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what it is
ServiceNow sells software that gets big companies to route work through one system instead of 47 spreadsheets and a panic attack.
how it gets paid
Last year Servicenow made $13.3B in revenue. IT workflows was the main engine at $5.6B, or 42% of sales.
why it's growing
Revenue grew 20.9% last year. Servicenow maintains a strong renewal rate and has benefited from client upselling to greater levels of service.
what just happened
ServiceNow reported EPS of $0.38 versus a $0.44 estimate, a 13.64% miss.
At a glance
A balance sheet — strong enough to weather a downturn
30/100 earnings predictability — expect surprises
74.9x trailing p/e — you're paying up for this one
34.0% return on capital — every dollar works hard here
xvary composite: 65/100 — average
What they do
ServiceNow sells software that gets big companies to route work through one system instead of 47 spreadsheets and a panic attack.
ServiceNow becomes your company’s work dashboard for IT, support, and approvals. Once your workflows live there, leaving means rebuilding the plumbing. That stickiness shows up in numbers: revenue reached $13.3 billion in the last year, up 20.9%, while return on capital hit 34.0%.
How they make money
$13.3B
annual revenue · their business grew +20.9% last year
IT workflows
$5.6B
customer and employee workflows
$3.2B
creator and platform workflows
$2.6B
subscription and support
$1.48B
professional services and other
$0.42B
The products that matter
enterprise workflow platform
ServiceNow Platform
$13.3B company revenue
this platform is the whole story on the current page. it supports a $13.3B revenue business with 25.6% operating margin, which tells you the core product is already scaled.
the core engine
ai workflow add-ons
Now Assist
no standalone revenue breakout
the source copy ties recent contract momentum to now assist adoption, but it does not provide a revenue number. that makes this a real growth lever and a thinly disclosed one.
ai upsell
higher-tier enterprise deals
Pro Plus
linked to contract value
the page says pro plus deals helped sustain growth and lift annual contract values. you should care because premium tiers are how software companies defend growth without needing a flood of brand-new customers.
pricing lever
Key numbers
74.9x
trailing p/e
P/E, or price divided by earnings, tells you how much you pay for each $1 of profit. You are paying $74.90 for $1.
$13.3B
annual revenue
This is already a huge software business, which makes the next leg of growth harder than when it was a smaller story stock.
13.7%
operating margin
Operating margin, or profit after running the business, shows how much is left from sales. 13.7% is solid, but it is not 74.9x solid.
34.0%
return on capital
Return on capital, or profit generated from money invested in the business, shows quality. 34.0% says ServiceNow is very good at turning investment into profit.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- long-term debt $1.5B (1% of capital)
- net profit margin 22.0% — keeps 22 cents of every dollar in revenue
- return on equity 36% — $0.36 profit for every $1 investors have put in
A with balance sheet grade and net profit margin standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in NOW 3 years ago → it's now worth $15,340.
The index would have given you $14,770.
source: institutional data · total return
What just happened
missed estimates
ServiceNow reported EPS of $0.38 versus a $0.44 estimate, a 13.64% miss.
Revenue still reached $13.3 billion for the year, up 20.9%, and gross margin was 77.9%. The business kept growing, but the quarter reminded you this stock gets judged like a perfectionist’s report card.
$3.5B
revenue
$0.38
eps
77.9%
gross margin
the number that mattered
The 13.64% EPS miss mattered most because a stock at 74.9x earnings does not get the luxury of being a little off.
-
servicenow likely delivered solid fourth-quarter results.revenues probably expanded to around $3.59 billion, aided by robust subscription growth and momentum in ai offerings.
-
the company likely gained from strong contract renewals, particularly in its now assist products.pro plus deals probably sustained their growth, as customers increasingly adopted multiple ai products.
-
more contracts likely had higher levels of service, helping to boost annual contract values.we think expenses increased modestly as ai-driven efficiencies provided operational leverage, but the government shutdown affected the timing of some u.s. federal deals. overall, we think these factors probably allowed earnings to reach $0.48 per share during the quarter.
-
the outlook for 2026 remains promising.
-
the top line should rise at a healthy clip, as subscription renewals have been high.servicenow maintains a strong renewal rate and has benefited from client upselling to greater levels of service. enterprise customers are increasingly adopting servicenow offerings as their ai system of choice, further boosting the top line during renewals.
source: company earnings report, 2026
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What could go wrong
the #1 risk here is paying 74.9x earnings into a growth slowdown. the business can stay good and the stock can still get hit if the market stops treating NOW like elite software.
med
multiple compression
the stock trades at 74.9x trailing earnings while earnings predictability is only 30/100. that is a rich price attached to a less-than-clean earnings path.
if growth keeps looking closer to 4.2% than 36.7%, the multiple is the first thing the market cuts.
med
antitrust review of the planned acquisition
the page says the u.s. justice department is conducting an in-depth review. when regulators get involved, timelines stretch and strategic plans get less flexible.
the immediate damage is not just deal uncertainty. it is management attention getting pulled away while investors already question the premium valuation.
med
ai upsell execution
the current page leans on now assist and pro plus momentum, but does not give you a revenue breakout. that means part of the bull case rests on products the source data does not fully quantify.
if AI adoption disappoints, the company still has a good platform. it just loses one of the cleanest arguments for staying expensive.
med
federal deal timing and enterprise budgets
the page notes some u.s. federal deals were affected by shutdown-related timing. for software names with premium multiples, delayed deals still matter even when they are only delayed.
this is the kind of temporary issue that can still pressure a stock already sitting roughly 47% below its $240 high.
with the stock at $127.31, far below the $240 high, and still trading at 74.9x earnings, you do not need a broken business to get a broken stock.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarterly print
watch whether revenue and EPS keep beating while the market still asks the same question: is this a premium story or a decelerating one.
metric
revenue path to $15B
the fy2026 revenue estimate is $15B versus $13.3B last year. if that gap starts closing, the valuation has support. if it slips, it does not.
risk
doj acquisition review
regulatory process matters here because a premium stock does not need a blocked deal to sell off. a delayed one can do the job.
trend
institutional flow
three straight quarters of net buying helped offset weak sentiment. if that support fades, you lose one of the cleaner confidence signals on the page.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak, analysts see a stock moving with the market, not one sending a loud near-term signal.
risk profile
average
stability score 3 means NOW is neither a bunker nor a grenade. the valuation is the bigger risk than the balance sheet.
chart momentum
top 20%
technical score 2 points to above-average price action from here. that tells you traders see life even while fundamental investors still argue about the multiple.
earnings predictability
30 / 100
earnings are harder to model here than the premium multiple suggests. if you own it, expect cleaner software economics than earnings cadence.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 1,195 buyers vs. 904 sellers in 3q2025. total institutional holdings: 0.9B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$106
$230
$127
current price
$168
target midpoint · +32% from current · 3-5yr high: $265 (+110% · 20% ann'l return)
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