Key Stats for ServiceNow (NOW) Stock
- Past-week performance: ~-3.8%
- 52-week range: $136 to $240
- Valuation model target price: $231
- Implied upside: 63% over 2.0 years
What Happened?
ServiceNow (NOW) stock fell about 4% over the past week, closing at $141.80, after a late-week pullback reversed earlier gains and pushed shares back toward the lower end of their recent range.
The move unfolded gradually rather than on a single headline. Earlier in the week, ServiceNow was trading higher alongside other large-cap software names before sentiment shifted as investors reassessed valuation across high-multiple enterprise software stocks.
Part of that shift followed renewed caution from analysts around near-term upside after the stock’s rebound. Earlier this year, Jefferies reiterated its Buy rating on ServiceNow but flagged valuation sensitivity after the stock’s rally, noting that expectations now require continued execution to justify further multiple expansion.
The move appears tied to valuation and positioning rather than fundamentals. ServiceNow continues to benefit from strong demand for workflow automation and AI-driven enterprise tools, but the past week shows the market is becoming more disciplined about what it is willing to pay for that growth.
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Is ServiceNow Undervalued?
Under valuation model assumptions realized through 12/31/27, ServiceNow stock is modeled using:
- Revenue growth (CAGR): 19.2%
- Operating margins: 32.3%
- Exit P/E multiple: 43.0x
Based on these inputs, the model estimates a target price of $230.52, implying ~62.6% total upside from $141.80 over the next 2.0 years, or about 27.9% per year.
Performance over the next year ties closely to platform expansion beyond core IT workflows, as customer service, security, and industry-specific modules drive larger deal sizes and stronger renewal durability.
AI-driven monetization through tools like Now Assist stands out as a key swing factor, with conversion from pilots to paid usage flowing into higher net retention, growing remaining performance obligations, and incremental margin leverage as software scale improves.
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