Key Stats for ServiceNow Stock
- Current Price: $140.86
- Target Price (Mid): ~$302
- Street Target: ~$147
- Potential Total Return: ~114%
- Annualized IRR: ~20% / year
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What Happened?
ServiceNow (NOW) closed at $140.86 on October 9, about 42% above its June 30 close of $99.28. Forward earnings did little of the lifting. Per TIKR, NTM normalized earnings per share rose about 4% over that stretch, while the NTM P/E climbed from around 23x to around 31x. The stock is still down 8% in 2026, and third-quarter results arrive after the close on October 28, according to the company’s investor relations materials.
A Sector Rally, Then McDermott’s Case That Seats Survive AI
The run had no single catalyst. Shares closed at $95.46 on July 22, the day of the second-quarter report, and at $105.56 on July 27. On August 27, after Salesforce (CRM) reported, the whole group moved: Salesforce rose 22.6%, and the State Street Software and Services ETF gained 5.2% as investors began treating AI as a complement to software.
At the Goldman Sachs Communacopia + Technology Conference on September 9, Chairman and CEO Bill McDermott made the company-specific case. He said seat-based models had not gone away and had “actually increased.” He also predicted AI drives “a 4.5x increase in terms of the revenue of the original seat” over a contract’s life. That is a forecast, not a reported metric, and ServiceNow has not published the math behind it.
He also previewed a simple AI help desk aimed at 500,000 mid-market companies. Flow by ServiceNow, a conversational service desk launched on October 1, fits that description. It targets first-time buyers and satellite teams at existing customers, and it is priced on consumption, with existing customers drawing on AI assists they already hold. Reports differ on timing: SiliconANGLE described Flow as available now, while Constellation Research reported controlled availability with general availability expected in the fourth quarter. Either way, Flow is a live test of McDermott’s pitch: revenue that grows with usage.
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The October 28 Print Starts With Revenue Pulled Into June
Second-quarter revenue rose 24.01% to $3.987 billion, 1.52% above estimates, per TIKR. ServiceNow’s Q2 results release said strong U.S. federal demand accelerated some on-premise subscription revenue from the third quarter into the second. Non-GAAP free cash flow rose 18.5% to $634 million but missed estimates by 5.99%.
Third-quarter guidance calls for subscription revenue of $3.975 billion to $3.980 billion, up 20.5%, and 19.5% growth in cRPO, meaning contract revenue due within 12 months. Analysts on TIKR expect total revenue growth of about 20% and normalized EPS of around $1.03, up about 6%. They project normalized EPS growth of around 23% in 2027.
The Street has moved less than the stock. The mean target rose about 4% from June 30, to around $147, as the high target rose from $236 to $248 and the low fell from $85 to $72. At around 31x NTM earnings, ServiceNow trades above Microsoft (MSFT) at around 27x and SAP (SAP) at around 25x, and about double Salesforce at around 16x, per TIKR.
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TIKR Advanced Model Analysis
- Current Price: $140.86
- Target Price (Mid): ~$302
- Potential Total Return: ~114%
- Annualized IRR: ~20% / year
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TIKR’s mid-case targets around $302 by December 31, 2030, about 20% a year over 4.2 years. Street estimates on TIKR, from only six analysts that far out, put 2030 revenue near $32 billion. That is around 19% annual growth from 2025, with normalized net income margins near 29%, and it matches the $32 billion course McDermott set for 2030 on the Q2 call.
The primary risk is the multiple: a return to around 23x would undo most of the rally, even if estimates hold. Upside comes if seat expansion and Flow push revenue above that path. The downside comes if cRPO growth falls short of guidance.
Conclusion
On October 28, watch cRPO growth against the 19.5% guide. Meeting or beating it despite the federal pull-forward, with subscription revenue at or above $3.980 billion, would support the 31x multiple. A cRPO print below 19.5% would make the June 30 level of around 23x look like the fairer price.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
