NOWNOW
US • TECHNOLOGY
$99.28
P/E
59.05
PEG
25.67
FCF Yield
4.5%
Rev Growth YoY
+22.1% YoY
Gross Margin
76.6%
Health Score
8/10
D/E Ratio
0.12
Confidence
MEDIUM
Business Snapshot
ServiceNow provides a cloud-based platform for enterprise IT service management, workflow automation, and business operations. The company operates in the large and growing enterprise software market, primarily competing against IT service management providers and low-code automation platforms. With a market cap of $101.42B and TTM revenue of $13.96B, ServiceNow is a large-cap dominant player in its space. The company distinguishes itself through a strong platform moat, deep enterprise integrations, and recurring subscription revenue.
Financial Health
ServiceNow reports a strong gross margin of 76.6%, indicating excellent pricing power and efficient service delivery, though a prior-year comparison is not available. Net margin stands at 12.6%, reflecting a healthy level of profitability after operating expenses...
Risk Assessment
- VALUATION — The P/E of 59.05x is a wide premium to the sector average of 22x, leaving the stock vulnerable to multiple compression if growth disappoints.
- EARNINGS QUALITY — Earnings growth of 2.3% YoY is sharply lower than revenue growth of 22.1% YoY, indicating that profitability is not keeping pace with top-line expansion.
- 52-WEEK POSITION — The current price of $99.28 is 53.1% below the 52-week high of $211.48, placing it in the lower half of its historical trading range and suggesting persistent selling pressure.
- TECHNICALS — Price is below both the 50-day MA ($99.78) and the 200-day MA ($134.53), and the moving averages have formed a "death cross," a bearish technical pattern.
- VALUATION DIVERGENCE — A simplified DCF fair value of $160.85 suggests a discount, but this estimate is highly sensitive to the 2.5% terminal growth assumption; a 0.5% change can move the estimate by 15-25%....
ServiceNow reports a strong gross margin of 76.6%, indicating excellent pricing power and efficient service delivery, though a prior-year comparison is not available. Net margin stands at 12.6%, reflecting a healthy level of profitability after operating expenses. The balance sheet is conservative with a debt-to-equity ratio of 0.12x, showing minimal leverage, and a current ratio of 1.0x, indicating adequate short-term liquidity. Free cash flow is robust at $4.59B, translating to a healthy FCF yield of 4.5%, which underscores the company's cash generation capability. Overall, the financial health is solid, supporting significant reinvestment into growth initiatives and potential shareholder returns.
- VALUATION — The P/E of 59.05x is a wide premium to the sector average of 22x, leaving the stock vulnerable to multiple compression if growth disappoints. - EARNINGS QUALITY — Earnings growth of 2.3% YoY is sharply lower than revenue growth of 22.1% YoY, indicating that profitability is not keeping pace with top-line expansion. - 52-WEEK POSITION — The current price of $99.28 is 53.1% below the 52-week high of $211.48, placing it in the lower half of its historical trading range and suggesting persistent selling pressure. - TECHNICALS — Price is below both the 50-day MA ($99.78) and the 200-day MA ($134.53), and the moving averages have formed a "death cross," a bearish technical pattern. - VALUATION DIVERGENCE — A simplified DCF fair value of $160.85 suggests a discount, but this estimate is highly sensitive to the 2.5% terminal growth assumption; a 0.5% change can move the estimate by 15-25%.
Unlock the full AI report
Full 8-section analysis includes:
Metric deep-dives