ServiceNow (NOW) Stock Analysis: Is This High-Flyer Still a Buy?
Let’s talk about ServiceNow (NOW)—one of those software names that doesn’t generate Tesla-level headlines but quietly powers the backbone of modern enterprises. If you’ve worked in a large company, you’ve probably touched ServiceNow without even realizing it. IT tickets. HR requests. Finance workflows. All that boring but mission-critical stuff? Yeah, that’s their turf—and they’re really good at it.
But here’s the real question: Is ServiceNow still worth your money at nearly $900 a share?
Let’s break this down like we’re friends talking over coffee—no finance PhD required, just smart, practical analysis.
🚦 The Current Situation
ServiceNow is currently trading at $895.05, down -1.90% from the previous session. That’s not panic territory, but it’s part of a broader 9.24% dip over the past 30 days. Nothing too dramatic—tech’s been jittery.
Still, zoom out and the bigger picture is bright: up 17.5% over the past year.
We’re looking at a stock that’s had an epic run, cooled off a little recently, and is sitting about 25% below its all-time high of $1,198. That’s the setup. Let’s look under the hood.
📊 Quick Stats: Numbers That Actually Matter
| Metric | Value |
|---|---|
| Market Cap | $186.2B |
| P/E Ratio | 112.3 |
| 52-Week High / Low | $1,198 / $678 |
| Dividend | 0% (and no plans to start) |
| Volatility (30-day) | 31.5% annualized |
That P/E ratio is the big elephant in the room. 112x earnings is nosebleed territory—even for a growth stock. So the real question becomes: is the growth story worth paying that kind of premium?
💥 Q2 2025: This Is What Outperformance Looks Like
ServiceNow absolutely crushed its most recent quarter:
- Revenue: $3.22B (up 22.5% YoY)
- EPS: $4.09 vs. $3.57 expected — a 14.5% upside surprise
- Operating Margin: 29.5% (250 bps above guidance)
- Free Cash Flow Margin: 16.5% (up 300 bps YoY)
Even more impressive: net income up 46.9%, EPS up 46%.
This isn’t a startup hoping to break even someday. This is a profitable beast with real earnings power. The margins are expanding, the cash flow’s flowing, and they’re delivering profitable growth—the holy grail in tech.
🔮 Analyst Sentiment: Still Hot
Wall Street analysts are practically lining up to say “Buy.”
- Consensus Rating: Strong Buy
- Average Price Target: $1,102–$1,153
- High Target: $1,300 (that’s a 45% upside from here)
- Low Target: $724 (worst-case scenario… ish)
This isn’t just hope and hype. There’s a real belief that ServiceNow can grow into its valuation—especially with the AI angle (more on that shortly).
📈 Growth Forecasts: Rocket Fuel or a Plateau?
Here’s what analysts expect over the next few years:
- Revenue Growth: ~15.5% annually
- EPS Growth: ~19.4% annually
- Earnings Growth: ~20.9% annually
If they can sustain that for a decade, those high multiples start looking a little more justifiable.
Long-term projections are bold:
- 2030: ~$1,122 (modest upside)
- 2040: $3,161
- 2050: $4,369+
Are those numbers speculative? Sure. But the compound annual growth math checks out if they execute. And if you’re a long-term investor, that kind of optionality is what you’re buying.
🧠 The AI Catalyst: Where the Magic Might Happen
Here’s where it gets really interesting. ServiceNow is going hard into AI—not just because it’s trendy, but because it makes sense for what they do.
- AI revenue quadrupled YoY
- Now Assist (AI product) targeting $1B in ACV by 2026
- AI-related deal count up 50% sequentially
They’re not building general-purpose chatbots or making AI toys. They’re baking AI directly into workflows—automating ticket routing, generating knowledge base content, predicting issues before they occur. Real enterprise productivity stuff.
This is what’s known in VC-speak as “agentic AI”—smart systems that take action, not just suggest options. And ServiceNow is arguably better positioned than almost anyone to capitalize here. Why? Because they already sit at the center of enterprise processes.
They’re not selling hype. They’re making existing customers smarter and stickier. That’s huge.
⚠️ But Don’t Get Blinded—Here Are the Risks
Every great growth story has a dark side. Let’s be honest:
1. Valuation Is a Sword That Cuts Both Ways
112x earnings is rich. That kind of multiple leaves no room for mistakes. If growth even slightly decelerates, the stock will get punished.
2. Competitive Pressure
While ServiceNow is the undisputed king of IT Service Management, they’re branching into other areas like CRM and operations workflows—putting them on a collision course with Salesforce, Atlassian, and others.
3. Cybersecurity
If you’re managing workflows for governments and Fortune 500s, you’re a huge target. One serious breach could shake confidence—and stock price—fast.
4. Macroeconomic Sensitivity
Enterprise software is often sticky, but not immune. If budgets tighten in a downturn, even renewal rates could come under pressure.
5. 27 Identified Risk Factors
That’s a lot, and they’re not trivial—ranging from legal to innovation to finance. No ticking time bomb here, but definitely worth keeping on your radar.
🏁 So… Is It a Buy?
Let’s cut through the fluff.
✅ Reasons to Buy NOW:
- You believe in AI as a long-term growth engine, and you want exposure to enterprise-focused, cash-generating AI—not just Nvidia hype.
- You value financial discipline: ServiceNow’s margins and FCF growth are the real deal.
- You’re in it for the long haul—you can handle some turbulence if the 10-year story plays out.
- You like companies with platform power and enterprise stickiness (85% of the Fortune 500, 98% renewal rate).
❌ Reasons to Wait or Pass:
- You’re valuation-sensitive and want to buy at a discount. This isn’t that.
- You’re seeking dividends or income. Look elsewhere.
- You want short-term upside. This could chop sideways before climbing again.
- You’re concerned about macro risk and prefer safer, more defensive plays.
🧠 Bottom Line: Great Company, Expensive Stock—For Now
ServiceNow is what happens when an enterprise software company grows up, gets profitable, and still manages to innovate.
Is it expensive? Absolutely.
Is it overhyped? Not really.
Is it a slam-dunk buy at $895? Only if you’re playing the long game.
For growth investors who want durable exposure to the AI transformation of enterprise operations, this is one of the better horses in the race. But don’t expect to triple your money overnight. You’re buying execution, scale, and compounding—not flash.
This isn’t sexy software. It’s serious software. And if that’s what you’re into, ServiceNow might deserve a spot on your radar—or in your portfolio.
One-Liner Takeaway:
ServiceNow is a high-quality, high-priced bet on the AI-powered future of work—great business, but patience (and conviction) required.
