ServiceNow (NOW) AI Stock Analysis

• Market Cap: $177.51B
• Dividend Yield: N/A
• Average Volume (3M): 1.61M
• Price to Earnings (P/E): 108.7
• Beta (1Y): 1.45
• Revenue Growth: 21.12%
• EPS Growth: 43.91%
• Country: US
• Employees: 26,293
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Application
• EPS (TTM): 4.09
• Shares Outstanding: 208,000,000
• 10 Day Avg. Volume: 1,878,143
• 30 Day Avg. Volume: 1,609,480
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 17.54
• Enterprise Value/Gross Profit: 22.34
• Enterprise Value/Ebitda: 81.15
• 1Y Price Target: $1,146.24
• Price Target Upside: 32.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 34

• Rating: 79 Outperform
• Price Target: $1,080.00 ▲(25.10% Upside)

ServiceNow's overall stock score is driven by strong financial performance and positive earnings call results, which highlight robust growth and strategic advancements. However, the high valuation presents a potential risk, and technical indicators suggest mixed short-term signals.

Positive Factors

AI Execution

AI execution is driving deeper consolidation and expanding AI budget share, positioning ServiceNow to meet its FY26 $1B AI ACV target.

Earnings

ServiceNow reported better-than-expected results with total revenue increasing by 22.5% YoY, surpassing consensus estimates.

Strategic Growth

Strategic verticals in Transportation, Retail, Energy, and TMT are showing over 50% NNACV growth.

Negative Factors

Federal Comps

Several near-term factors keep analysts on the sideline for now, including tough comps ahead in Federal.

Guidance

The FY25 guidance raise was underwhelming, reflecting continued conservatism as management noted an overall unchanged macro environment.

ServiceNow Business Overview & Revenue Model

Company Description

ServiceNow, Inc. is a leading provider of cloud-based digital workflow solutions designed to streamline and automate business processes across various sectors including IT, human resources, customer service, and security. Founded in 2004, ServiceNow's platform enables organizations to improve operational efficiency and enhance service delivery through its suite of applications and services, such as IT Service Management (ITSM), IT Operations Management (ITOM), and IT Business Management (ITBM). The company's innovative solutions cater to a diverse range of industries, empowering businesses to transform their operations and drive digital transformation.

How the Company Makes Money

ServiceNow primarily generates revenue through a subscription-based model, where customers pay for access to its cloud platform and associated services. The main revenue streams include subscription fees for its various products, such as ITSM, ITOM, and customer service management solutions. Additionally, the company earns revenue from professional services, which encompass consulting, implementation, and training services that help organizations effectively deploy and utilize their solutions. ServiceNow has established significant partnerships with technology giants and system integrators that enhance its market reach and service capabilities, contributing to its overall growth and profitability.

ServiceNow Financial Statement Overview

Summary

ServiceNow demonstrates strong financial performance with consistent revenue growth, improved profitability, and a solid balance sheet. The company effectively manages its cash flow, supporting strategic growth initiatives and reducing leverage.

Income Statement

ServiceNow demonstrates strong performance in the income statement with consistent revenue growth from $4.52B in 2020 to $12.06B TTM. The gross profit margin is healthy at approximately 78.5% TTM, and the net profit margin has improved to 13.8% TTM from 2.6% in 2020, showing significant profitability growth. EBIT and EBITDA margins have also shown consistent improvement, indicating operational efficiency.

Balance Sheet

The company's balance sheet reflects solid financial health with a debt-to-equity ratio declining from 0.75 in 2020 to 0.08 TTM, indicating reduced financial leverage. The equity ratio has improved to 49.6% TTM from 32.5% in 2020, strengthening the company's capital structure. ROE has increased to 15.2% TTM, showcasing effective utilization of equity to generate profits.

Cash Flow

ServiceNow's cash flow statement indicates robust operational cash flow growth to $4.70B TTM, supporting a strong free cash flow position. The operating cash flow to net income ratio is 2.83 TTM, suggesting efficient conversion of income into cash. The free cash flow to net income ratio is 2.32 TTM, highlighting the company's ability to generate cash for reinvestment and debt reduction.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.98B	8.97B	7.25B	5.90B	4.52B
Gross Profit	8.70B	7.05B	5.67B	4.54B	3.53B
EBITDA	2.23B	1.59B	768.00M	729.00M	452.93M
Net Income	1.43B	1.73B	325.00M	230.00M	119.00M
Balance Sheet
Total Assets	20.38B	17.39B	13.30B	10.80B	8.71B
Cash, Cash Equivalents and Short-Term Investments	5.76B	4.88B	4.28B	3.30B	3.09B
Total Debt	2.28B	2.28B	2.23B	2.21B	2.13B
Total Liabilities	10.77B	9.76B	8.27B	7.10B	5.88B
Stockholders Equity	9.61B	7.63B	5.03B	3.69B	2.83B
Cash Flow
Free Cash Flow	3.42B	2.70B	2.17B	1.79B	1.35B
Operating Cash Flow	4.27B	3.40B	2.72B	2.19B	1.79B
Investing Cash Flow	-2.50B	-2.17B	-2.58B	-1.61B	-1.51B
Financing Cash Flow	-1.34B	-803.00M	-344.00M	-506.00M	597.00M

ServiceNow Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 863.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOW, the sentiment is Negative. The current price of 863.3 is below the 20-day moving average (MA) of 926.60, below the 50-day MA of 970.53, and below the 200-day MA of 975.09, indicating a bearish trend. The MACD of -34.18 indicates Positive momentum. The RSI at 30.09 is Neutral, neither overbought nor oversold. The STOCH value of 15.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NOW.

ServiceNow Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOW	79 Outperform	$177.51B	108.66	16.95%	―	21.12%	43.91%
CRM	77 Outperform	$221.47B	36.23	10.31%	0.69%	7.97%	14.85%
WDAY	72 Outperform	$57.30B	123.18	5.70%	―	15.38%	-67.58%
TEAM	67 Neutral	$41.59B	―	-21.58%	―	19.66%	15.17%
DDOG	65 Neutral	$44.97B	371.89	4.45%	―	26.00%	-25.64%
SNOW	64 Neutral	$64.42B	―	-40.16%	―	27.50%	-49.96%
Sector *	57 Neutral	HK$14.37B	9.53	-0.60%	4.38%	7.06%	-38.12%

ServiceNow Corporate Events

ServiceNow Files Prospectus for Share Resale Post-Acquisition

On May 30, 2025, ServiceNow, Inc. filed a prospectus supplement with the SEC related to the resale of shares by certain stockholders. These shares were acquired through ServiceNow’s acquisition of Logik.io Inc., indicating a strategic move to integrate and expand its technological capabilities.

The most recent analyst rating on (NOW) stock is a Hold with a $960.00 price target. To see the full list of analyst forecasts on ServiceNow stock, see the NOW Stock Forecast page.

ServiceNow Shareholders Approve Key Governance Amendments

At the 2025 annual meeting of shareholders held on May 22, 2025, ServiceNow, Inc. announced that shareholders approved amendments to the company’s Certificate of Incorporation, which include reflecting Delaware law provisions regarding officer exculpation and eliminating supermajority voting provisions. Additionally, the shareholders elected directors, approved executive compensation, and ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025. The meeting also saw shareholders voting against proposals related to the right to cure nomination defects and removing the one-year holding period for calling special meetings, indicating a preference for maintaining existing governance structures.

The most recent analyst rating on (NOW) stock is a Hold with a $960.00 price target. To see the full list of analyst forecasts on ServiceNow stock, see the NOW Stock Forecast page.