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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2805
Positioning
Market Dominance
Services
Computer Software
$191.4B
William R. McDermott
ServiceNow, Inc. provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. It operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption, and collaboration and development tools. The company was formerly known as Service-now.com.
Headcount
20.4K
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = NOW ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 17.1% | 10.3% | 35.5% | 14.6% | 10.1% | 105.2% | 0.0% | 41.0x | $244M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.1% | 8.3% | 45.7% | 8.5% | 6.2% | 28.1% | 0.0% | 0.0x | $736M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 0.0% | - | 97.4% | 58.0% | 37.4% | - | 8.8% | 264.0x | $2.5B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 15.3% | 5.8% | 100.0% | 6.9% | 5.2% | 15.1% | 0.0% | 24.0x | $1.8B | VS | |
$NOW ServiceNow, Inc. | 45 | 80 | 60 | 0 | 61.3x | 60.6x | 13.7% | 6.8% | 78.2% | 14.4% | 14.3% | 29.7% | 0.0% | 101.0x | $191.4B | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.7% | 2.4% | 64.6% | 4.5% | 2.8% | 8.6% | 0.0% | 0.3x | - | REF |
ServiceNow, Inc. (NOW) receives a "Reduce" rating with a composite score of 45.0/100. It ranks #2805 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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HQ Base
Santa Clara, California
Lagging peers — losers tend to keep underperforming
Trading at a discount to fundamentals — favorable entry valuation
High profitability & efficiency — strong quality floor supports entry
High volatility — wider range of outcomes increases timing risk
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for NOW.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 80 | 94 | -14DRAG |
| MOMENTUM | 0 | 0 | 0NEUTRAL |
| VALUATION | 60 | 67 | -7DRAG |
| INVESTMENT | 25 | 16 | +9ALPHA |
| STABILITY | 32 | 25 | +7ALPHA |
| SHORT INT | 61 | 76 | -15DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy 13.7% (sector 5.7%)
GM 78% vs sector 65%, OM 14% vs sector 5%
Capital turnover N/A, R&D intensity 22.3%
Rev growth 30%, 10yr history
Interest coverage N/A, Net debt/EBITDA -0.8x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate ServiceNow, Inc. (NOW) as a Reduce with a composite score of 45.0/100 at a current price of $100.90. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
ServiceNow, Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 45.0/100 places it at rank #2805 in our full universe.
Narrow
High
Poor
Undervalued
Gross margins of 78% signal strong pricing power.
Stable competitive position in a defensive sector.
Elevated P/E ratio of 61.3x leaves little room for execution misses.
Leverage of 101% D/E amplifies downside risk.
Weak momentum suggests persistent institutional selling pressure.
ServiceNow, Inc. represents a reduce based on multi-factor quantitative performance.
ServiceNow, Inc. receives a Reduce rating from our analysis, with a composite score of 45.0/100 and 2 out of 5 stars, ranking #2805 out of 7,333 stocks. NOW's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
NOW earns a quality score of 80/100, indicating above-average business quality. The company reports a return on equity of 13.7% (sector avg: 5.7%), gross margins of 78.2% (sector avg: 64.6%), net margins of 14.3% (sector avg: 2.8%). Companies in this tier generally demonstrate consistent profitability and efficient capital deployment, though they may face some competitive pressure.
NOW's value score of 60/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 61.31x, an EV/EBITDA of 60.63x, a P/B ratio of 8.41x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
ServiceNow, Inc.'s investment score of 25/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 29.7% vs. a sector average of 8.6% and a return on assets of 6.8% (sector: 2.4%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
ServiceNow, Inc. is experiencing notably weak momentum with a score of just 0/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at 29.7% year-over-year, while a beta of 1.13 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
NOW's stability score of 32/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.13 and a debt-to-equity ratio of 101.00x (sector avg: 0.3x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
NOW carries a short interest score of 61/100, indicating moderate short selling activity. This is a neutral reading — not enough to signal systemic bearishness, but worth monitoring. Specific risk factors include elevated leverage (D/E: 101.00x). At $191.4B market cap (large-cap), ServiceNow, Inc. offers reasonable institutional liquidity.
ServiceNow, Inc. is a large-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #2805 of 7,333 overall (62nd percentile). Key comparisons include ROE of 13.7% exceeding the 5.7% sector median and operating margins of 14.4% above the 4.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While NOW currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Services Alpha →Quant Factor Profile
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Improvement in Momentum (0) would have the largest impact on the composite score.
EV/EBITDA 417% ABOVE SECTOR MEDIAN
ROE 139% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 21% ABOVE SECTOR MEDIAN (FAVORABLE)
Above 50MA
37.18%
Net New Highs
+51081
The article predicts agentic AI will be the biggest tech trend of 2026, highlighting ServiceNow and UiPath as leading agentic AI orchestration platforms. ServiceNow's Control Tower solution and recent acquisitions (Armis, Veza) position it well for growth, while UiPath's Maestro platform leverages its RPA foundation to manage both software bots and AI agents cost-effectively. Both stocks are recommended as attractive investment opportunities.
ServiceNow stock has fallen 34% in early 2026, but the underlying business remains strong with 21% subscription revenue growth and 25% growth in current remaining performance obligations. The company is leveraging AI as a growth catalyst and announced a $5 billion buyback authorization plus a $2 billion accelerated repurchase. However, the analyst suggests the stock may not yet be a clear buy despite the selloff, as it remains priced for sustained high growth amid AI-era uncertainty.
In recent weeks, ServiceNow has advanced its enterprise AI agenda through new partnerships with Tata Consultancy Services and Kearney, an announced acquisition of Pyramid Analytics, and upcoming participation in Bernstein’s “What’s Next in Tech?” forum, while also appointing Danielle Fontaine as Chief Accounting Officer and Corporate Controller. These moves, combined with CEO William McDermott’s US$3,000,000 open‑market share purchase and halted insider stock sales, highlight management’s...
ServiceNow executives are buying stock and terminating automated selling plans amid a 22% sector decline driven by fears that AI will eliminate software licensing demand. The company's leadership is betting that ServiceNow will become the governance layer for AI agents rather than a victim of automation. Despite a 55% stock decline, the company shows strong fundamentals with 21% subscription revenue growth and 57% free cash flow margins, suggesting the market has overreacted.
President Trump announced a 15% global tariff after the Supreme Court struck down his earlier tariffs, causing stock market turmoil. The S&P 500, Dow Jones, and Nasdaq all fell over 1% as the EU paused trade deal implementation in response. The uncertainty around tariffs and their legal authority has spooked investors, though past tariff announcements have proven fleeting. Analysts suggest diversifying internationally or maintaining current investment strategies rather than reacting to tariff noise.