Key Stats for ServiceNow Stock
- Current Price: $158.96
- Target Price (Mid): ~$326
- Street Target: ~$157
- Potential Total Return: ~105%
- Annualized IRR: ~19% / year
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What Happened?
ServiceNow (NOW) wants to lead enterprise security, and it spent roughly $7.75 billion in cash on Armis to get there. Chairman and CEO Bill McDermott told the Goldman Sachs Communacopia + Technology Conference on September 9 that the company is “now the eighth largest with an ambition to be #1.” Third-quarter results, due after the close on October 28, are the first earnings report since he said it.
Armis Gives the No. 1 Pitch Its Scale
ServiceNow closed Armis on April 20, a month after closing identity-security firm Veza. McDermott said security operations was already over $1 billion. He said the company already has 7 billion devices under management, with “another 40 billion more” coming into its purview in the next few years. His pitch targets companies that run 47 security tools on average.
ServiceNow has not published the basis for the No. 8 ranking. It has sized security and risk only as a 10-figure business, which appeared in 16 of its top 20 Q2 deals.
He also tied a much bigger public sector setup partly to Armis. That cuts both ways for Q3. The U.S. federal fiscal year ends September 30, but ServiceNow’s Q2 release said strong federal demand pulled some on-premise subscription revenue from Q3 into Q2.
The Deals Show Up Below the Adjusted Line
Amortization of purchased intangibles rose to $219 million in Q2 from $25 million a year earlier, or 5.5% of revenue from 1%, after the Moveworks, Veza, and Armis deals closed, per the Q2 release. With stock-based compensation at 16.5% of revenue, GAAP operating margin was 4% against 29.5% non-GAAP. Q3 guidance is 8% GAAP versus 31% non-GAAP.
That basis gap largely explains why shares trade at 99.32x trailing GAAP earnings but 35.08x forward normalized earnings on TIKR. Investors have noticed. Quartz tied the stock’s 17% drop after first-quarter results partly to Armis margin pressure, alongside Middle East deal delays.
TIKR tracks 49 analysts on ServiceNow. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on ServiceNow, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See ServiceNow’s Analyst Ratings
Partners Say Steady. The Last Three Reports Say Careful
On October 23, Guggenheim raised its target to $175 from $125 and BofA raised its target to $180 from $150. Shares closed that day at $158.96, just above TIKR’s $156.54 mean target. Guggenheim’s checks with five partners found one doing better than expected and four in line, which it said supports meeting Q3 cRPO estimates. Some partners reported buyer frustration with pricing that bundles AI into product packages.
TIKR consensus looks for Q3 revenue around $4.09 billion, up about 20%, and GAAP EPS around $0.35, down about 27%. Beats have not been enough. Revenue topped estimates in each of the last five quarters on TIKR, yet the stock’s one-day moves after the last three reports were -9.94%, -17.75%, and -3.69%. Reported reasons varied:
- January: AI worries.
- April: Armis margins, deal delays, and a software selloff.
- July: A softer second-half outlook.
At 9.40x NTM EV/revenue, ServiceNow trades near Microsoft (MSFT) at 10.08x but below Palo Alto Networks (PANW) at 21.93x and Fortinet (FTNT) at 15.08x, per TIKR. In an October note, BNP Paribas analyst Stefan Slowinski estimated security and risk could reach about $1.5 billion in annual contract value while growing 30% to 40%. ServiceNow has not confirmed those figures.
TIKR Advanced Model Analysis
- Current Price: $158.96
- Target Price (Mid): ~$326
- Potential Total Return: ~105%
- Annualized IRR: ~19% / year
TIKR’s mid-case targets around $326 by December 31, 2030, about a 105% total return, or roughly 19% a year over 4.2 years. For reference, Street estimates on TIKR (separate from the model’s inputs) put 2030 revenue near $32 billion, about 21% a year from 2025’s $13.28 billion, with normalized net margins near 29%. Only six analysts project that far.
The primary risk is integration: Armis was expected to weigh on 2026 margins, and partners flag friction over AI pricing. Upside comes if security grows into a disclosed, peer-valued line. Downside comes if partner caution shows up in net new contract value.
Conclusion
On October 28, the deciding detail is a security figure. A disclosed growth rate near BNP’s 30% to 40% estimate would put a number behind the No. 1 ambition, especially alongside a GAAP operating margin at or above the 8% guide. Without either, the report would look like the last three: a revenue beat with little new to value.
So what is ServiceNow stock actually worth?
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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!
