From NASDAQ: 2025-06-04 12:40:00

ServiceNow (NOW) shares are deemed overvalued with a Value Score of F. Trading at 14.92X Price/Sales for the forward 12-month period, NOW exceeds the Computer & Technology sector’s 6.21X. YTD, NOW’s shares dropped 4.6% due to macroeconomic concerns following tariffs imposed by President Trump.

Despite the decline, NOW outperformed the Computers – IT Services industry. The company thrives on digital transformation adoption, boosted by an expanding portfolio, strategic acquisitions, and a strong partner base including Amazon, Microsoft, and NVIDIA. NOW introduced AI agents for enhanced security solutions and autonomous IT advancements.

NOW’s expanding portfolio, highlighted by the Core Business Suite and AI agents, aims to transform core business operations and enhance enterprise security. Acquisitions like Logik.ai further strengthen NOW’s CRM offerings. The company saw 72 transactions worth over $1 million in ACV in Q1 2025.

Partnering with Amazon Web Services and NVIDIA, NOW enhances data integration and AI capabilities, driving enterprise efficiency and real-time decision-making. The collaboration with Vodafone Business launched AI-powered service management solutions, boosting customer service and operational efficiency.

NOW’s earnings estimate for Q2 2025 stands at $3.53 per share, a 12.78% increase over 2024. The company consistently beats earnings estimates, with an average surprise of 6.61%. Q2 2025 revenues are estimated at $3.12 billion, reflecting an 18.79% growth over 2024.

ServiceNow’s robust AI portfolio and partner base bode well for future growth. However, challenges like unfavorable forex, intense competition, and macroeconomic uncertainties pose risks. With a Zacks Rank #3 (Hold), investors are advised to wait for a more opportune time to invest in NOW.



Read more at NASDAQ: Should You Buy, Sell, or Hold ServiceNow Stock at 14.92X P/S?