ServiceNow (NOW) shows strong growth but faces headwinds from declining margins, making it fairly valued rather than cheap, leading the creator to hold off on buying.
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The creator analyzes ServiceNow (NOW), questioning if it's cheap. While acknowledging strong customer reten...
Jul 27, 2026
The creator analyzes ServiceNow (NOW), questioning if it's cheap. While acknowledging strong customer retention and growth metrics like subscription revenue and ACV, they highlight two red flags: declining gross margins attributed to AI costs and worsening operating margins due to acquisition charges and stock-based compensation. Despite these concerns, the creator notes that adjusted ServiceNow appears cheaper, trading near mid-20s P/E and EV/EBIT multiples, with a reasonable free cash flow yield. However, they are not yet a buyer, suggesting the stock is fairly valued rather than cheap.
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