Rankings Software, cloud & internet ServiceNow
ServiceNow
85
15070100
A view of the same findings, not a new score. How it works
In the 70+ zone: a score above 70 with more than 20% upside to the median analyst target.
Biggest deductions
- Absolute price level−5
- AI agents versus the seat model−5
- Capital allocation (acquisitions on borrowed money)−4
Strengths
- Customer behaviour and order book+3
- Insider buying+2
- Raised guidance+1
How the score is built
From 100 to 85, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 2 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 106.01 USD
- Median analyst target
- 155.00 USD
- Upside to median
- +46.2%
- Analysts
- 49
- Target range
- 72.00 – 266.00 USD
- 52-week change
- −42%
- P/E (trailing)
- 76.2
- Forward P/E
- 23.4
- PEG
- 0.96
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−10 of −30
- −4Capital allocation (acquisitions on borrowed money)Moveworks ($2.85bn) and Armis (about $7.75bn) were bought within half a year. Cash acquisitions were $9.8bn TTM and net borrowing $6.0bn, so net cash of $7.7bn has become net debt of $1.7bn. Goodwill rose from $3.6bn to $9.8bn, and ROIC fell from 20% (2024-25) to 10%, just above the WACC of 9.2%.
- −4Stock-based compensation versus FCFStock-based compensation was 2,185m $ TTM (15% of revenue and 48% of FCF of 4,580m $). After deducting stock compensation, FCF is only approx. 2.4bn $. Buybacks of 4.0bn $ TTM reduced the share count by only 0.4%, so they merely offset dilution.
- −2MarginGAAP gross margin has fallen from 79.2% (2024) to 74.8% TTM, and operating margin from 15.1% (2025) to 12.4%. According to Freedom Broker, the non-GAAP gross margin fell in Q2 to 77.9% from 81% a year earlier. This is due to hosting at hyperscalers and Armis.
Price
Today's multiples against the company's own history and its peers. · 2 findings−7 of −35
- −2Multiples vs own historyForward P/E 31 is the lowest in ten years (40–96 in 2021–25), P/FCF 31.8 versus 34.7–71.8 and P/S 9.9 versus 10.8–21.9. The history is itself a very high starting point, however, and the stock has risen about 40% from the July low.
- −5Absolute price levelTrailing P/E of 88, EV/EBITDA of 51 and EV/EBIT of 81. The FCF yield is 3.1%, but only about 1.6% when stock-based compensation is deducted. Price targets are 4% above the share price.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 2 findings−7 of −35
- −5AI agents versus the seat modelThe core business grows with the number of users (seats), but customers get the most out of AI by using fewer employees. The stock fell approx. 55% from its peak to February 2026 on that fear. Management says half of new sales are now non-seat-based, but it is not proven that usage-based pricing replaces lost seats.
- −2Slowing organic growthQ3 guidance is 20.5% subscription growth and 19.5% cRPO growth, below consensus. Armis contributes about 1.25-1.75 percentage points, so organic growth is near 18-19% versus 22-24% in 2022-25.
Plus
Only documented strengths. · 3 findings+6 of +15
- +2Insider buyingCEO Bill McDermott bought shares for approx. 3m $ with his own money in February 2026, in the middle of the share price decline.
- +3Customer behaviour and order bookRenewal rate 98%. RPO is $29.0bn (+21%), and 658 customers have over $5m in ACV (+23%). The AI products have passed $1bn in ACV.
- +1Raised guidanceQ2 subscription revenue of $3,877m (+24.5%) was above guidance of $3,815-3,820m. Full-year guidance has been raised to $15.76-15.78bn (+22.5%), but including Armis.
Caveats
What the score does not capture, or where the data is weak.
5:1 stock split in December 2025, so old prices must be divided by 5. TTM figures include the acquisitions of Moveworks (2.85bn $) and Armis (approx. 7.75bn $), which weigh on margins and FCF. The actual share of revenue from AI cannot be determined; AI ACV is above 1bn $. Peers have not been compared systematically. Q3 results come 28/10.
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