NOW ServiceNow

software · valued with sonnet high conviction · 2026-07-27

HOLD

good · 71 ▟ wide moat circle of competence: in ✓ would own for a decade trend down · -27.7% vs 200-DMA

Owner-earnings value$48.23

Price$98.78

Margin of safety -51.2%

Wonderful sticky-workflow business, but priced for a decade of near-flawless 25%/yr growth it likely can't sustain.

The business

ServiceNow sells a subscription cloud platform that automates and digitizes enterprise workflows — starting in IT service management and expanding into HR, customer service, security, and now AI-driven 'Now Assist' agents. Revenue is overwhelmingly recurring subscription fees from large enterprises, with net income still thin relative to reported cash generation because of heavy stock-based comp.

Quality gate · 71/100

Returns on capital 8.9/30

Consistency 17.2/22

Margins / pricing power 16.0/16

Balance sheet 15.2/16

Cash conversion 10/10

Capital allocation 3.4/6

Median ROIC9.3%

Gross margin74.8%

Net debt / EBITDA-0.4x

FCF conversion244%

Share count / yr+1.1%

Profitable years4/4

Moat & management

Moat	▟ wide moat
Source	switching costs
Trajectory	widening
Management	excellent

Once ServiceNow's workflows are wired into a company's IT, HR, and security processes, ripping it out is organizationally painful and risky — this shows up in 74.8% gross margins and high net retention. Expansion into adjacent modules and embedding AI agents into core workflows raises switching costs further rather than eroding them.

McDermott's team has compounded revenue at 22%+ while keeping the balance sheet net-cash and share count nearly flat (1.1% CAGR) despite heavy SBC — disciplined for a growth-stage SaaS company, though SBC still represents a real economic cost GAAP earnings understate.

Owner-earnings inputs

Owner earnings (TTM)	2.00B
Owner-earnings yield	2.0%
Free-cash-flow yield	4.5%
Growth used (normalized)	12.0%
Market-implied growth (reverse DCF)	25.0%
Terminal growth	3.0%
Discount rate (hurdle)	9.0%

Projected owner earnings

Yr	Owner earnings	Growth	PV
1	2.19B	12.0%	2.01B
2	2.43B	11.0%	2.05B
3	2.67B	10.0%	2.06B
4	2.92B	9.0%	2.06B
5	3.15B	8.0%	2.04B
6	3.37B	7.0%	2.01B
7	3.57B	6.0%	1.95B
8	3.75B	5.0%	1.88B
9	3.90B	4.0%	1.79B
10	4.02B	3.0%	1.69B

Key risks

Price already implies ~25%/yr owner-earnings growth for a decade — a bar few companies of any quality have ever cleared
AI agents could eventually compress the seat-based/workflow-based pricing model they currently monetize
Intensifying competition from Microsoft, Salesforce, and Palantir in agentic enterprise AI
Growth mechanically decelerates as the revenue base scales past $15B

Catalysts

Now Assist AI upsell into the existing enterprise install base
Continued cross-sell into HR, CRM, and security workflow modules

Recent news

score · 8 articles

ServiceNow (NOW) Teams Up With TeamViewer As Experian Expands AI Platform Use
Down 40% on the Year, Is ServiceNow Stock a Buy as Its Subscription Revenue Surges 25%?
Better AI Software Stock: Palantir vs. ServiceNow
Goldman says ServiceNow is writing a totally new playbook
Salesforce vs. ServiceNow: Which Agentic AI Stock Is Actually the Better Buy Right Now?
Prediction: Is Salesforce a Millionaire-Maker Stock?
Big Tech Earnings Week is Over. Who Won and Lost?
Navitas Semiconductor vs. ServiceNow: What Recent Quarterly Revenue Trends Tell Investors About These Tech Companies

⚠ maintenance capex ≈ min(capex, D&A), capped at FCF · Net cash 1.3B credited to value (interest stripped from owner earnings to avoid double-counting). · Price pays for ~25%/yr owner-earnings growth over 10y (reverse DCF); model credits 12%. · Rich vs our conservative value, but a quality business is not a short — stance is WAIT for a better price, not sell.

Date	Quality	Price	Value	MoS	Rating
2026-10-28	71	$154.78	$43.33	-72.0%	HOLD
2026-10-27	71	$158.18	$43.33	-72.6%	HOLD
2026-10-26	71	$158.96	$43.33	-72.7%	HOLD
2026-10-23	71	$157.00	$43.33	-72.4%	HOLD
2026-10-22	71	$153.12	$43.33	-71.7%	HOLD
2026-10-21	71	$149.54	$43.33	-71.0%	HOLD
2026-10-20	71	$145.36	$43.33	-70.2%	HOLD
2026-10-19	71	$141.97	$43.33	-69.5%	HOLD
2026-10-16	71	$148.57	$43.33	-70.8%	HOLD
2026-10-15	71	$139.98	$43.33	-69.0%	HOLD
2026-10-14	71	$138.61	$43.33	-68.7%	HOLD
2026-10-13	71	$140.32	$43.33	-69.1%	HOLD
2026-10-12	71	$140.86	$43.33	-69.2%	HOLD
2026-10-09	71	$139.75	$43.33	-69.0%	HOLD
2026-10-08	71	$137.87	$43.33	-68.6%	HOLD
2026-10-07	71	$137.97	$43.33	-68.6%	HOLD
2026-10-06	71	$136.08	$43.33	-68.2%	HOLD
2026-10-05	71	$134.38	$43.33	-67.8%	HOLD
2026-10-02	71	$137.76	$43.33	-68.5%	HOLD
2026-10-01	71	$134.01	$43.33	-67.7%	HOLD
2026-09-30	71	$129.94	$48.39	-62.8%	HOLD
2026-09-29	71	$131.45	$48.39	-63.2%	HOLD
2026-09-28	71	$135.62	$48.39	-64.3%	HOLD
2026-09-25	71	$137.78	$48.39	-64.9%	HOLD
2026-09-24	71	$140.78	$48.39	-65.6%	HOLD
2026-09-23	71	$137.68	$48.39	-64.9%	HOLD
2026-09-22	71	$137.68	$48.39	-64.9%	HOLD
2026-09-21	71	$135.47	$48.39	-64.3%	HOLD
2026-09-18	71	$138.47	$48.39	-65.1%	HOLD
2026-09-17	71	$139.82	$48.39	-65.4%	HOLD
2026-09-16	71	$141.90	$48.39	-65.9%	HOLD
2026-09-15	71	$142.35	$48.39	-66.0%	HOLD
2026-09-14	71	$132.53	$48.39	-63.5%	HOLD
2026-09-11	71	$131.17	$48.39	-63.1%	HOLD
2026-09-10	71	$131.11	$48.39	-63.1%	HOLD
2026-09-09	71	$134.21	$48.39	-63.9%	HOLD
2026-09-08	71	$141.26	$48.39	-65.7%	HOLD
2026-09-07	71	$141.26	$48.39	-65.7%	HOLD
2026-09-04	71	$145.59	$48.39	-66.8%	HOLD
2026-09-03	71	$136.72	$48.39	-64.6%	HOLD
2026-09-02	71	$142.90	$48.39	-66.1%	HOLD
2026-09-01	71	$147.99	$48.39	-67.3%	HOLD
2026-08-31	71	$144.71	$48.39	-66.6%	HOLD
2026-08-28	71	$138.43	$48.39	-65.0%	HOLD
2026-08-27	71	$125.80	$48.23	-61.7%	HOLD
2026-08-26	71	$127.00	$48.23	-62.0%	HOLD
2026-08-25	71	$128.05	$48.23	-62.3%	HOLD
2026-08-24	71	$128.48	$48.23	-62.5%	HOLD
2026-08-21	71	$129.75	$48.23	-62.8%	HOLD
2026-08-20	71	$127.20	$48.23	-62.1%	HOLD
2026-08-19	71	$119.49	$48.23	-59.6%	HOLD
2026-08-18	71	$124.00	$48.23	-61.1%	HOLD
2026-08-17	71	$124.00	$48.23	-61.1%	HOLD
2026-08-14	71	$127.25	$48.23	-62.1%	HOLD
2026-08-13	71	$124.94	$48.23	-61.4%	HOLD
2026-08-12	71	$127.44	$48.23	-62.2%	HOLD
2026-08-11	71	$127.44	$48.23	-62.2%	HOLD
2026-08-10	71	$124.88	$48.23	-61.4%	HOLD
2026-08-07	71	$117.35	$48.23	-58.9%	HOLD
2026-08-06	71	$117.22	$48.23	-58.9%	HOLD
2026-08-05	71	$118.14	$48.23	-59.2%	HOLD
2026-08-04	71	$111.23	$48.23	-56.6%	HOLD
2026-08-03	71	$111.23	$48.23	-56.6%	HOLD
2026-07-31	71	$110.07	$48.23	-56.2%	HOLD
2026-07-30	71	$115.76	$48.23	-58.3%	HOLD
2026-07-29	71	$105.56	$48.23	-54.3%	HOLD
2026-07-28	71	$105.56	$48.23	-54.3%	HOLD
2026-07-27	71	$98.78	$48.23	-51.2%	HOLD
2026-07-24	71	$91.94	$39.88	-56.6%	HOLD
2026-07-23	71	$95.46	$39.88	-58.2%	HOLD
2026-07-22	71	$102.06	$39.88	-60.9%	HOLD
2026-07-21	71	$104.70	$39.88	-61.9%	HOLD
2026-07-20	71	$103.24	$39.88	-61.4%	HOLD
2026-07-17	71	$104.01	$39.88	-61.7%	HOLD
2026-07-16	71	$104.73	$39.88	-61.9%	HOLD
2026-07-15	71	$104.85	$39.88	-62.0%	HOLD
2026-07-14	71	$111.26	$39.88	-64.2%	HOLD
2026-07-13	71	$107.71	$39.88	-63.0%	HOLD
2026-07-10	71	$108.84	$39.88	-63.4%	HOLD
2026-07-09	71	$107.78	$39.88	-63.0%	HOLD
2026-07-08	71	$110.73	$39.88	-64.0%	HOLD
2026-07-07	71	$107.93	$39.88	-63.1%	HOLD
2026-07-06	71	$106.32	$39.88	-62.5%	HOLD
2026-07-03	71	$106.32	$39.88	-62.5%	HOLD
2026-07-02	71	$105.80	$39.88	-62.3%	HOLD
2026-06-25	71	$93.80	$39.61	-57.8%	STRONG SELL
2026-06-23	71	$95.94	$39.61	-58.7%	STRONG SELL

Date

Quality

Price

Value

MoS

Rating

2026-10-28

$154.78

$43.33

-72.0%

HOLD

2026-10-27

$158.18

$43.33

-72.6%

HOLD

2026-10-26

$158.96

$43.33

-72.7%

HOLD

2026-10-23

$157.00

$43.33

-72.4%

HOLD

2026-10-22

$153.12

$43.33

-71.7%

HOLD

2026-10-21

$149.54

$43.33

-71.0%

HOLD

2026-10-20

$145.36

$43.33

-70.2%

HOLD

2026-10-19

$141.97

$43.33

-69.5%

HOLD

2026-10-16

$148.57

$43.33

-70.8%

HOLD

2026-10-15

$139.98

$43.33

-69.0%

HOLD

2026-10-14

$138.61

$43.33

-68.7%

HOLD

2026-10-13

$140.32

$43.33

-69.1%

HOLD

2026-10-12

$140.86

$43.33

-69.2%

HOLD

2026-10-09

$139.75

$43.33

-69.0%

HOLD

2026-10-08

$137.87

$43.33

-68.6%

HOLD

2026-10-07

$137.97

$43.33

-68.6%

HOLD

2026-10-06

$136.08

$43.33

-68.2%

HOLD

2026-10-05

$134.38

$43.33

-67.8%

HOLD

2026-10-02

$137.76

$43.33

-68.5%

HOLD

2026-10-01

$134.01

$43.33

-67.7%

HOLD

2026-09-30

$129.94

$48.39

-62.8%

HOLD

2026-09-29

$131.45

$48.39

-63.2%

HOLD

2026-09-28

$135.62

$48.39

-64.3%

HOLD

2026-09-25

$137.78

$48.39

-64.9%

HOLD

2026-09-24

$140.78

$48.39

-65.6%

HOLD

2026-09-23

$137.68

$48.39

-64.9%

HOLD

2026-09-22

$137.68

$48.39

-64.9%

HOLD

2026-09-21

$135.47

$48.39

-64.3%

HOLD

2026-09-18

$138.47

$48.39

-65.1%

HOLD

2026-09-17

$139.82

$48.39

-65.4%

HOLD

2026-09-16

$141.90

$48.39

-65.9%

HOLD

2026-09-15

$142.35

$48.39

-66.0%

HOLD

2026-09-14

$132.53

$48.39

-63.5%

HOLD

2026-09-11

$131.17

$48.39

-63.1%

HOLD

2026-09-10

$131.11

$48.39

-63.1%

HOLD

2026-09-09

$134.21

$48.39

-63.9%

HOLD

2026-09-08

$141.26

$48.39

-65.7%

HOLD

2026-09-07

$141.26

$48.39

-65.7%

HOLD

2026-09-04

$145.59

$48.39

-66.8%

HOLD

2026-09-03

$136.72

$48.39

-64.6%

HOLD

2026-09-02

$142.90

$48.39

-66.1%

HOLD

2026-09-01

$147.99

$48.39

-67.3%

HOLD

2026-08-31

$144.71

$48.39

-66.6%

HOLD

2026-08-28

$138.43

$48.39

-65.0%

HOLD

2026-08-27

$125.80

$48.23

-61.7%

HOLD

2026-08-26

$127.00

$48.23

-62.0%

HOLD

2026-08-25

$128.05

$48.23

-62.3%

HOLD

2026-08-24

$128.48

$48.23

-62.5%

HOLD

2026-08-21

$129.75

$48.23

-62.8%

HOLD

2026-08-20

$127.20

$48.23

-62.1%

HOLD

2026-08-19

$119.49

$48.23

-59.6%

HOLD

2026-08-18

$124.00

$48.23

-61.1%

HOLD

2026-08-17

$124.00

$48.23

-61.1%

HOLD

2026-08-14

$127.25

$48.23

-62.1%

HOLD

2026-08-13

$124.94

$48.23

-61.4%

HOLD

2026-08-12

$127.44

$48.23

-62.2%

HOLD

2026-08-11

$127.44

$48.23

-62.2%

HOLD

2026-08-10

$124.88

$48.23

-61.4%

HOLD

2026-08-07

$117.35

$48.23

-58.9%

HOLD

2026-08-06

$117.22

$48.23

-58.9%

HOLD

2026-08-05

$118.14

$48.23

-59.2%

HOLD

2026-08-04

$111.23

$48.23

-56.6%

HOLD

2026-08-03

$111.23

$48.23

-56.6%

HOLD

2026-07-31

$110.07

$48.23

-56.2%

HOLD

2026-07-30

$115.76

$48.23

-58.3%

HOLD

2026-07-29

$105.56

$48.23

-54.3%

HOLD

2026-07-28

$105.56

$48.23

-54.3%

HOLD

2026-07-27

$98.78

$48.23

-51.2%

HOLD

2026-07-24

$91.94

$39.88

-56.6%

HOLD

2026-07-23

$95.46

$39.88

-58.2%

HOLD

2026-07-22

$102.06

$39.88

-60.9%

HOLD

2026-07-21

$104.70

$39.88

-61.9%

HOLD

2026-07-20

$103.24

$39.88

-61.4%

HOLD

2026-07-17

$104.01

$39.88

-61.7%

HOLD

2026-07-16

$104.73

$39.88

-61.9%

HOLD

2026-07-15

$104.85

$39.88

-62.0%

HOLD

2026-07-14

$111.26

$39.88

-64.2%

HOLD

2026-07-13

$107.71

$39.88

-63.0%

HOLD

2026-07-10

$108.84

$39.88

-63.4%

HOLD

2026-07-09

$107.78

$39.88

-63.0%

HOLD

2026-07-08

$110.73

$39.88

-64.0%

HOLD

2026-07-07

$107.93

$39.88

-63.1%

HOLD

2026-07-06

$106.32

$39.88

-62.5%

HOLD

2026-07-03

$106.32

$39.88

-62.5%

HOLD

2026-07-02

$105.80

$39.88

-62.3%

HOLD

2026-06-25

$93.80

$39.61

-57.8%

STRONG SELL

2026-06-23

$95.94

$39.61

-58.7%

STRONG SELL

The business

Quality gate · 71/100

Moat & management

Owner-earnings inputs

Projected owner earnings

Key risks

Catalysts

Recent news

History