NOW's Subscription Growth Picks Up: A Sign of More Upside?
NOW Faces Stiff Competition
NOW faces stiff competition in the subscription-driven workflow automation space from the likes of Salesforce CRM and Pegasystems PEGA. Salesforce is benefiting from strong demand for its Einstein AI platform, which integrates across subscription offerings to enhance customer relationship management and automation capabilities. Salesforce has a steady subscription revenue growth driven by AI adoption. Salesforce recently expanded its subscription platform with advanced AI agents and workflow automation tools to compete directly with specialized automation providers like ServiceNow. Pegasystems remains a formidable competitor in the enterprise workflow subscription market, leveraging its GenAI Blueprint solution to accelerate application development. Pegasystems continues expanding its subscription-based platform with AI-powered decisioning capabilities, positioning it as a key rival for enterprise automation budgets in the growing subscription economy.
NOW's Share Price Performance, Valuation and Estimates
ServiceNow's shares have declined 6.3% year to date, underperforming the broader Zacks Computer & Technology sector's return of 11.4% but beating the Zacks Computer- IT services industry's decline of 9.9%.
NOW Stock Performance
Image Source: Zacks Investment Research
ServiceNow stock is trading at a premium, with a forward 12-month Price/Sales of 14.19X compared with the sector's 6.72X. NOW has a Value Score of F.
NOW Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ServiceNow's third-quarter 2025 earnings is pegged at $4.22 per share, which decreased by a penny over the past 30 days. This indicates a 13.44% increase year over year.
ServiceNow, Inc. Price and Consensus
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
The consensus mark for NOW's 2025 earnings is pegged at $16.79 per share, which has increased by 25cents over the past 30 days, suggesting 20.62% year-over-year growth.NOW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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