ServiceNow (NOW) is pursuing acquisitions to boost growth despite a 30% YTD stock decline. The recent $7.75 billion deal for Armis is expected to triple ServiceNow’s market opportunity for security solutions and accelerate growth with an AI control tower for workflow and business outcomes, according to CEO Bill McDermott and Raymond James analysts.

ServiceNow, a cloud-based digital workflow solutions provider, has a global presence with a recurring revenue model. Despite a 24% stock decline in the past six months, the company’s multiple acquisitions indicate potential for top-line acceleration and a possible stock trend reversal. FY 2025 guidance includes a 20.5% YoY subscription revenue growth to $12.8 billion.

The acquisition of Armis, with over $340 million in annual recurring revenue and ARR growth exceeding 50%, offers significant upside potential for ServiceNow. The company reported cash and equivalents of $5.4 billion and $3.2 billion in operating cash flow for the first nine months of FY 2025, providing flexibility for acquisition-driven growth. ServiceNow’s addressable market of $350 billion and expansion into emerging markets further support growth prospects.

NOW stock is rated a consensus “Strong Buy” by analysts, with a mean price target of $225.52 implying a 47% upside potential. Despite a stretched forward price-earnings ratio of 78.8, the potential growth acceleration and expanded addressable market suggest positive outlooks beyond FY 2026 and FY 2027.

Read more at Yahoo Finance: A $7.75 Billion Reason to Buy ServiceNow Stock Before 2026