Rose Celine Investments
Equity Investor
ServiceNow looks very reasonably valued at around 20x forward earnings while growing about 20%, near one of its lowest multiples in years even as execution stays exceptionally strong. Revenue grew about 24%, earnings beat and guidance rose modestly, extending a run of consistent compounding few enterprise software businesses can match. A lower multiple often reflects falling expectations while the economics keep improving, not a problem with the business. x.com
ServiceNow could more than double by 2030 if it reaches management's goal of about $32 billion in revenue with a 35% free cash flow margin. That would yield $11.2 billion of reported free cash flow, or about $8 billion after offsetting stock compensation; at 25–35 times the lower figure it would be worth $200–280 billion, 100–180% upside or 17–26% a year. AI is the biggest variable but looks like a positive, as enterprises need one trusted platform to govern their AI agents. x.com x.com
ServiceNow's unexpected expense surge makes its rich valuation more vulnerable in a struggling software sector. Revenue rose 21%, but spending drove an EPS miss and one quarter of guided cRPO deceleration; wider market conditions could hurt near term. The 20% selloff looks excessive, and few software companies should benefit as much from AI. Management could deliver over 3-5 years, though the stock is only close to a buy again now; below $100 looks good for the long term. x.com x.com x.com x.com
ServiceNow's third-quarter subscription revenue, cRPO and operating-margin beats make its double-digit selloff look overdone. After a 77% rise from April lows, it needed a big beat and raise; lower fourth-quarter cRPO guidance and back-loaded implications for $30-$32 billion in subscription growth by 2030 leave the stock in show-me mode. x.com
ServiceNow's growth and deteriorating margins do not justify its valuation. It grew 3% quarter over quarter against a 107x trailing GAAP P/E, and its margins continue to deteriorate. It remains a great company, but is mostly saturated relative to that valuation. x.com x.com x.com
ServiceNow keeps selling more to existing customers over time, one of the biggest reasons to be bullish long term. Its 2011 customer cohort's annual contract value grew from an indexed $100 to $3,730 by Q3 2026, or 37.3x, even including customer losses. x.com
ServiceNow looks oversold at about 4x sales and under 20x forward earnings with revenue still growing over 20%. It never deserved the 18x sales multiple it once carried, which justified staying away until the compression @BradoCapital highlights brought it here. x.com
ServiceNow's costs are rising far faster than revenue without the RPO acceleration management promised. Q3 revenue rose 21%, while total cost of revenue climbed 56% and net income fell 45%; stock compensation appears to be using about half of free cash flow. The selloff looks deserved, though the shares are now closer to fair value. Sustainable margins and measurable returns remain the test. x.com x.com x.com x.com x.com x.com
ServiceNow looks set up for a move now, framed simply as: if not now, then when? x.com
Cost fears and CRPO misunderstandings caused ServiceNow's selloff. The stock is definitely undervalued; the market's reaction is ridiculous. x.com
ServiceNow's guidance growth is set to fall by another fifth next quarter, a poor trajectory rather than a buying opportunity after earnings. x.com
ServiceNow is worth more than its current price even under conservative growth assumptions. It is projected to grow about 16-24% a year for the next five years, yet even assuming just 14% and applying a 25% margin of safety, its intrinsic value still exceeds today's share price. x.com
