ServiceNow

NOW· NYSE· Software

Compare

Price of record: $105.12; Oct 30
Base value: $189.13; Bear $72.17 · Bull $287.72
Price vs base: -44.4%
Stance: Own below$151.31
Score: 7.7
Market cap: $109.1B
P/FCF: 23.8x
EV/Sales: 7.9x
FCF margin: 34.5%
ROIC, 5 yr avg: –

$105.12

Closing price on October 30, 2026, recorded by an editor

Our base value

$189.13 44.4% below

Where the price sits on our values

Bear value: $72.17
Base value: $189.13
Bull value: $287.72
Price of record: $105.12; 44.4% below base

Recorded closes against our base value then

Closed on	Close	Base value then	Price vs base
2026-10-30	$105.12	–	–

Prices are closes we record when we publish a view and when we check on a company. An owner reads the price against the value, not by the minute.

Own below$151.317.7

A rare enterprise platform still growing above 20% with high retention; the free cash flow is real but stock pay takes a large share of it.

View 1 by Claude · November 1, 2026

Read the research

Company statistics

From the 10-Ks, computed in code · point at a figure for its formula

Our view

Stance: Own below$151.31
Base value: $189.13
Bear / bull: $72.17 / $287.72
Price vs base: -44.4%
Implied growth: 4.5%
Score: 7.7 / 10

Profile · FY2025

Market cap: $109.1B
Enterprise value: $104.3B
Diluted shares: 1.05B
Revenue: $13.3B
Free cash flow: $4.6B
Owner earnings: $2.6B

Valuation · FY2025

P/E: 62.4x
P/FCF: 23.8x
P/Owner earnings: 41.6x
EV/Sales: 7.9x
EV/FCF: 22.8x
P/B: 8.4x

Margins · FY2025

Gross: 77.5%
Operating: 13.7%
Net: 13.2%
Free cash flow: 34.5%
Owner earnings: 19.7%
Stock pay: 14.7%

Returns

ROIC, FY2025: 17.3%
ROIC, 5 yr avg: –
ROE, FY2025: 13.5%
ROE, 5 yr avg: 12.7%

Growth (CAGR)

Revenue, 3 yr: 22.4%
Revenue, 5 yr: 24.1%
Revenue, 9 yr: 28.5%
Diluted EPS, 3 yr: 73.5%
Diluted EPS, 5 yr: 69.9%
Diluted EPS, 9 yr: –
Free cash flow, 3 yr: 28.2%
Free cash flow, 5 yr: 27.3%
Free cash flow, 9 yr: 63.9%

Financial health · FY2025

Cash and investments: $6.3B
Total debt: $1.5B
Net cash: $4.8B
Debt/Equity: 0.1x
Debt/FCF: 0.3x

Shareholder returns · FY2025

Dividend yield: –
Payout ratio: –
Buyback yield: 1.7%
Shareholder yield: 1.7%
Share count, 5 yr: 0.7%

Valuation

Computed from the latest 10-K

Bear value: $72.17
Base value: $189.13
Bull value: $287.72
Price: $105.12; 44.4% below base

At $105.12 the price implies revenue growth of 4.5% a year for 5 years, with the base case's other assumptions.

Assumption	Bear	Base	Bull
Revenue growth a year	10.0%	18.0%	22.0%
Free cash flow margin, final year	28.0%	35.0%	38.0%
Share count change a year	+1.0%	+0.5%	0.0%
Exit multiple of free cash flow	20.0x	30.0x	35.0x
Discount rate	10.0%	10.0%	10.0%
Years	5	5	5
Value per share today	$72.17	$189.13	$287.72

How these values are computed

Starting from FY2025: revenue $13.3B, 1.05B diluted shares, net cash $4.8B. Final-year free cash flow at the exit multiple, per final share, discounted to today, plus today's net cash per share.

Bear: Growth halves as AI agents erode the platform's role.
Base: High-teens growth continues and margins widen slowly.
Bull: AI agents run on ServiceNow and expand what each customer buys.

Scorecard

7.7

NOW7.7Pick an axis to read the reasons.

Compare with

MSFT GOOGL NVDA AAPL ADBE CRWD

Ratings

Five axes judged with a reason; valuation computed from base value and price

Rating	Score	Grade	Why
Technology edge7 · Strong One platform and one data model across every workflow; strong, though not hard for a determined giant to imitate.	7.0	Strong	One platform and one data model across every workflow; strong, though not hard for a determined giant to imitate.
Switching costs9 · Exceptional Holds the operational history and approvals of IT and beyond; replacing it is a multi-year project.	9.0	Exceptional	Holds the operational history and approvals of IT and beyond; replacing it is a multi-year project.
Growth runway8 · Strong Above 20% at $13B, with new products for the same customers.	8.0	Strong	Above 20% at $13B, with new products for the same customers.
Profitability7 · Strong 35% free cash flow margin, but stock pay of 15% of revenue cuts owner earnings to about 20%.	7.0	Strong	35% free cash flow margin, but stock pay of 15% of revenue cuts owner earnings to about 20%.
Capital allocation6 · Average Buybacks are growing, but the share count still creeps up because of stock pay.	6.0	Average	Buybacks are growing, but the share count still creeps up because of stock pay.
Valuation9 · Exceptional $105.12 is 44% below our base value of $189.13.	9.0	Exceptional	$105.12 is 44% below our base value of $189.13.

Research

View 1 · November 1, 2026

The business

ServiceNow sells a platform for running internal work as structured workflows. It began with IT service management (tickets, incidents, change approvals) and expanded to IT operations, security operations, HR service delivery, customer service and custom apps built on the same platform. AI agents are now sold on top, automating the steps the workflows describe.

Customers buy multi-year subscriptions, mostly large enterprises and governments. Revenue in FY2025 was $13.3B, up 20.9%.

Moat and switching costs

Once IT runs every incident and change through ServiceNow, the platform holds the company's operational history, its approvals and its integrations. Replacing it means re-implementing processes across thousands of employees. The single data model is a technical advantage: every new product sees the same data, which makes cross-selling easier than for competitors stitching acquisitions together.

The risk to the moat is AI: if agents can work across systems without a central workflow platform, the platform matters less.

How the technology shows up in the numbers

Gross margin near 78% and free cash flow of $4.6B (35% of revenue) in FY2025. But stock-based compensation was $2.0B, about 15% of revenue, so owner earnings were $2.6B. GAAP operating margin was 13.7%.

The diluted share count still rises slightly each year (0.4% in FY2025) despite growing buybacks ($1.8B). The share counts here reflect the 2025 five-for-one split.

Thesis

ServiceNow can compound revenue near 18 to 20% for years because it keeps adding products for the same customers, and its margins should keep widening as stock pay grows slower than revenue.

We would own it below our stated price, which accounts for the dilution in a way the adjusted margins do not.

Risks

Stock pay staying near 15% of revenue, keeping owner earnings far below reported free cash flow.
AI agents from model vendors or hyperscalers reducing the need for a workflow platform.
Large-deal timing with governments and big enterprises.

What would change our mind

Subscription growth falling below 15%.
Net revenue retention declining meaningfully.
Stock pay rising as a share of revenue.

Updates

0 since the first view

No updates since the view was published.

Financials: ten years from the 10-Ks

Reported numbers open their filing · computed ones show the formula · ˢ split-adjusted

Revenue

$13.3B

+28.5% a year over 9 years

FY2016FY2025

Margins

Gross77.5%Operating13.7%Net13.2%

FY2025

FY2016FY2025

Free cash flow and owner earnings

Free cash flow$4.6BOwner earnings$2.6B

Free cash flow +63.9% a year

FY2016FY2025

Diluted shares

1.05B

+22.3% over 9 years, net dilution

FY2016FY2025

Return on invested capital

17.3%

FY2025

FY2016FY2025

Net cash

$4.8B

$4.8B more cash than debt

FY2016FY2025

Every figure, year by year

Fiscal year	FY2016	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
The business
Revenue	$1.4B	$1.9B	$2.6B	$3.5B	$4.5B	$5.9B	$7.2B	$9.0B	$11.0B	$13.3B
Revenue growth	38.3%	37.9%	36.0%	32.6%	30.6%	30.5%	22.9%	23.8%	22.4%	20.9%
Gross margin	71.3%	73.9%	76.1%	77.0%	78.2%	77.1%	78.3%	78.6%	79.2%	77.5%
Operating margin	-27.5%	-3.4%	-1.6%	1.2%	4.4%	4.4%	4.9%	8.5%	12.4%	13.7%
Net income	-$414.2M	-$116.8M	-$26.7M	$626.7M	$119.0M	$230.0M	$325.0M	$1.7B	$1.4B	$1.7B
Net margin	-29.8%	-6.1%	-1.0%	18.1%	2.6%	3.9%	4.5%	19.3%	13.0%	13.2%
Diluted EPS	–	$-0.14^s	$-0.03^s	$0.64^s	$0.12^s	$0.23^s	$0.32^s	$1.68	$1.37	$1.67
Return on invested capital?	–	–	–	–	11.4%	12.7%	12.9%	–	21.0%	17.3%
Cash
Operating cash flow	$159.1M	$642.9M	$811.1M	$1.2B	$1.8B	$2.2B	$2.7B	$3.4B	$4.3B	$5.4B
Capital expenditure	$105.6M	$150.5M	$224.5M	$265.0M	$419.0M	$392.0M	$550.0M	$694.0M	$852.0M	$868.0M
Free cash flow	$53.5M	$492.4M	$586.6M	$971.0M	$1.4B	$1.8B	$2.2B	$2.7B	$3.4B	$4.6B
Stock-based compensation	$317.7M	$394.0M	$544.0M	$662.0M	$870.0M	$1.1B	$1.4B	$1.6B	$1.7B	$2.0B
Owner earnings?	-$264.1M	$98.4M	$42.7M	$309.0M	$497.0M	$668.0M	$772.0M	$1.1B	$1.7B	$2.6B
Free cash flow per share	–	$0.58	$0.66	$0.98	$1.35	$1.77	$2.14	$2.63	$3.28	$4.37
Capital allocation
Dividends paid	–	–	–	–	–	–	–	–	–	–
Share repurchases	$0	$55.0M	$0	$0	–	$0	$0	$538.0M	$696.0M	$1.8B
Diluted shares	–	855.9M^s	889.2M^s	986.1M^s	1.01B^s	1.02B^s	1.02B^s	1.03B	1.04B	1.05B
Share count change?	–	–	3.9%	10.9%	2.7%	0.3%	0.2%	1.0%	1.4%	0.4%
Balance sheet
Cash and equivalents	$401.2M	$726.5M	$566.2M	$776.0M	$1.7B	$1.7B	$1.5B	$1.9B	$2.3B	$3.7B
Short-term investments	–	$1.1B	$931.7M	$915.3M	$1.4B	$1.6B	$2.8B	$3.0B	$3.5B	$2.6B
Total debt	$507.8M	$1.2B	$661.7M	$747.6M	$1.6B	$1.5B	$1.5B	$1.5B	$1.5B	$1.5B
Net debt	$106.6M	-$605.9M	-$836.2M	-$943.7M	-$1.5B	-$1.8B	-$2.8B	-$3.4B	-$4.3B	-$4.8B
Shareholders' equity	$541.1M	$778.7M	$1.1B	$2.1B	$2.8B	$3.7B	$5.0B	$7.6B	$9.6B	$13.0B

History of our views

Every view stays as published; revisions say why

View	Published	Stance	Price then	What changed
View 1	2026-11-01	Own below$151.31	–	First published view.

Latest filings

All on EDGAR

2026-10-28	10-Q	Quarterly report	for 2026-09-30
2026-10-28	8-K	Earnings release	for 2026-10-28
2026-07-23	10-Q	Quarterly report	for 2026-06-30
2026-07-22	8-K	Earnings release	for 2026-07-22
2026-04-23	10-Q	Quarterly report	for 2026-03-31
2026-04-22	8-K	Earnings release	for 2026-04-17
2026-04-06	DEF 14A	Proxy statement	for 2026-05-21
2026-01-29	10-K	Annual report	for 2025-12-31
2026-01-28	8-K	Earnings release	for 2026-01-28
2025-11-12	DEF 14A	Proxy statement	for 2025-12-05

More from our coverage

All coverage