ServiceNow (NOW) AI Stock Analysis

• Market Cap: $177.38B
• Dividend Yield: N/A
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 103.2
• Beta (1Y): 1.45
• Revenue Growth: 21.05%
• EPS Growth: 28.68%
• Country: US
• Employees: 26,293
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 4.82
• Shares Outstanding: 207,481,500
• 10 Day Avg. Volume: 1,146,429
• 30 Day Avg. Volume: 1,537,078
• PEG Ratio: -8.32
• Price to Book (P/B): 22.71
• Price to Sales (P/S): 19.87
• P/FCF Ratio: 63.90
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 14.98
• Enterprise Value/Gross Profit: 19.20
• Enterprise Value/Ebitda: 66.52
• 1Y Price Target: $1,154.04
• Price Target Upside: 35.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29
• EPS Forecast (FY): 17.37
• Revenue Forecast (FY): $13.24B

• Rating: 75 Outperform
• Price Target: $961.00 ▲(12.59% Upside)

ServiceNow's strong financial performance and positive earnings call sentiment are significant strengths, driving the overall score. However, high valuation concerns and technical indicators suggesting potential bearish momentum moderate the score. The stock split is a positive corporate event, but its impact is limited compared to core financial and market factors.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, enhancing long-term financial stability.

AI Integration

Strong AI product adoption positions ServiceNow as a leader in digital transformation, driving future growth and competitive advantage.

Strategic Acquisition

Acquiring Veza enhances ServiceNow's security capabilities, broadening its product portfolio and strengthening its market position.

Negative Factors

Margin Pressures

Decreasing margins could signal rising costs, potentially impacting profitability and requiring strategic cost management.

Cash Flow Growth Slowdown

Slowing cash flow growth may limit future investments and strategic initiatives, affecting long-term expansion capabilities.

Public Sector Uncertainty

Government shutdowns can delay projects and revenue recognition, posing risks to financial performance and growth forecasts.

ServiceNow Business Overview & Revenue Model

Company Description

ServiceNow, Inc. provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. It operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption, and collaboration and development tools. The company also provides information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; IT business management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT Asset Management to automate IT asset lifecycles; and security operations that connects with internal and third party. In addition, it offers governance, risk, and compliance product to manage risk and resilience; human resources, legal, and workplace service delivery products; safe workplace applications; customer service management product; and field service management applications. Further, it provides App Engine product; IntegrationHub enables application to extend workflows; and professional, industry solutions, and customer support services. It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through direct sales team and resale partners. It has a strategic partnership with Celonis to help customers identify and prioritize processes that are suitable for automation. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. The company was founded in 2004 and is headquartered in Santa Clara, California.

How the Company Makes Money

ServiceNow generates revenue primarily through subscription-based licensing for its cloud platform and applications. Customers pay annual or multi-year fees to access its suite of products, which include ITSM, ITOM, and CSM solutions, along with additional modules for security, governance, and compliance. A significant portion of the revenue comes from upselling and cross-selling additional features and products to existing clients. ServiceNow also benefits from a robust ecosystem of partnerships with technology providers, system integrators, and consulting firms, which help drive customer acquisition and implementation services. Additionally, the company invests in innovation and product development to maintain a competitive edge, further enhancing its revenue potential.

ServiceNow Financial Statement Overview

Summary

ServiceNow exhibits strong financial health with consistent revenue growth, high profitability, and a stable balance sheet. The company effectively manages its leverage and generates substantial cash flow, supporting its strategic initiatives. Minor concerns include margin pressures and slowing cash flow growth.

Income Statement

ServiceNow has demonstrated strong revenue growth with a TTM growth rate of 5.06%, following a consistent upward trend over the past years. The company maintains robust profitability with a gross profit margin of 78.52% and a net profit margin of 13.78% in the TTM. EBIT and EBITDA margins are healthy, indicating efficient operations. However, the slight decline in gross profit margin from the previous year suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.22, indicating prudent leverage management. Return on equity is strong at 16.62%, showcasing effective use of shareholder funds. The equity ratio of 60.20% suggests a stable capital structure, though the slight increase in debt from previous periods warrants monitoring.

Cash Flow

ServiceNow's cash flow is robust, with a free cash flow growth rate of 2.83% in the TTM. The operating cash flow to net income ratio of 0.55 indicates strong cash generation relative to earnings. The free cash flow to net income ratio of 0.82 highlights effective cash management. However, the growth rate has slowed compared to previous years, suggesting potential future challenges in cash flow expansion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.67B	10.98B	8.97B	7.25B	5.90B	4.52B
Gross Profit	9.89B	8.70B	7.05B	5.67B	4.54B	3.53B
EBITDA	2.85B	2.23B	1.59B	768.00M	729.00M	452.93M
Net Income	1.73B	1.43B	1.73B	325.00M	230.00M	119.00M
Balance Sheet
Total Assets	21.79B	20.38B	17.39B	13.30B	10.80B	8.71B
Cash, Cash Equivalents and Short-Term Investments	5.41B	5.76B	4.88B	4.28B	3.30B	3.09B
Total Debt	2.40B	2.28B	2.28B	2.23B	2.21B	2.13B
Total Liabilities	10.49B	10.77B	9.76B	8.27B	7.10B	5.88B
Stockholders Equity	11.30B	9.61B	7.63B	5.03B	3.69B	2.83B
Cash Flow
Free Cash Flow	3.96B	3.42B	2.70B	2.17B	1.79B	1.35B
Operating Cash Flow	4.84B	4.27B	3.40B	2.72B	2.19B	1.79B
Investing Cash Flow	-1.93B	-2.50B	-2.17B	-2.58B	-1.61B	-1.51B
Financing Cash Flow	-2.07B	-1.34B	-803.00M	-344.00M	-506.00M	597.00M

ServiceNow Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 853.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOW, the sentiment is Neutral. The current price of 853.56 is above the 20-day moving average (MA) of 832.13, below the 50-day MA of 876.92, and below the 200-day MA of 912.73, indicating a neutral trend. The MACD of -5.28 indicates Negative momentum. The RSI at 56.84 is Neutral, neither overbought nor oversold. The STOCH value of 80.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NOW.

ServiceNow Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRM	80 Outperform	$244.58B	34.83	12.18%	0.67%	8.41%	22.92%
NOW	75 Outperform	$177.38B	103.21	16.81%	―	21.05%	28.68%
WDAY	73 Outperform	$58.12B	93.32	7.34%	―	13.35%	-60.76%
DDOG	69 Neutral	$53.50B	512.20	3.52%	―	26.63%	-46.13%
TEAM	66 Neutral	$42.45B	―	-15.35%	―	19.51%	53.35%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SNOW	54 Neutral	$76.17B	―	-53.32%	―	28.48%	-19.12%

ServiceNow Corporate Events

ServiceNow Shareholders Approve 5-for-1 Stock Split

On December 5, 2025, ServiceNow‘s shareholders approved a 5-for-1 stock split, which will be effective on December 17, 2025. This move is expected to increase the number of shares and adjust trading on a split-adjusted basis starting December 18, 2025, potentially enhancing the company’s market positioning and shareholder value.

ServiceNow Announces Five-for-One Stock Split

On October 29, 2025, ServiceNow announced a five-for-one stock split, subject to shareholder approval at a Special Meeting on December 5, 2025. The company reported strong Q3 2025 financial results, with significant growth in subscription revenues and performance obligations. ServiceNow also unveiled new AI innovations and expanded its global presence, highlighting its strategic partnerships and investments aimed at enhancing its market position and driving AI adoption across industries.

ServiceNow Amends Prospectus for Logik.io Acquisition

On September 26, 2025, ServiceNow, Inc. filed an amendment to its prospectus supplement with the SEC, related to the resale of shares acquired through its acquisition of Logik.io Inc. This amendment includes the issuance of an additional 609 shares of common stock due to a post-closing price adjustment outlined in the merger agreement.