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ServiceNow
(NYSE:NOW)
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Rating:69Neutral
Price Target:
$122.00
▲(23.51% Upside)
Action:Downgraded
Date:07/23/26
The score is driven primarily by strong financial fundamentals (scaling revenue, high margins, and robust cash generation) and a constructive earnings update with durable demand signals and modestly raised guidance. These positives are tempered by weak technicals (price below key moving averages with negative momentum) and a premium valuation that leaves less margin for error, plus watch items around higher debt and near-term margin/FCF variability.
Positive Factors
Scaled Subscription Revenue
Multi-year revenue scaling reflects durable demand for ServiceNow’s cloud subscription model and strong enterprise adoption. Recurring contracts and multi-year deals support predictable cash flows, while scale enables continued investment in product and sales without reliance on one-time transactions.
Negative Factors
Rising Total Debt (TTM)
A material near‑term increase in total debt reduces financial flexibility and raises interest and refinancing risk if sustained. Higher leverage can limit strategic options and elevate sensitivity to cash flow variability, particularly if growth or margins soften versus expectations.
Read all positive and negative factors
Positive Factors
Negative Factors
Scaled Subscription Revenue
Multi-year revenue scaling reflects durable demand for ServiceNow’s cloud subscription model and strong enterprise adoption. Recurring contracts and multi-year deals support predictable cash flows, while scale enables continued investment in product and sales without reliance on one-time transactions.
Read all positive factors
ServiceNow Key Performance Indicators (KPIs)
Any
Revenue by Geography
Splits revenue across regions, showing where ServiceNow is strongest and where it faces growth opportunities or risks from economic conditions and currency swings. Geographic trends help assess exposure to regional slowdowns and the company’s success in international expansion.
Splits revenue across regions, showing where ServiceNow is strongest and where it faces growth opportunities or risks from economic conditions and currency swings. Geographic trends help assess exposure to regional slowdowns and the company’s success in international expansion.
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The Fly
The FlyServiceNow (NOW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$113.81B
Dividend YieldN/A
Average Volume (3M)22.71M
Price to Earnings (P/E)69.1
Beta (1Y)1.36
Revenue Growth22.19%
EPS Growth0.19%
CountryUS
Employees29,187
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.61
Shares Outstanding1,034,000,000
10 Day Avg. Volume25,186,925
30 Day Avg. Volume22,709,058
Financial Highlights & Ratios
PEG Ratio4.04
Price to Book (P/B)12.25
Price to Sales (P/S)11.96
P/FCF Ratio34.72
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$139.80Price Target Upside41.53% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering31
EPS Forecast (FY)4.07
Revenue Forecast (FY)$16.21B
ServiceNow Business Overview & Revenue Model
Company Description
ServiceNow, Inc. specializes in delivering cloud-based solutions designed to streamline and automate critical business services for organizations across the globe. Its flagship "Now Platform" serves as the foundation, leveraging technologies such ...
How the Company Makes Money
ServiceNow primarily makes money by selling subscriptions to its cloud software platform and related workflow applications. Revenue is predominantly generated from (1) subscription and support fees, where customers pay recurring charges (typically...
ServiceNow Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operational and financial results with broad-based demand, accelerating AI monetization, large deal momentum and profitability outperformance. Management raised FY guidance modestly while calling out that part of the beat was timing-related (on‑prem pull‑forward) and acknowledged short-term gross margin pressure from hyperscaler and AI consumption ramps. Key risks include near-term margin variability, integration and headcount impacts from recent acquisitions, and general competitive/market noise, but management emphasized durable renewal rates, platform differentiation and robust AI/security tailwinds.Positive Updates
Strong Subscription Revenue Growth
Subscription revenues of $3.877 billion in Q2, up 23% year-over-year in constant currency and ~150 basis points above the high end of guidance.
Negative Updates
Short-term Gross Margin Pressure from Hyperscaler & AI Consumption Ramp
Management acknowledged short-term pressure on subscription gross margin driven by faster-than-expected hyperscaler ramp and increased AI consumption. Guidance assumes mid-term improvement but near-term margin headwinds exist.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Subscription Revenue Growth
Subscription revenues of $3.877 billion in Q2, up 23% year-over-year in constant currency and ~150 basis points above the high end of guidance.
Read all positive updates
Company Guidance
ServiceNow modestly raised full‑year 2026 subscription revenue guidance by $15 million at the midpoint to $15.770 billion (about 21% year‑over‑year constant‑currency), and expects FY subscription gross margin of 81%, non‑GAAP operating margin of 31.5%, free cash flow margin of 35% and GAAP diluted weighted‑average shares of ~1.04 billion; for Q3 the company guided subscription revenue of $3.975–3.980 billion (≈20% YoY CC), CRPO growth of 20% CC, an operating margin of 31% and ~1.05 billion GAAP diluted shares. The raise follows a strong Q2 beat (subscription revenue $3.877 billion, +23% YoY CC and ~150 bps above the high end of guidance; CRPO/current RPO growth 21.5%/21.5% CC with RPO ≈$29B and current RPO $13.2B; non‑GAAP operating margin 29.5% and Q2 free cash flow margin 16%), alongside deal and adoption momentum (123 deals >$1M, +40% YoY; 658 customers >$5M ACV; 98% renewal rate; ServiceNow AI ACV >$1B and tracking to $1.5B by year‑end; agentic AI in production up 9x in 9 months; and AI pegged to reach ~30% of ACV by 2030, with early tracking ahead).ServiceNow Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
74
Positive
Cash Flow
79
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 14.73B | 13.28B | 10.98B | 8.97B | 7.25B | 5.90B |
| Gross Profit | 11.02B | 10.29B | 8.70B | 7.05B | 5.67B | 4.54B |
| EBITDA | 3.49B | 3.00B | 2.23B | 1.59B | 768.00M | 749.00M |
| Net Income | 1.67B | 1.75B | 1.43B | 1.73B | 325.00M | 230.00M |
Balance Sheet | ||||||
| Total Assets | 31.67B | 26.04B | 20.38B | 17.39B | 13.30B | 10.80B |
| Cash, Cash Equivalents and Short-Term Investments | 4.66B | 6.28B | 5.76B | 4.88B | 4.28B | 3.30B |
| Total Debt | 8.45B | 2.40B | 2.28B | 2.28B | 2.23B | 2.21B |
| Total Liabilities | 19.15B | 13.07B | 10.77B | 9.76B | 8.27B | 7.10B |
| Stockholders Equity | 12.52B | 12.96B | 9.61B | 7.63B | 5.03B | 3.69B |
Cash Flow | ||||||
| Free Cash Flow | 4.58B | 4.58B | 3.42B | 2.70B | 2.17B | 1.79B |
| Operating Cash Flow | 5.31B | 5.44B | 4.27B | 3.40B | 2.72B | 2.19B |
| Investing Cash Flow | -8.15B | -1.69B | -2.50B | -2.17B | -2.58B | -1.61B |
| Financing Cash Flow | 2.24B | -2.34B | -1.34B | -803.00M | -344.00M | -506.00M |
ServiceNow Technical Analysis
Positive
98.78
Price Trends
105.62
Positive
102.27
Positive
124.92
Negative
Market Momentum
-1.36
Positive
45.70
Neutral
15.98
Positive
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 98.78 is below the 20-day moving average (MA) of 105.86, below the 50-day MA of 105.62, and below the 200-day MA of 124.92, indicating a neutral trend. The MACD of -1.36 indicates Positive momentum. The RSI at 45.70 is Neutral, neither overbought nor oversold. The STOCH value of 15.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOW.
ServiceNow Risk Analysis
ServiceNow disclosed 27 risk factors in its most recent earnings report. ServiceNow reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ServiceNow Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $148.00B | 21.22 | 14.95% | 1.30% | 10.98% | 34.24% | |
77 Outperform | $95.60B | 696.39 | 3.78% | ― | 29.54% | -21.11% | |
72 Outperform | $39.05B | 49.80 | 10.41% | ― | 13.70% | 76.27% | |
69 Neutral | $113.81B | 69.09 | 13.77% | ― | 22.19% | 0.19% | |
66 Neutral | $103.32B | -83.32 | -57.21% | ― | 31.07% | 16.46% | |
62 Neutral | $24.90B | -121.57 | -16.70% | ― | 24.74% | 49.81% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
NOW
ServiceNow
111.23
-73.37
-39.75%
CRM
Salesforce
184.02
-66.18
-26.45%
WDAY
Workday
160.34
-64.78
-28.78%
TEAM
Atlassian
101.02
-84.68
-45.60%
DDOG
Datadog
267.97
128.84
92.60%
SNOW
Snowflake
293.28
84.80
40.68%
ServiceNow Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
ServiceNow Shareholders Approve Expanded Equity Incentive Plan
Positive
May 22, 2026
On May 21, 2026, ServiceNow held its 2026 Annual Shareholders Meeting, where investors approved amendments to the company’s 2021 Equity Incentive Plan, increasing the available share reserve by 38,000,000 shares to support ongoing equity-bas...
Private Placements and FinancingRegulatory Filings and Compliance
ServiceNow Completes $4 Billion Multi-Tranche Debt Offering
Positive
May 15, 2026
On May 15, 2026, ServiceNow, Inc. completed a $4 billion multi-tranche debt offering, issuing notes maturing between 2028 and 2056 at coupon rates ranging from 4.250% to 6.300%. The issuance was conducted under an existing shelf registration and s...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.