. 0.3% of ServiceNow shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

ServiceNow has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, KWESST Micro Systems has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for ServiceNow and KWESST Micro Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServiceNow	1	3	24	2	2.90
KWESST Micro Systems	0	0	0	0	0.00

ServiceNow currently has a consensus target price of $1,129.93, suggesting a potential upside of 11.69%. Given ServiceNow’s stronger consensus rating and higher probable upside, equities analysts clearly believe ServiceNow is more favorable than KWESST Micro Systems.

Summary

ServiceNow beats KWESST Micro Systems on 14 of the 15 factors compared between the two stocks.

About ServiceNow

ServiceNow, Inc. provides end to-end intelligent workflow automation platform solutions for digital businesses in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company operates the Now platform for end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, process mining, performance analytics, and collaboration and development tools. It also provides asset management, cloud observability, integrated risk management; information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; strategic portfolio management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT asset management; and security operations that connects with internal and third party. In addition, the company offers integrated risk management product to manage risk and resilience; environmental, social and governance management product; human resources, legal, and workplace service delivery products; customer service management product; and field service management applications. Further, the company provides app engine product; automation engine; platform privacy and security product; and source-to-pay operations. It serves to government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through service providers and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.

About KWESST Micro Systems

KWESST Micro Systems Inc. engages in the development and commercialization of tactical systems and ammunitions for military, public safety agencies, and personal defense markets. It provides non-lethal products, including PARA OPS devices and ARWEN products. The company was incorporated in 2017 and is headquartered in Ottawa, Canada.