Head-To-Head Review: ServiceNow (NYSE:NOW) versus Jack Henry & Associates (NASDAQ:JKHY)

Jack Henry & Associates (NASDAQ:JKHY) and ServiceNow (NYSE:NOW) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, valuation, analyst recommendations, dividends and profitability.

Institutional & Insider Ownership

98.8% of Jack Henry & Associates shares are owned by institutional investors. Comparatively, 87.2% of ServiceNow shares are owned by institutional investors. 0.6% of Jack Henry & Associates shares are owned by insiders. Comparatively, 0.3% of ServiceNow shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Jack Henry & Associates has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, ServiceNow has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares Jack Henry & Associates and ServiceNow’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	20.59%	23.75%	16.80%
ServiceNow	12.59%	18.16%	9.04%

Valuation and Earnings

This table compares Jack Henry & Associates and ServiceNow”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.38 billion	4.59	$455.75 million	$6.96	21.73
ServiceNow	$13.28 billion	7.03	$1.75 billion	$1.67	53.94

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

Analyst Recommendations

This is a summary of current ratings for Jack Henry & Associates and ServiceNow, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	0	4	9	1	2.79
ServiceNow	1	6	34	2	2.86

Jack Henry & Associates currently has a consensus target price of $200.15, suggesting a potential upside of 32.37%. ServiceNow has a consensus target price of $146.65, suggesting a potential upside of 62.78%. Given ServiceNow’s stronger consensus rating and higher probable upside, analysts clearly believe ServiceNow is more favorable than Jack Henry & Associates.

Summary

ServiceNow beats Jack Henry & Associates on 9 of the 15 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.

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.