ServiceNow Stock Just Got 35% Cheaper, Are You Buying?

Core Viewpoint - ServiceNow (NOW) stock presents an attractive investment opportunity due to its high margins, indicative of pricing power and cash generation ability, available at a discounted price [2][10]. Company Overview - ServiceNow is a leading enterprise software company that provides digital workflow solutions aimed at automating operations and enhancing efficiency, supported by a widely adopted platform and strong recurring revenue [3]. Recent Performance - Despite a 23% decrease in stock value this year, NOW has become 35% less expensive based on its Price-to-Sales (P/S) ratio compared to one year ago [4]. - In Q3 2025, ServiceNow recorded 103 deals exceeding $1 million in net new annual contract value, expanding its high-value customer base to 553 accounts with over $5 million in Annual Contract Value (ACV) [5]. Financial Metrics - Remaining Performance Obligations reached $24.3 billion, indicating strong revenue visibility, and management has raised its full-year cash flow margin guidance [5]. - The company boasts a 97% customer renewal rate, underscoring the durability of its solutions [5]. - ServiceNow has demonstrated a 21.1% revenue growth over the last twelve months and a 22.3% growth over the last three-year average [10]. Valuation - NOW stock is currently offered at a P/S multiple of 13.4, representing a 35% markdown compared to one year ago [10].