ServiceNow (NOW) AI Stock Analysis

• Market Cap: $169.69B
• Dividend Yield: N/A
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 98.7
• Beta (1Y): 1.50
• 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: 208,000,000
• 10 Day Avg. Volume: 1,445,150
• 30 Day Avg. Volume: 1,456,640
• 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: 1.12
• 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: 41.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29
• EPS Forecast (FY): 17.37
• Revenue Forecast (FY): $13.24B

• Rating: 69 Neutral
• Price Target: $896.00 ▲(9.83% Upside)

ServiceNow's overall stock score is driven by its strong financial performance and positive earnings call, which highlight robust growth and strategic positioning in AI and workflow integration. However, the high valuation and bearish technical indicators temper the score, reflecting potential risks if growth expectations are not met. The absence of a dividend yield further limits its appeal to income-focused investors.

Positive Factors

Revenue Growth

Strong subscription revenue growth indicates robust demand for ServiceNow's solutions, supporting long-term business expansion and market leadership.

AI Product Expansion

The rapid growth in AI product adoption showcases ServiceNow's innovation and ability to capture emerging market opportunities, enhancing its competitive edge.

Federal Business Growth

Strong performance in the federal sector highlights ServiceNow's strategic positioning and potential for sustained growth in a stable, lucrative market.

Negative Factors

Margin Pressures

Decreasing margins may indicate rising costs or pricing pressures, which could affect profitability if not managed effectively over the long term.

Slowing Cash Flow Growth

Slower cash flow growth could constrain ServiceNow's ability to fund new initiatives and investments, potentially impacting future growth prospects.

Public Sector Uncertainty

Government shutdowns can delay procurement processes, affecting revenue recognition and growth in the public sector, a key market for ServiceNow.

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: Negative
• Last Price: 815.84
• 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 815.84 is below the 20-day moving average (MA) of 864.82, below the 50-day MA of 900.63, and below the 200-day MA of 920.88, indicating a bearish trend. The MACD of -27.30 indicates Positive momentum. The RSI at 32.34 is Neutral, neither overbought nor oversold. The STOCH value of 18.83 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
CRM	71 Outperform	$215.93B	32.94	11.20%	0.73%	8.33%	19.69%
NOW	69 Neutral	$169.69B	98.65	16.81%	―	21.05%	28.68%
DDOG	69 Neutral	$55.56B	536.72	3.52%	―	26.63%	-46.13%
WDAY	67 Neutral	$60.51B	104.81	6.66%	―	14.21%	-62.56%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SNOW	61 Neutral	$81.99B	―	-42.45%	―	28.37%	-35.49%
TEAM	59 Neutral	$38.68B	―	-15.35%	―	19.51%	53.35%

ServiceNow Corporate Events

ServiceNow’s Earnings Call Highlights Robust Growth and Optimism

ServiceNow Inc.’s recent earnings call painted a generally positive picture, highlighting strong subscription revenue growth, increased guidance, and notable achievements in AI products and federal business. Despite concerns about the government shutdown affecting Q4 and on-prem dynamics, the positive aspects overshadowed these issues, indicating robust business performance and confidence in future growth.

ServiceNow’s Strong Q3 2025 Performance and Strategic Moves

ServiceNow Inc., a leader in AI-driven business transformation, provides innovative solutions across various industries, enhancing productivity and business outcomes through its comprehensive AI platform.

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.

The most recent analyst rating on (NOW) stock is a Buy with a $1200.00 price target. To see the full list of analyst forecasts on ServiceNow stock, see the NOW Stock Forecast page.

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.

The most recent analyst rating on (NOW) stock is a Buy with a $1250.00 price target. To see the full list of analyst forecasts on ServiceNow stock, see the NOW Stock Forecast page.