{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "NOW",
  "name": "ServiceNow, Inc.",
  "url": "https://frontierpicks.com/dossiers/NOW/",
  "json_url": "https://frontierpicks.com/dossiers/NOW.json",
  "status": "WATCHLIST",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a3",
    "n": 3
  },
  "current_thesis": "ServiceNow's shares are more likely to lag the S&P 500 into the January 2027 report as slowing backlog growth and AI-competition fears outweigh a third-quarter beat. Fourth-quarter cRPO growth against the 18.5% guide decides the case.",
  "invalidation_trigger": "A daily close above $118.17, about 15% over the 2026-11-11 close and above the 200-day average, would show the shares leading the S&P 500. So would fourth-quarter cRPO growth at or above the 19.8% analysts expected before the October guide.",
  "catalyst_date": "2026-11-24",
  "portfolio": null,
  "pick": null,
  "themes": [
    "ai-enterprise-software"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "ServiceNow lays off more employees as its shares fall 35% in under two weeks",
      "url": "https://www.calcalistech.com/ctechnews/article/s1t03axtg",
      "date": "2026-11-06"
    },
    {
      "title": "ServiceNow CFO Calls AI Disruption Fears “False.” The Stock Is Down 32% Since Its Report",
      "url": "https://www.tikr.com/blog/servicenow-cfo-calls-ai-disruption-fears-false-the-stock-is-down-32-since-its-report",
      "date": "2026-11-06"
    },
    {
      "title": "Workday",
      "url": "https://newsroom.workday.com/2026-11-02-Workday-to-Announce-Fiscal-2027-Third-Quarter-Financial-Results-on-November-24,-2026",
      "date": "2026-11-02"
    },
    {
      "title": "BNP Paribas Adjusts ServiceNow Price Target to $143 From $160",
      "url": "https://www.marketscreener.com/news/bnp-paribas-adjusts-servicenow-price-target-to-143-from-160-ce785fdbdf89f122",
      "date": null
    },
    {
      "title": "61% Upside for ServiceNow? Argus Thinks So, and Here’s How",
      "url": "https://www.tikr.com/blog/61-upside-for-servicenow-argus-thinks-so-and-heres-how",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Q3 2026 subscription revenue was $3,988 million, up 21%; cRPO was $13.65 billion, up 20.5%; non-GAAP operating margin was 32.5%.",
      "source": "ServiceNow Q3 2026 earnings release (8-K)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "Q4 2026 guidance: subscription revenue $4,245–$4,255 million, cRPO growth 18.5%, non-GAAP operating margin 32%.",
      "source": "ServiceNow Q3 2026 earnings release (8-K)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "ServiceNow shares fell about 35% between 2026-10-23 and 2026-11-05; the fourth-quarter cRPO guide of 18.5% compared with a 19.8% analyst expectation.",
      "source": "Calcalist Ctech, 2026-11-06",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Severance and related costs were $87 million in Q3 2026 and $167 million in the first nine months, against $24 million and $53 million a year earlier.",
      "source": "ServiceNow Q3 2026 10-Q, as reported by Calcalist Ctech",
      "as_of": "2026-09-30"
    },
    {
      "claim": "ServiceNow repurchased no common stock in Q3 2026, against $584 million in Q3 2025.",
      "source": "ServiceNow Q3 2026 earnings release (8-K)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "At $102, ServiceNow traded at 22.0 times forward earnings, with an average analyst target of $155.",
      "source": "TIKR, updated 2026-11-06",
      "as_of": "2026-11-06"
    },
    {
      "claim": "BNP Paribas cut its ServiceNow price target to $143 from $160.",
      "source": "MarketScreener",
      "as_of": "2026-10-30"
    },
    {
      "claim": "Chief People and AI Enablement Officer Jacqueline Canney sold 1,289 shares at $101.70 in the open market under a Rule 10b5-1 plan.",
      "source": "SEC Form 4 filed 2026-11-10",
      "as_of": "2026-11-09"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Technology",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-28",
              "restated": null,
              "value_musd": 4106,
              "yoy_pct": 20.5
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-23",
              "restated": null,
              "value_musd": 3987,
              "yoy_pct": 24
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-23",
              "restated": null,
              "value_musd": 3770,
              "yoy_pct": 22.1
            },
            {
              "end": "2025-12-31",
              "filed": "2026-01-29",
              "restated": null,
              "value_musd": 3568,
              "yoy_pct": 20.7
            },
            {
              "end": "2025-09-30",
              "filed": "2025-10-30",
              "restated": null,
              "value_musd": 3407,
              "yoy_pct": 21.8
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-24",
              "restated": null,
              "value_musd": 3215,
              "yoy_pct": 22.4
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-28",
              "restated": null,
              "pct": 70.5
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-23",
              "restated": null,
              "pct": 70.7
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-23",
              "restated": null,
              "pct": 75.1
            },
            {
              "end": "2025-12-31",
              "filed": "2026-01-29",
              "restated": null,
              "pct": 76.6
            },
            {
              "end": "2025-09-30",
              "filed": "2025-10-30",
              "restated": null,
              "pct": 77.3
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-24",
              "restated": null,
              "pct": 77.5
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-28",
              "restated": null,
              "pct": 9.4
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-23",
              "restated": null,
              "pct": 4.1
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-23",
              "restated": null,
              "pct": 13.3
            },
            {
              "end": "2025-12-31",
              "filed": "2026-01-29",
              "restated": null,
              "pct": 12.4
            },
            {
              "end": "2025-09-30",
              "filed": "2025-10-30",
              "restated": null,
              "pct": 16.8
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-24",
              "restated": null,
              "pct": 11.1
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 370
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "four_quarters_end": "2026-09-30",
          "value_musd": 277,
          "four_quarters_musd": 1445
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "first_end": "2025-12-31",
          "value_musd": 5334
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "first_end": "2025-12-31",
          "value_musd": 584
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "first_end": "2025-12-31",
          "value_musd": 4750
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "base_end": "2025-09-30",
          "pct": -0.4
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 4607
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 7524,
          "composition": "long-term debt plus short-term borrowings"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": -2917
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 7733,
          "yoy_pct": 19.7
        },
        "backlog": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 29700,
          "yoy_pct": 22.2
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 2222
        },
        "inventory": {
          "status": "not reported"
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 13096
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "value_musd": 106135.5
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "value_musd": 109052.5
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 7.1
        },
        "ev_ebit": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 73
        },
        "pe": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 73.5
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 8.1
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "pct": 4.5
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 2.68,
      "days_to_cover": 2.6,
      "change_pct": -6.2
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 1880594.88,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 3000144,
          "sold_usd": 8658075.79,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nServiceNow's shares are more likely to lag the S&P 500 than lead it before the fourth-quarter report expected around 2027-01-27. Backlog growth is slowing, and each new AI product from a model lab knocks the stock down. That report, measured against the company's 18.5% guide for backlog growth, decides the case. Workday's results on 2026-11-24 are the nearer read on enterprise software demand.\n\nThe shares closed at $102.76 on 2026-11-11, down 19.2% over three months in adjusted daily closes. ServiceNow has released no financial results since 2026-10-28. Since then the shares have moved with sentiment. Benzinga tied the fall on 2026-11-10 to Anthropic's launch of new Claude tools, and the rise on 2026-11-11 to a tech-led rebound in software stocks.\n\nThe rating is Low because the open question is how long growth above 20% lasts, and nothing before late January answers it. A third-quarter beat on every guided metric did not prevent a 35% fall between 2026-10-23 and 2026-11-05, as measured by Calcalist's Ctech.\n\nAt $102 on 2026-11-06, TIKR put the shares at 22.0 times forward earnings. That is a low multiple for a company whose subscription revenue grew 21% last quarter, so the price already assumes a sharp slowdown.\n\n## Bull Case\n\n- **The third quarter beat every guided metric.** Subscription revenue was $3,988 million, up 21%, against a $3,975–$3,980 million guide, according to the 2026-10-28 earnings release. The non-GAAP operating margin was 32.5% against a 31% guide.\n- **Management says the guide reflects timing.** Chief financial officer Gina Mastantuono said early renewals produced about half of the third-quarter backlog beat and pulled deals out of the fourth quarter, per The Motley Fool on 2026-10-29. She guided fourth-quarter subscription growth to about 21.5% in constant currency.\n- **The AI sales target went up again.** ServiceNow raised its 2026 target for net new artificial-intelligence (AI) annual contract value to $1.7 billion, up from $1 billion at the start of the year, per the 2026-10-28 release.\n- **Valuation and targets now sit far apart.** On 2026-11-06 TIKR put the average analyst target at $155. Argus Research reiterated a Buy rating and a $170 target on 2026-11-03, per Benzinga.\n\n## Bear Case\n\n- **Backlog growth keeps slowing.** Growth in current remaining performance obligations (cRPO, contracted revenue due within 12 months) went from 22.5% to 21% to 20.5% across the first three quarters of 2026, per The Motley Fool. The fourth-quarter guide of 18.5% is below the 19.8% analysts expected, per Ctech.\n- **The revenue guide trailed expectations.** Investing.com set the $4,245–$4,255 million fourth-quarter subscription guide against a $4.36 billion analyst expectation on 2026-10-28.\n- **AI launches by model labs hit the shares.** Benzinga reported on 2026-11-10 that ServiceNow fell as software stocks slid after Anthropic launched new Claude tools, which revived fears of AI competition.\n- **Layoffs bring another charge.** On 2026-11-06 Ctech reported a new global round of cuts in the US, UK and India, with no headcount given. Severance and related costs were already $87 million in the third quarter, against $24 million a year earlier, per the quarterly filing.\n- **Buybacks stopped in the quarter.** ServiceNow repurchased no stock in the third quarter of 2026, against $584 million a year earlier, per the 2026-10-28 release.\n- **Targets are moving down.** BNP Paribas cut its target to $143 from $160 on 2026-10-30, per MarketScreener. Benzinga reported that Macquarie set $120 and UBS $140 on 2026-10-29.\n- **No insider buying at these prices.** The Form 4s filed on 2026-11-10 show shares withheld for tax at $101.97 on 2026-11-06 for officers including chief executive Bill McDermott and Mastantuono. They also show one open-market sale: 1,289 shares at $101.70 on 2026-11-09 by Jacqueline Canney, under a Rule 10b5-1 trading plan. None of these filings shows an open-market purchase.\n\n## Setup & Price Structure\n\nThe shares closed at $102.76 on 2026-11-11, up from $99.61 on 2026-11-10. That is 41.3% below the 52-week intraday high of $175.00 set on 2025-12-11. It is still above the 52-week closing low of $83.00 from 2026-04-10.\n\nThe drop came on 2026-11-05, when the shares fell from a $108.81 close on 2026-11-04 to $102.36. From 2026-11-05 to 2026-11-11 every close fell between $99.61 and $102.76.\n\nOn adjusted daily closes, both moving averages sit above the price as of 2026-11-11. The 200-day average is $113.96 and the 50-day average is $133.69. A return above the 200-day average would be the first sign that the decline since late October is reversing.\n\n## Catalyst Calendar\n\n- **2026-11-24:** Workday fiscal 2027 third-quarter report, after market close. It is the closest peer check on whether enterprise customers are renewing early or delaying, the issue behind ServiceNow's softer backlog guide, and the software group trades together on it.\n- **~2027-01-27 (est.):** ServiceNow fourth-quarter 2026 report and first 2027 guidance. It shows whether cRPO growth meets the 18.5% guide, how large the November 2026 layoff charges are, and how far subscription growth slows in 2027.\n\n## What Would Change Our Mind\n\nA daily close above $118.17, about 15% over the 2026-11-11 close and above the 200-day average, would show the shares leading the S&P 500. So would fourth-quarter cRPO growth at or above the 19.8% analysts expected before the October guide.\n\n## Correlation Notes\n\nServiceNow trades with large-cap application software, chiefly Workday and Salesforce. The group moves together on AI-agent launches by model labs, as the 2026-11-10 session showed. Workday's 2026-11-24 report is therefore likely to move ServiceNow even though it says nothing about ServiceNow's own backlog. The Armis acquisition adds exposure to sentiment around Cybersecurity software.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-12T16:21:33+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}