ServiceNow

NOW

Software - Application · Technology

Price

$103.24

-0.77 (-0.74%)

Market Cap

$106.47B

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count rising — dilution

+3.1% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 1.02B (2021) → 1.05B (2025)

ServiceNow makes software that helps large companies manage their internal operations. Its main product is a cloud-based platform that tracks and automates tasks like IT support tickets, employee requests, and business workflows. Large enterprises, governments, and healthcare organizations are its primary customers.

The company earns money almost entirely through subscriptions, where customers pay a recurring annual fee to use its platform. ServiceNow operates globally, with strong revenue across North America and Europe, and generates over $10 billion in annual revenue. Its competitive moat comes from how deeply embedded its platform becomes inside a customer's daily operations, making it costly and disruptive to switch to a competitor. The key growth driver is the expansion of artificial intelligence features within its platform, which ServiceNow is betting will push existing customers to upgrade to higher-priced subscription tiers — though slowing enterprise IT budgets remain a real risk to that growth.

Winston Score History

Politician Trades

48 trades / 12mo

24 Congressional buys and 24 sells on NOW in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+22.1% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+2.3% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$3.0B/ year

↑ Rising (+16% vs prior year)

22.3% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

0.2%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$2.7B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

ServiceNow is putting 22% of revenue into R&D and that number is rising. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

75.1%

Premium pricing power — 75.1% gross margin

Operating Margin

13.3%

Healthy — 13.3% operating margin

ROCE

3.8%

Weak — 3.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+21.7%

Fast-growing sales (21.7% YoY)

EPS YoY

+13.9%

Earnings growing (13.9% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

309%

Turns 309% of profit into real cash

FCF Margin

33.2%

Converts sales into free cash efficiently (33.2%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.13

Conservative — low debt load (0.13)

Interest Cover

156.33x

Comfortably covers interest (156.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

61.1x

Expensive — P/E 61.1

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+45.4

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (61.1 → 15.7)

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Dividends

Not applicable for this business.

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