ServiceNow (NOW)
NYSE:NOW
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ServiceNow
(NYSE:NOW)
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Rating:72Outperform
Price Target:
$116.00
▲(15.37% Upside)
Action:ReiteratedDate:04/02/26
Score is driven by strong financial performance (profitability improvement, low leverage, and robust free cash flow) and a constructive earnings outlook with margin expansion guided for 2026. Offsetting factors are weak technical momentum (below key moving averages with negative MACD) and a stretched valuation (high P/E with no dividend support).
Positive Factors
Recurring subscription model & enterprise scale
ServiceNow’s subscription-first model and large-enterprise traction create durable revenue visibility. High RPO/CRPO and growing large deals imply multi-year contract renewals and upsell paths, supporting predictable cash flow, customer stickiness, and continued platform penetration across complex organizations.
Negative Factors
Revenue growth deceleration
A marked slowdown in TTM revenue growth reduces operating leverage over time. If sustained, the deceleration constrains margin expansion potential and forces management to rely more on M&A or pricing shifts to meet prior growth expectations, raising execution risk over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription model & enterprise scale
ServiceNow’s subscription-first model and large-enterprise traction create durable revenue visibility. High RPO/CRPO and growing large deals imply multi-year contract renewals and upsell paths, supporting predictable cash flow, customer stickiness, and continued platform penetration across complex organizations.
Read all positive factors
ServiceNow (NOW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$105.18B
Dividend YieldN/A
Average Volume (3M)16.19M
Price to Earnings (P/E)90.9
Beta (1Y)1.33
Revenue Growth21.05%
EPS Growth28.67%
CountryUS
Employees26,293
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.92
Shares Outstanding1,046,000,000
10 Day Avg. Volume13,585,395
30 Day Avg. Volume16,187,398
Financial Highlights & Ratios
PEG Ratio4.05
Price to Book (P/B)12.25
Price to Sales (P/S)11.96
P/FCF Ratio34.72
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue7.64
Enterprise Value/Gross Profit9.85
Enterprise Value/Ebitda33.62
Forecast
1Y Price Target
$181.90Price Target Upside80.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering35
EPS Forecast (FY)4.19
Revenue Forecast (FY)$15.98B
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, machin...
How the Company Makes Money
ServiceNow primarily makes money by selling subscriptions to its cloud software and related services. The largest revenue stream is recurring subscription revenue tied to access to the Now Platform and its workflow applications; customers generall...
ServiceNow Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where ServiceNow is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where ServiceNow is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyServiceNow Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
The call portrayed a strong finish to 2025 with multiple beats (revenue, RPO/CRPO, margins, free cash flow) and accelerated AI-driven monetization (Now Assist growth, workflows, partnerships). Management provided confident 2026 guidance with margin expansion and significant cash returns via a $5B repurchase authorization. Near-term headwinds include gross margin pressure from hyperscaler capacity and AI inference costs, a small mix-shift impact in Q1, and modest near-term dilution from announced security-focused acquisitions. On balance, the positives (robust growth, margin and cash-flow outperformance, large deal flow, accelerating AI adoption and partnerships) substantially outweigh the limited near-term challenges.Positive Updates
Subscription Revenue Growth and Beat
Q4 subscription revenues of $3,466,000,000, up 19.5% year-over-year in constant currency, exceeding the high end of guidance by ~150 basis points (company also cited a 21% subscription growth figure in commentary).
Negative Updates
Gross Margin Headwinds from Hyperscaler & AI Costs
Management cited gross margin pressure driven by incremental data center and public cloud investments and a shift toward hyperscaler capacity (hyperscaler arrangements currently yield slightly lower gross margins). LLM inference / API costs were discussed as a headwind but described as largely manageable and offset by OpEx efficiencies.
Read all updates
Q4-2025 Updates
Positive
Negative
Subscription Revenue Growth and Beat
Q4 subscription revenues of $3,466,000,000, up 19.5% year-over-year in constant currency, exceeding the high end of guidance by ~150 basis points (company also cited a 21% subscription growth figure in commentary).
Read all positive updates
Company Guidance
ServiceNow guided 2026 subscription revenues of $15,530M–$15,570M (≈19.5%–20% year‑over‑year CC growth, including a 1‑point contribution from Moveworks), subscription gross margin of 82%, non‑GAAP operating margin of 32% (up 100 bps YoY), and free cash flow margin of 36% (up 100 bps YoY and 350 bps ahead of the Financial Analyst Day target); GAAP diluted weighted average shares are expected to be ~1,050M. For Q1 2026 they guided subscription revenue of $3,650M–$3,655M (18.5%–19% YoY CC, including a 1‑pt contribution from Loopworks and a 1.5‑pt on‑prem→hosted mix headwind), CRPO growth of 20% CC (including a 1‑pt Moveworks benefit), and a 31.5% operating margin (with ~1,050M GAAP shares). They also expect Armis to close in H2 with roughly a 1‑pt subscription revenue contribution to 2026 (and up to a 50 bps operating‑margin headwind in 2026) and announced an incremental $5.0B share‑repurchase authorization with an immediate $2.0B ASR.ServiceNow Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
92
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 13.28B | 10.98B | 8.97B | 7.25B | 5.90B |
| Gross Profit | 10.29B | 8.70B | 7.05B | 5.67B | 4.54B |
| EBITDA | 3.00B | 2.23B | 1.59B | 768.00M | 729.00M |
| Net Income | 1.75B | 1.43B | 1.73B | 325.00M | 230.00M |
Balance Sheet | |||||
| Total Assets | 26.04B | 20.38B | 17.39B | 13.30B | 10.80B |
| Cash, Cash Equivalents and Short-Term Investments | 6.28B | 5.76B | 4.88B | 4.28B | 3.30B |
| Total Debt | 3.20B | 2.28B | 2.28B | 2.23B | 2.21B |
| Total Liabilities | 13.07B | 10.77B | 9.76B | 8.27B | 7.10B |
| Stockholders Equity | 12.96B | 9.61B | 7.63B | 5.03B | 3.69B |
Cash Flow | |||||
| Free Cash Flow | 4.58B | 3.42B | 2.70B | 2.17B | 1.79B |
| Operating Cash Flow | 5.44B | 4.27B | 3.40B | 2.72B | 2.19B |
| Investing Cash Flow | -1.69B | -2.50B | -2.17B | -2.58B | -1.61B |
| Financing Cash Flow | -2.34B | -1.34B | -803.00M | -344.00M | -506.00M |
ServiceNow Technical Analysis
Negative
100.55
Price Trends
110.33
Negative
132.86
Negative
159.61
Negative
Market Momentum
-3.42
Positive
36.95
Neutral
29.27
Neutral
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 100.55 is below the 20-day moving average (MA) of 108.40, below the 50-day MA of 110.33, and below the 200-day MA of 159.61, indicating a bearish trend. The MACD of -3.42 indicates Positive momentum. The RSI at 36.95 is Neutral, neither overbought nor oversold. The STOCH value of 29.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $105.18B | 90.88 | 15.42% | ― | 21.05% | 28.67% | |
71 Outperform | $168.87B | 27.05 | 12.37% | 0.63% | 8.41% | 22.92% | |
69 Neutral | $32.77B | 66.22 | 7.97% | ― | 13.35% | -60.76% | |
65 Neutral | $41.11B | 438.37 | 3.24% | ― | 26.63% | -46.13% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $17.16B | -250.38 | -13.32% | ― | 19.51% | 53.35% | |
56 Neutral | $51.59B | -48.84 | -60.27% | ― | 28.48% | -19.12% |
* Technology Sector Average
NOW
ServiceNow
100.55
-64.64
-39.13%
CRM
Salesforce
182.96
-80.49
-30.55%
WDAY
Workday
127.51
-103.91
-44.90%
TEAM
Atlassian
64.83
-144.79
-69.07%
DDOG
Datadog
116.54
19.10
19.60%
SNOW
Snowflake
149.24
-1.91
-1.26%
ServiceNow Corporate Events
Business Operations and StrategyPrivate Placements and Financing
ServiceNow Boosts Liquidity With New Credit and CP Programs
Positive
Apr 1, 2026
On April 1, 2026, ServiceNow entered into a $3 billion unsecured revolving credit facility maturing in 2031 with a bank syndicate led by JPMorgan Chase, with the option to increase commitments by up to $2 billion and to extend the maturity within ...
Business Operations and Strategy
ServiceNow CEO Plans Significant Insider Share Purchase
Positive
Feb 17, 2026
ServiceNow disclosed that several top executives, including Chairman and CEO William R. McDermott and other senior leaders, have terminated their Rule 10b5-1 trading plans, cancelling all future pre-planned sales of ServiceNow common stock by thes...
Business Operations and StrategyExecutive/Board Changes
ServiceNow Strengthens Finance Leadership With New Accounting Chief
Positive
Feb 11, 2026
On February 10, 2026, ServiceNow’s board appointed Danielle Fontaine as Chief Accounting Officer and Corporate Controller, effective February 17, 2026, while promoting outgoing chief accounting officer Kevin McBride to Executive Vice Preside...
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A TransactionsStock Split
ServiceNow tops Q4 guidance and accelerates AI expansion
Positive
Jan 28, 2026
On January 28, 2026, ServiceNow reported that it had exceeded its guidance across all fourth-quarter 2025 topline growth and profitability metrics, posting subscription revenue of $3.47 billion, up 21% year over year, and total revenue of $3.57 bi...
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.