ServiceNow, Inc. (NOW) stock analysis
Close on Nov 11, 2026Market cap $106.67BP/E 73.9Yield –
StockData Score
Prices as of Nov 11, 2026How the score works
Mixed14 of 30 checks passed
ServiceNow passes 14 of the 30 checks behind our score; 6 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 2/6
- Growth
- 4/6
- Past performance
- 4/6
- Financial health
- 4/6
- Dividend
- 0/6
What stands out
Return on capital over 10%
Return on invested capital was 13.0%, above the 10% that usually covers the cost of capital.
Low debt
Debt is 15.9% of shareholders' equity, under the 40% we consider low.
Earnings grew over 5 years
Net income grew 71.2% a year on average over the last five fiscal years.
Revenue growing 10%+ a year
Revenue grew 22.4% a year over the last three fiscal years.
What to watch
Margin of safety under 20%
The price is 41.8% above fair value, so there is no margin of safety.
Trading above fair value
The share price of $102.76 is above our fair value estimate of $72.48.
Return on equity under 15%
Return on equity was 11.8% over the last twelve months and averaged 14.8% over five years; we look for 15% on both.
Earnings growth not accelerating
Net income grew -16.5% over the last twelve months, against a 5-year average of 71.2% a year.
Valuation2/6
P/E below its 5-year median
ServiceNow's P/E of 73.9 is below its own 5-year median of 120.7.
P/E above the industry
ServiceNow's P/E of 73.9 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.
EV/EBITDA below its 5-year median
ServiceNow's EV/EBITDA of 37.7 is below its 5-year median of 108.9.
P/B above the industry
ServiceNow's price-to-book of 8.14 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.
Trading above fair value
The share price of $102.76 is above our fair value estimate of $72.48.
Margin of safety under 20%
The price is 41.8% above fair value, so there is no margin of safety.
Growth4/6
Revenue growing 10%+ a year
Revenue grew 22.4% a year over the last three fiscal years.
EPS growing 10%+ a year
Diluted EPS grew 73.5% a year over the last three fiscal years.
Earnings growth not accelerating
Net income grew -16.5% over the last twelve months, against a 5-year average of 71.2% a year.
Growing faster than the industry
Revenue grew 21.8% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.
Guidance raised
ServiceNow raised its Full-Year 2026 Subscription revenues outlook on Jul 22, 2026.
Gross margin slipping
Gross margin was 73.1% over the last twelve months, against 78.1% a year earlier.
Past performance4/6
Return on equity under 15%
Return on equity was 11.8% over the last twelve months and averaged 14.8% over five years; we look for 15% on both.
Return on capital over 10%
Return on invested capital was 13.0%, above the 10% that usually covers the cost of capital.
Return on equity above the industry
ServiceNow's return on equity of 11.8% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.
Earnings grew over 5 years
Net income grew 71.2% a year on average over the last five fiscal years.
Net margin below its 5-year average
Net margin was 9.4% over the last twelve months, against a 5-year average of 10.8%.
Net margin above the industry
ServiceNow's net margin of 9.4% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.
Financial health4/6
Low debt
Debt is 15.9% of shareholders' equity, under the 40% we consider low.
Debt falling against equity
Debt to equity fell from 57.9% five years ago to 15.9%.
Debt covered by cash flow
Operating cash flow over the last twelve months equals 256% of total debt.
Interest coverage
Interest expense is not reported separately.
Short-term assets don't cover short-term debts
Current assets are 0.72 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 4.21; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
ServiceNow has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$72.48
The share price is 42% above this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/E | 45.0× | 120.7× | 27.6× | $62.55 | 40% |
| EV/EBITDA | 30.0× | 108.9× | 18.8× | $82.20 | 35% |
| P/B | 11.4× | 19.4× | 3.3× | $144.24 | 10% |
| Earnings power | 12.7% cost of equity | – | – | $28.43 | 15% |
| Fair value | $72.48 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Own 5-year median 121
- Computer Programming, Data Processing, and Other Computer Related Services median 27.6
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Low risk
- Average value traded per day
- $2.14B
- Value traded per 1% price move
- $799.11M
Downside
High risk
- Typical loss in a bad month
- 27.9%
- Volatility (annualized)
- 64%
- Sharpe ratio, 1 year
- -0.70
- Beta to the S&P 500 (5Y)
- 1.56
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2010 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | +20.9% | +22.4% | +24.1% | +29.4% | |
| Gross profit | +18.4% | +22.0% | +23.9% | +31.3% | |
| Operating income | +33.7% | +72.6% | +55.8% | – | |
| Net income | +22.7% | +75.2% | +71.2% | – | |
| EPS, diluted | +21.9% | +73.5% | +69.9% | – | |
| Free cash flow | +34.0% | +28.2% | +27.3% | +34.8% |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | -74.8% | 4.8% | 15.5% | |
| Return on assets | -21.6% | 1.6% | 7.5% | |
| Current ratio | 1.25 | 1.21 | 1.00 | |
| Debt to equity | – | 0.58 | – | |
| Net debt to EBITDA | – | -0.07× | – | |
| Interest coverage | -11.5× | 6.0× | – | |
| Capex to revenue | 7.6% | 9.3% | 6.5% | |
| Diluted shares | 823M | 1.01B | 1.05B |
Where the cash went
Fiscal 2021 to 2025, five years combined
ServiceNow generated $18.02B from operations and spent $6.43B on capital expenditure, dividends and share buybacks. 52% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | 13.2% | 0.57× | 2.06× | 15.5% |
| FY2024 | 13.0% | 0.58× | 2.19× | 16.5% |
| FY2023 | 19.3% | 0.58× | 2.42× | 27.3% |
| FY2022 | 4.5% | 0.60× | 2.76× | 7.4% |
| FY2021 | 3.9% | 0.60× | 2.99× | 7.0% |
| FY2020 | 2.6% | 0.61× | 2.97× | 4.8% |
| FY2019 | 18.1% | 0.70× | 3.06× | 38.7% |
| FY2018 | -1.0% | 0.70× | 3.93× | -2.8% |
| FY2017 | -6.1% | 0.69× | 4.23× | -17.7% |
| FY2016 | -29.8% | 0.72× | 3.47× | -74.8% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero$1.75B
- Cash generatingOperating cash flow above zero$5.44B
- Return on assets improvedROA up on the prior year8.2% → 8.6%
- Earnings backed by cashOperating cash flow above net income$5.44B vs $1.75B
- Less leverageLong-term debt to assets fell– → –
- Better liquidityCurrent ratio rose1.10 → 1.00
- No dilutionShare count did not rise1.04B → 1.05B
- Gross margin improvedGross margin up on the prior year79.18% → 77.53%
- More efficientAsset turnover rose0.63 → 0.65
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