NOWNOW
US • TECHNOLOGY
$98.78
P/E
61.67
PEG
0.83
FCF Yield
5.2%
Rev Growth YoY
+24.0% YoY
Gross Margin
74.8%
Health Score
8/10
D/E Ratio
0.12
Confidence
MEDIUM
Business Snapshot
ServiceNow provides a cloud-based platform for enterprise IT service management, automating workflows across IT, customer service, and employee operations. Its Now Platform competes in the large and growing IT operations management market, and its established enterprise customer base positions it as a dominant player in the space. With a market capitalisation of $95.05 billion and TTM revenue of $14.73 billion, ServiceNow is a large-cap technology firm with significant financial scale. A defining characteristic is its high switching costs: once an enterprise deploys ServiceNow's platform for core IT workflows, replacing it is complex and expensive, creating a durable competitive moat.
Financial Health
Gross margin stands at a robust 74.8%, and net margin is 11.3%, indicating the company retains a healthy portion of revenue as profit after all expenses. The balance sheet is conservative, with a debt-to-equity ratio of just 0.12x and a current ratio of 1.0x, suggesting ample liquidity and low financial leverage...
Risk Assessment
- VALUATION — P/E ratio of 61.67x is nearly 3x the sector average of 22x, pricing in substantial future growth that may not materialise.
- EARNINGS QUALITY — Earnings growth declined by 21.5% year-over-year, creating a disconnect with the strong revenue growth and raising questions about cost control.
- TECHNICALS — Price is below both its 50-day MA of $103.92 and its 200-day MA of $127.12, confirming an established downtrend.
- 52-WEEK POSITION — The current price of $98.78 is 50.9% below the 52-week high of $201.15, reflecting a substantial pullback from peak levels.
- INSIDER — 2 insider sells vs 0 buys over the last 90 days signals a lack of conviction from those closest to the business at current levels....
Gross margin stands at a robust 74.8%, and net margin is 11.3%, indicating the company retains a healthy portion of revenue as profit after all expenses. The balance sheet is conservative, with a debt-to-equity ratio of just 0.12x and a current ratio of 1.0x, suggesting ample liquidity and low financial leverage. The company generated strong free cash flow of $4.92 billion, which translates to a free cash flow yield of 5.2%, well above many peers in the high-growth software space. This cash generation provides ServiceNow with significant financial flexibility, supporting growth investments and the potential for shareholder returns without resorting to debt or dilution.
- VALUATION — P/E ratio of 61.67x is nearly 3x the sector average of 22x, pricing in substantial future growth that may not materialise. - EARNINGS QUALITY — Earnings growth declined by 21.5% year-over-year, creating a disconnect with the strong revenue growth and raising questions about cost control. - TECHNICALS — Price is below both its 50-day MA of $103.92 and its 200-day MA of $127.12, confirming an established downtrend. - 52-WEEK POSITION — The current price of $98.78 is 50.9% below the 52-week high of $201.15, reflecting a substantial pullback from peak levels. - INSIDER — 2 insider sells vs 0 buys over the last 90 days signals a lack of conviction from those closest to the business at current levels.
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