ServiceNow (NOW) shares have decreased by 29.9% over the past year, significantly trailing the Zacks Computer and Technology sector’s gain of 25.1% and the Zacks Computers IT Services industry’s decline of 19.1%. This drop is largely due to a tough macroeconomic landscape and slowing subscription revenue growth. For 2025, the company projects subscription revenues to be between $12.835 billion and $12.845 billion, marking a growth rate of 20.5% year-over-year, which is slower than the 23% growth rate achieved in 2024.
Moreover, ServiceNow’s current valuation leans towards being overvalued, evidenced by a Value Score of F and a forward 12-month price/sales ratio of 9.77X, compared to the broader sector’s 7.42X. The company’s stock is trading below the 50-day and 200-day moving averages, indicating a bearish trend.
On a positive note, the Zacks Consensus Estimate for NOW’s fourth-quarter 2025 earnings is set at 87 cents per share, reflecting a growth of 19.2% compared to the previous year. For 2026, earnings estimates show potential growth with a projected $4.04 per share, suggesting a 16.6% increase over 2025 projections. While the future outlook depends on ServiceNow’s ability to navigate the challenging economic climate, its expanding portfolio and partnerships could enhance revenue growth moving forward.
