US · NYSE · NOW
ServiceNow (NOW) stock analysis: valuation and financials
Technology · Computer Software: Prepackaged Software
$139.29 -0.7% Price as of Oct 13, 2026
Elite workflow platform: 20.9% revenue growth, 34.5% FCF margin, net debt 1.80x EBITDA, but 86.3x P/E and base-case fair value 7.2% below price; multiple compression is the risk.
- Market cap
- $144.1B
- P/E
- 86.3x
- EV/Sales
- 10.1x
- FCF yield
- 3.2%
- 52-week range
- $83.00 – $189.26
- Next earnings
- Oct 28, 2026
Research as of Oct 14, 2026
Business quality scorecard
- Growth81
- Profitability63
- Cash flow67
- Balance sheet52
- Capital allocation40
- Innovation83
- Valuation47
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Enterprises pay multi-year subscription fees for access to the ServiceNow AI Platform, plus smaller fees for deployment and training services; the License and Service segment generates 97.0% of FY2025 revenue and, with FY2025 operating margin of 13.7% and free cash flow margin of 34.5%, is the profit engine.
Financials by year
| FY2021Jan–Dec 2021 | FY2022Jan–Dec 2022 | FY2023Jan–Dec 2023 | FY2024Jan–Dec 2024 | FY2025Jan–Dec 2025 | |
|---|---|---|---|---|---|
| Revenue | $5.9B | $7.2B | $9.0B | $11.0B | $13.3B |
| Revenue growth | +30.5% | +22.9% | +23.8% | +22.4% | +20.9% |
| Gross margin | 77.1% | 78.3% | 78.6% | 79.2% | 77.5% |
| Operating margin | 4.4% | 4.9% | 8.5% | 12.4% | 13.7% |
| Net income | $230.0M | $325.0M | $1.7B | $1.4B | $1.7B |
| Free cash flow | $1.8B | $2.2B | $2.7B | $3.4B | $4.6B |
| FCF margin | 30.5% | 30.0% | 30.1% | 31.1% | 34.5% |
Amounts in USD · What is free cash flow?
Margins Gross margin 79.2% FY2024 to 77.5% FY2025 to 74.8% TTM to 70.7% in Q2 FY2026. Operating margin rose to 13.7% in FY2025 from 12.4%, but is 11.4% TTM and 4.1% in Q2 FY2026. Main reason: rising third-party partner costs and acquisition amortization.
- Cash flow WatchFY2025 operating cash flow $5.444B versus net income $1.748B, cash conversion 2.67x; TTM OCF $5.308B, FCF $4.580B, FCF margin 31.1%.
- Debt ManageableNet debt $4.953B, 1.80x EBITDA; total debt $9.617B TTM versus $1.491B at FY2025 year-end, raised alongside $9.784B of TTM acquisitions.
Balance sheet Leverage · Moderate
- Cash & short-term investments
- $4.7B
- Total debt
- $9.6B
- Net debt
- $5.0B
- Net debt / EBITDA
- 1.8x
- Current ratio
- 0.7x
As of Jun 30, 2026 · Amounts in USD · How to read a balance sheet
Management and track record
- Management AdequateExecution is strong: FY2025 revenue $13.28B, up 20.9% y/y with a 24.1% five-year revenue CAGR; free cash flow $4.576B and a 34.5% FCF margin versus 30.3% in FY2020.
- Credibility HighRepeated high-end beats: Q2 FY2026 subscription revenues exceeded the guided range by 150bps, and every release in the provided series states guidance was beaten across topline and profitability metrics.
Of 7 guided figures checked: 7 beat, 0 in range, 0 missed.
Valuation range
Implied value per share · Price when researched: $139.29
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
The full report is for members.