Core Viewpoint - ServiceNow's stock has significantly underperformed in 2025, with a year-to-date decline of 25.9%, compared to the Zacks Computer & Technology sector's decline of 14.4% and the Computers – IT Services industry's decline of 18.9% [2] Company Performance - The macroeconomic environment has worsened due to tariffs imposed by the U.S. government, negatively impacting ServiceNow's federal business and leading to an expected unfavorable forex impact of approximately $175 million for 2025 [3] - For Q1 2025, subscription revenues are projected to be between $2.995 billion and $3 billion, indicating a year-over-year growth of 18.5-19% on a GAAP basis, while unfavorable forex is expected to reduce revenues by $40 million [10] - Subscription revenues for 2025 are anticipated to be between $12.635 billion and $12.675 billion, reflecting an 18.5% to 19% increase from 2024 [11] Strategic Developments - ServiceNow has launched the Yokohama platform, enhancing its portfolio with new AI agents across various domains, which is expected to improve productivity and client acquisition [5] - The partnership with Alphabet's Google Cloud has been expanded to include ServiceNow's Now Platform and a full suite of workflows available on Google Cloud Marketplace [6] - Collaborations with NVIDIA have led to the development of AI agents for the telecom industry, integrating advanced AI technologies into ServiceNow's offerings [7] - ServiceNow is actively pursuing acquisitions, including plans to acquire Logik.ai and the Quality 360 solution from Advania, aimed at strengthening its capabilities in AI and manufacturing [9] Financial Outlook - The Zacks Consensus Estimate for 2025 earnings is $16.23 per share, reflecting a 16.59% increase over 2024, despite a recent downward revision [12] - The consensus for 2025 revenues is set at $13 billion, indicating an 18.39% growth compared to 2024 [13] Valuation and Market Position - ServiceNow's stock is considered overvalued, with a Value Score of F, and is trading at a forward Price/Sales ratio of 11.86X, significantly higher than the sector average of 5.34X [14] - The stock is currently exhibiting a bearish trend, trading below both the 200-day and 50-day moving averages [14] - Despite a strong GenAI portfolio and partner base, the unfavorable forex environment and high valuation make the stock less attractive for value investors, leading to a Zacks Rank of 4 (Sell) [15]