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ServiceNow - AI Stock Analysis
Analysis generated June 14, 2025
ServiceNow, Inc. (NYSE: NOW), headquartered in Santa Clara, California, provides cloud computing solutions, helping companies manage digital workflows for enterprise operations. The company is known for its robust IT service management (ITSM) platform but has diversified into IT operations management, IT business management, and other enterprise solutions. ServiceNow aims to enable digital transformation for its enterprise clients by simplifying complex workflows and providing a unified platform for various IT and business operations.
Fundamental Analysis
ServiceNow reported a revenue of $3.09 billion in the last quarter, reflecting a 4.43% increase compared to the previous quarter and an 18.63% increase over the same quarter last year. This growth in revenue suggests a positive trajectory for the company.
The net income for the last quarter was $460 million, showing a significant 19.79% increase quarter-over-quarter and 32.56% year-over-year. These numbers highlight strong profitability despite potential macroeconomic challenges.
However, the EBITDA of $451 million for the last quarter indicates a 27.49% decrease compared to the previous quarter but a 3.44% increase over the same quarter last year. Although the year-over-year growth is positive, the quarter-over-quarter decrease raises some concerns about operational efficiency or increased costs.
The current price-to-earnings (P/E) ratio stands at 138.91, suggesting that the stock might be overvalued. A high P/E ratio can be seen as a bearish signal, indicating that investors might be paying a premium for future growth.
Additionally, recent insider selling activity could be perceived as a bearish signal, as it may indicate that those with the most knowledge about the company’s performance are cashing out their shares.
Technical Analysis
The current stock price is $988.66, which has decreased by 3.72% compared to a month ago but has increased by 35.70% compared to a year ago. This indicates a positive long-term trend but potential short-term concerns.
The 10-day Simple Moving Average (SMA10) is 1,013.39, lower than the previous SMA10 of 1,015.80, suggesting a potential downward trend in the stock price.
The Relative Strength Index (RSI) is at 84, indicating a potential overbought condition, which is typically seen as a bearish signal as the stock might be due for a pullback.
Alternative Data Analysis
ServiceNow has 573 open positions, and this number has been stable over the last few months, indicating workforce stability. Employee sentiment is also notably high, with 88% of employees having a positive outlook about the company's future.
While the company's website attracts an estimated 3.5 million visitors, there has been a 7% decline over the last few months, which may indicate potential customer attrition.
Conversely, the daily downloads of ServiceNow's mobile apps have increased by 52%, suggesting a growing engagement with mobile platforms. ServiceNow also has a rising social media presence, with a 9% increase in Instagram followers to 53,000, though Twitter followers have remained stable at 52,000.
Lastly, the AltIndex AI score for ServiceNow stands at 69, indicating a buy signal. This AI score encompasses various aspects of fundamental, technical, and alternative data analysis to provide a robust prediction of stock performance.
Conclusion
In summary, ServiceNow exhibits strong revenue and net income growth, but the decrease in EBITDA and high P/E ratio may signal potential concerns. The recent insider selling activity could also be seen as a bearish signal. Technically, the current trend appears mixed, with both long-term positive signs and short-term negative indicators like a bearish trend and high RSI. The alternative data analysis provides a balanced view: while there are some worrisome trends like a decrease in web traffic, the significant increase in mobile app engagement and positive employee sentiment are encouraging.
Given these mixed signals, potential investors should weigh the high growth against the high valuation and recent insider selling. As per the AltIndex AI score of 69, the stock is viewed as a buy, but it is advisable to keep a close watch on various performance indicators to make an informed decision.
Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.
