ServiceNow (NOW) AI Stock Analysis

• Market Cap: $209.61B
• Dividend Yield: N/A
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 137.1
• Beta (1Y): 1.46
• Revenue Growth: 21.01%
• EPS Growth: -20.93%
• Country: US
• Employees: 26,293
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 4.04
• Shares Outstanding: 207,151,920
• 10 Day Avg. Volume: 1,280,627
• 30 Day Avg. Volume: 1,142,394
• PEG Ratio: 6.20
• Price to Book (P/B): 15.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.99
• Enterprise Value/Market Cap: 0.38
• Enterprise Value/Revenue: 1.84
• Enterprise Value/Gross Profit: 8.73
• Enterprise Value/Ebitda: 9.89
• 1Y Price Target: $1,075.63
• Price Target Upside: 2.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 36

• Rating: 75 Outperform
• Price Target: ―

ServiceNow showcases strong financial performance with remarkable revenue and cash flow growth. The technical indicators suggest a positive trend, although the high valuation poses a risk. The earnings call highlights robust growth prospects with a strategic AI focus, while the Moveworks acquisition further positions the company for future innovation and market expansion. Despite macroeconomic uncertainties, the company remains fundamentally sound and well-positioned for continued success.

Positive Factors

Expansion and Growth

ServiceNow has demonstrated meaningful success in expanding outside of Core IT workflows with CRM and Industry workflows generating $1.4B+ in ACV.

Market Strategy and Innovation

ServiceNow is in the early stages of disrupting the CRM market, which is experiencing a significant shift due to AI.

Negative Factors

Renewal Cohorts and Conservatism

Incremental headwinds are anticipated due to larger renewal cohorts and conservatism for Federal.

Valuation Concerns

At 41X EV/CY26 FCF, the opportunity looks priced in.

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 the sale of subscriptions to its cloud-based platform and related professional services. The company's subscription model allows customers to access its suite of software applications, which are typically sold on multi-year contracts. Key revenue streams include IT service management, IT operations management, and customer and employee workflow solutions. ServiceNow also earns from professional services, such as consulting and training, which help clients integrate and optimize the platform for their specific needs. Significant partnerships with major technology firms and systems integrators further enhance ServiceNow's market reach and contribute to its revenue growth.

ServiceNow Financial Statement Overview

Summary

ServiceNow is experiencing robust revenue growth and maintains strong profitability metrics. Its balance sheet highlights a prudent leverage strategy with a low debt-to-equity ratio, and solid cash flow generation supports ongoing investments and shareholder returns.

Income Statement

ServiceNow has demonstrated strong revenue growth with a TTM revenue increase of approximately 4.41%, following consistent annual growth over recent years. The company maintains robust profitability, evidenced by a gross profit margin of 78.96% and a net profit margin of 13.41% as of the latest TTM data. The EBIT and EBITDA margins are also solid at 12.93% and 18.01%, respectively. This reflects efficient operations and strong pricing power in the software application sector.

Balance Sheet

The balance sheet of ServiceNow indicates a healthy financial position, with a low debt-to-equity ratio of 0.09, suggesting prudent leverage management. The return on equity (ROE) is a strong 15.17%, highlighting effective use of shareholder funds. The equity ratio stands at 48.36%, indicating a balanced capital structure with substantial equity backing.

Cash Flow

ServiceNow's cash flow metrics exhibit positive trends. The operating cash flow to net income ratio is 2.99, indicating strong cash generation from operations relative to net income. Free cash flow has grown consistently, with a notable TTM free cash flow of $3,672 million. The free cash flow to net income ratio is 2.39, showing efficient conversion of earnings to cash. This strong cash flow performance supports ongoing investments and shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.47B	10.98B	8.97B	7.25B	5.90B	4.52B
Gross Profit	9.05B	8.70B	7.05B	5.67B	4.54B	3.53B
EBITDA	2.34B	2.23B	1.59B	768.00M	257.00M	452.93M
Net Income	1.54B	1.43B	1.73B	325.00M	230.00M	119.00M
Balance Sheet
Total Assets	20.97B	20.38B	17.39B	13.30B	10.80B	8.72B
Cash, Cash Equivalents and Short-Term Investments	6.60B	5.76B	4.88B	4.28B	3.30B	3.09B
Total Debt	2.40B	2.28B	2.28B	2.23B	2.21B	2.14B
Total Liabilities	10.83B	10.77B	9.76B	8.27B	7.10B	5.88B
Stockholders Equity	10.14B	9.61B	7.63B	5.03B	3.69B	2.83B
Cash Flow
Free Cash Flow	3.67B	3.42B	2.70B	2.17B	1.79B	1.35B
Operating Cash Flow	4.60B	4.27B	3.40B	2.72B	2.19B	1.79B
Investing Cash Flow	-1.80B	-2.50B	-2.17B	-2.58B	-1.61B	-1.51B
Financing Cash Flow	-1.48B	-1.34B	-803.00M	-344.00M	-506.00M	596.65M

ServiceNow Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1044.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOW, the sentiment is Positive. The current price of 1044.69 is above the 20-day moving average (MA) of 1007.93, above the 50-day MA of 997.09, and above the 200-day MA of 970.63, indicating a bullish trend. The MACD of 8.85 indicates Negative momentum. The RSI at 63.13 is Neutral, neither overbought nor oversold. The STOCH value of 74.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOW.

ServiceNow Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNOW	78 Outperform	$72.52B	―	-40.16%	―	27.50%	-49.96%
CRM	76 Outperform	$257.36B	42.11	10.31%	0.62%	7.97%	14.85%
NOW	75 Outperform	$209.61B	137.07	16.86%	―	21.01%	-20.93%
DDOG	73 Outperform	$46.63B	292.48	6.48%	―	25.54%	40.02%
WDAY	72 Outperform	$63.48B	131.28	5.70%	―	15.38%	-67.58%
TEAM	71 Outperform	$54.44B	―	-34.33%	―	19.12%	-161.42%
Sector *	69 Neutral	¥228.24B	14.40	7.64%	2.72%	9.13%	8.48%

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.

ServiceNow’s Paul Smith Resigns as President

On April 21, 2025, Paul Smith resigned as President of Global Customer and Field Operations at ServiceNow, effective April 23, 2025, with Paul Fipps succeeding him. ServiceNow reported strong financial results for Q1 2025, with subscription revenues of $3,005 million, marking a 19% year-over-year growth. The company continues to innovate with AI advancements and strategic acquisitions, such as Moveworks and Logik.ai, to enhance its platform capabilities. ServiceNow’s partnerships with companies like Aptiv and Vodafone Business further bolster its AI transformation efforts, while its recognition in industry assessments underscores its leadership in AI and innovation.