ServiceNow Inc (NOW)
Official siteTECHNOLOGY • SOFTWARE - APPLICATION • NYSE
Market Cap: $153.00B
Last updated: Sep 01, 2026 at 5:00 PM ET
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When Wall Street Indicts a Cash Flow Machine: Reading CRM Before the May 27 Earnings
Market punished CRM - 41% off 52-week high, ~24% below 200-day - yet trailing 12-month free cash flow was $14.4B on $41.5B revenue, FCF margin 34.7% and cash conversion ~96% Execution metrics support resilience - 3-yr FCF CAGR 31.6%, 5-yr revenue CAGR 14.3%, 3-yr EPS CAGR 26%, last 8 quarters 88% beat rate, avg surprise 7.6% Shareholder-friendly capital allocation - dividend raised to $0.44, $25B buyback authorized, net debt $7.1B vs $14.4B FCF, net leverage <0.6x EBITDA, interest coverage 45x Company is buying into AI not ceding ground - $300M Anthropic spend planned, agent platform ARR $800M (+169% YoY), 2.4B agent work units last quarter (+57% seq), $8B data integration deal closed
ServiceNow - One Of My Favorite Stocks In An Industry I Hate
AI commoditizes code and destroys traditional SaaS moats, making generic software companies highly vulnerable to disruption. ServiceNow thrives as a "system of action," orchestrating complex, deeply embedded enterprise workflows with high switching costs. By acting as the semantic layer, NOW translates raw, probabilistic AI models into deterministic, tangible business outcomes. Flawless organic growth, high free cash flow, and strong leadership justify NOW's premium valuation as an enterprise fortress.
When the Market Prices a Cash Machine for Scrap (MNDY)
MNDY dropped 21% post-earnings despite beating revenue (+27%) and EPS (+15% surprise) on FY2026 guidance deceleration to 18-19% growth At $77.63, the stock trades at 7.5x EV/FCF vs peers CRM (~14x), TEAM (~20x), pricing in negative cash flow growth for 5 years $1.67B in cash and securities ($32/share) creates a hard balance sheet floor, no meaningful debt, Altman Z of 4.7 Enterprise momentum intact: $100K+ ARR customers grew 45.5% YoY, RPO up 36.6% to $839M, NDR stable at 110% Blended fair value of ~$137 implies 43% margin of safety (76% upside); staged 3-tranche entry plan with $66 invalidation Key risk: $177M in SBC (14% of revenue) creates dilution drag, and management withdrew 2027 financial targets entirely Reverse DCF shows market expects cash flows to shrink; even flat execution should generate positive returns from this entry
ServiceNow's $30B AI Roadmap: Massive Growth, But Is It Priced for Perfection?
Analysts predict ServiceNow will nearly triple its yearly sales to almost $30 billion by 2030. They are in a rare "sweet spot" where they are growing very fast but also keeping a large amount of that money as pure profit Real AI Profits: Unlike others just talking, ServiceNow is making money now. Companies buy their premium "Pro" AI because it doesn't just write text—it automatically fixes problems across departments like IT and HR. Smart Strategy: Instead of replacing old accounting systems, ServiceNow connects to them. They act as the "easy-to-use layer" on top of complicated software, making them essential for big businesses. The "Control Tower": Companies have too many AI bots. ServiceNow built a tool to police them all, making it hard for customers to leave because they rely on ServiceNow for safety and rules. Better than the Competition: Salesforce rules "sales," but ServiceNow rules "internal work" (IT, HR). This behind-the-scenes work is messy and complicated, making it very hard for competitors to copy. Expensive Stock Price: The stock is pricey because investors expect perfection. The risk isn't going out of business, but that one "okay" year instead of a "great" one could cause the price to drop quickly. The "Robot" Risk: ServiceNow charges "per employee." If their AI replaces workers, they lose money. To fix this, they must switch to charging "per task" rather than "per person." The Long-Term View: If ServiceNow leads in AI and successfully changes how they bill customers (from people to tasks), the stock should be worth much more by 2030, offering solid returns.
Government Contracts
Top agency: Smithsonian Institution at 100.0% of trailing twelve month obligations across 1 agencies
Federal contract obligations are bookings recorded by the awarding agency, not recognized revenue. They can exceed 100% of revenue and can be negative when contracts are de-obligated. Source: USAspending.gov prime awards, data through Jul 31, 2026.
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Frequently Asked Questions About NOW
- Does NOW pay dividends?
- ServiceNow Inc (NOW) does not currently pay a regular dividend.
- What is NOW's P/E ratio?
- ServiceNow Inc has a price-to-earnings (P/E) ratio of 46.87.
- What is NOW's market cap?
- ServiceNow Inc (NOW) has a market capitalization of $153.00B with a current stock price of $148.11.
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