ServiceNow, Inc. NOW
ServiceNow's FY2025 results are genuinely strong—revenue grew 20.9% to $13.3B with operating margin expanding to 13.7% and $4.6B in free cash flow—and the post-Q2 2026 AI-driven rally has pushed the stock to $144.71, up roughly 14% since the prior hold verdict on August 14. However, RSI at 72.7 signals overbought conditions, the P/E of 89.9 carries a 270% premium to the peer median of 24.3, and smart money remains essentially flat at -0.006 with fund count declining from 67 to 64 over two quarters.
The AI growth narrative is compelling but the current price already discounts significant perfection; a hold is warranted until either the multiple compresses or billings growth visibly accelerates beyond what is already priced in.
What could go wrong
- Valuation compression. P/E of 89.9 is 270% above the peer median of 24.3 and EV/EBITDA of 44.6 is 110% above the peer median of 21.3; any disappointment in growth or margin trajectory could trigger a sharp de-rating.
- Overbought technicals. RSI-14 at 72.7 and the stock trading 29% above its 50-day MA of $112.08 increase the probability of a near-term pullback after the recent 10% single-day surge.
- Smart money apathy. Smart money score has been negative for four consecutive quarters (-0.11 to -0.006) and fund count has declined from 67 to 64, suggesting institutional conviction is not building despite the price rally.
- AI cannibalization risk. While management frames AI as an expansion opportunity, the months-long debate about AI disrupting enterprise SaaS could resurface if competitive pressure intensifies or customer budget scrutiny increases.
What would change my mind
Where this comes from: FMP FY2025 annual + derived_metrics · peer_relative composite · technicals as of 2026-08-28 · smart_money 13F composite. Orin's read on NOW; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All NOW filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $6.7B | 0.1% of fund |
| State Street | $4.9B | 0.1% of fund |
| Morgan Stanley | $2.6B | 0.1% of fund |
| Vanguard Portfolio Management | $2.5B | 0.1% of fund |
| Geode Capital Management | $2.4B | 0.1% of fund |
| Price T Rowe Associates /Md/ | $1.6B | 0.2% of fund |
142 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 625 Form 4 filings, net $261.4M. Of the 50 on hand, 0 were open-market purchases and 3 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about NOW
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 87.4× | — | 53.3× |
| EV/EBITDA | 43.4× | 98.0× | — |
| P/S | 9.88× | 16.08× | — |
| P/B | 11.6× | 18.9× | — |
Its P/E sits 20th percentile of its own last 5 years (−0.78σ from its own mean).
14.0%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $4.6B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$144
$85 – $236 · +3% against today's price
- 60 buy or overweight
- 8 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| NOWServiceNow, Inc. | $146B | 87.4× | 43.4× | 74.8% | 11.3% | 14% |
| AMATApplied Materials, Inc. | $377B | 40.6× | 33.1× | 49.4% | 30.1% | 40% |
| ANETArista Networks, Inc. | $256B | 63.4× | 49.7× | 63.0% | 38.4% | 31% |
| APPAppLovin Corporation | $106B | 24.1× | 19.3× | 88.5% | 64.6% | 193% |
| CRMSalesforce, Inc. | $195B | 21.6× | 14.4× | 77.3% | 22.0% | 20% |
| INTUIntuit Inc. | $78B | 17.4× | 11.4× | 80.9% | 21.3% | 23% |
| LRCXLam Research Corporation | $384B | 53.1× | 44.0× | 50.5% | 31.3% | 67% |
| PANWPalo Alto Networks, Inc. | $321B | — | — | 70.4% | 2.7% | 2% |
| QCOMQUALCOMM Incorporated | $207B | 22.5× | 16.2× | 54.2% | 21.0% | 37% |
| UBERUber Technologies, Inc. | $141B | 15.0× | 18.9× | 42.3% | 17.3% | 36% |
The median is of the 8 peers listed above and nothing else — check it against the column. This company trades 275.4% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $123 | $108.40 · +14% | 2026-06-10 |
| Levered DCF | $207 | $108.40 · +91% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.