Head to Head Comparison: ServiceNow (NYSE:NOW) versus InterDigital (NASDAQ:IDCC)

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

Analyst Ratings

This is a summary of recent recommendations and price targets for InterDigital and ServiceNow, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InterDigital	0	2	2	0	2.50
ServiceNow	3	3	36	1	2.81

InterDigital currently has a consensus price target of $425.00, suggesting a potential upside of 48.66%. ServiceNow has a consensus price target of $154.50, suggesting a potential upside of 49.10%. Given ServiceNow’s stronger consensus rating and higher possible upside, analysts plainly believe ServiceNow is more favorable than InterDigital.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
InterDigital	$834.02 million	8.83	$406.64 million	$9.08	31.49
ServiceNow	$13.28 billion	8.10	$1.75 billion	$1.39	74.55

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

Risk & Volatility

InterDigital has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, ServiceNow has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Insider & Institutional Ownership

99.8% of InterDigital shares are held by institutional investors. Comparatively, 87.2% of ServiceNow shares are held by institutional investors. 3.5% of InterDigital shares are held by insiders. Comparatively, 0.3% of ServiceNow shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares InterDigital and ServiceNow’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
InterDigital	38.53%	28.34%	15.55%
ServiceNow	9.36%	15.17%	6.70%

Summary

InterDigital beats ServiceNow on 8 of the 15 factors compared between the two stocks.

About InterDigital

InterDigital, Inc. operates as a global research and development company with focus primarily on wireless, visual, artificial intelligence (AI), and related technologies. The company engages in the design and development of technologies that enable connected in a range of communications and entertainment products and services, which are licensed to companies providing such products and services, including makers of wireless communications, consumer electronics, IoT devices, and cars and other motor vehicles, as well as providers of cloud-based services, such as video streaming. It designs and develops a range of innovations for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company also develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G, 5G, advanced and 6G, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. In addition, it provides video coding and transmission technologies; and engages in the research and development of artificial intelligence and machine learning solutions. Further, the company's patented technologies are used in various products that include smartphones, tablets, consumer electronics, and base stations; televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.

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.