ServiceNow, Inc. (NOW) Stock Analysis

Analysis from 10-Q filed 2025-10-30. Data as of Q2 2026.

Overall Grade: F (Concerning)

Grade F (Concerning). ROIC 8.4%. FCF margin 31.0%. D/E 0.6x. Source: 10-Q filed 2025-10-30.

Metric	Value	Context
ROIC	8.4%	Near cost of capital
FCF Margin	31.0%	Strong cash generation
Debt/Equity	0.6x	Moderate leverage

ROIC 8.4% — Top 50% of sector peers. FCF margin 31.0% — Top 10%.

Explore ServiceNow, Inc.: Earnings History | Filings

Programmatic access: Available via MCP at mcp.metricduck.com. Tools for NOW: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_changes, get_metric_history, compare_companies, screen_filing_signals.

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Profitability: ServiceNow, Inc. earns 8.4% ROIC, Top 50% in Technology

ROIC TTM 8.4%, sector median 3.6%, Top 50%. DuPont: NOPAT margin 8.1% × asset turnover 0.6x. Gross margin 74.8%. Operating margin 11.4%. Source: 10-Q filed 2025-10-30.

Metric	NOW	Rating	Context
Return on Invested Capital (ROIC)	8.4%	Adequate	Above sector median of 3.6%
Return on Equity (ROE)	14.0%	Adequate	Moderate equity returns
Gross Margin	74.8%	Excellent	Strong pricing power
Operating Margin	11.4%	Good	Moderate operational efficiency

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Cash Flow: ServiceNow, Inc. generates $4.6B FCF at 31.0% margin, positive NaN/8 quarters

FCF TTM $4.6B. FCF margin 31.0%, Top 10%. OCF/Net income 3.2x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2025-10-30.

Metric	NOW	Rating	Context
Free Cash Flow Margin	31.0%	Excellent	Excellent cash conversion
Free Cash Flow (TTM)	$4.6B	Good	Positive cash generation
OCF/Net Income	3.2x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: ServiceNow, Inc. at 0.6x leverage

Debt/Equity 0.6x. Total debt $7.5B, cash & investments $4.7B. Source: 10-Q filed 2025-10-30.

Metric	NOW	Rating	Context
Debt to Equity	0.6x	Good	Moderate leverage
Net Cash Position	$-2.9B	Warning	Net debt position

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Valuation: ServiceNow, Inc. trades at 43.2x earnings

P/E 43.2x. EV/Sales 10.2x. FCF yield 6.3%. Source: 10-Q filed 2025-10-30.

Metric	NOW	Rating	Context
P/E Ratio	43.2x	Adequate	Premium valuation
EV/Sales	10.2x	Warning	Growth premium priced in
FCF Yield	6.3%	Good	Attractive cash return

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Capital Allocation: ServiceNow, Inc. returns 4.7% shareholder yield

Total shareholder yield 4.7% (buyback 4.7%). Capital returned $3.4B TTM. Source: 10-Q filed 2025-10-30.

Metric	NOW	Rating	Context
Total Shareholder Yield	4.7%	Good	Dividend + buyback yield combined
Buyback Yield	4.7%	Good	Active share repurchases
Total Capital Returned (TTM)	$3.4B	Good	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	8.4%	Top 50%	2.4x above
Free Cash Flow Margin	31.0%	Top 10%	3.6x above
Gross Margin	74.8%	Top 25%	1.5x above
Operating Margin	11.4%	Top 50%	2.3x above
Return on Equity (ROE)	14.0%	Top 50%	2.7x above
P/E Ratio	43.2x	N/A	-

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Financial Scorecard

Metric	NOW	Rating	Sector Context
Return on Invested Capital (ROIC)	8.4%	Adequate	Top 50% of sector (median: 3.6%)
Free Cash Flow Margin	31.0%	Excellent	Top 10% of sector (median: 8.7%)
Gross Margin	74.8%	Excellent	Top 25% of sector (median: 51.3%)
Debt to Equity Ratio	60.2%	Good	Moderate leverage
P/E Ratio (Price-to-Earnings)	43.2x	Adequate	High expectations priced in
Free Cash Flow Yield	6.3%	Good	Solid cash yield

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Frequently Asked Questions

Q: What is ServiceNow, Inc.'s Return on Invested Capital (ROIC)?

ServiceNow, Inc. (NOW) has a trailing twelve-month Return on Invested Capital (ROIC) of 8.4%. Sector median 3.6%. Source: 10-Q filed 2025-10-30.

Q: What is ServiceNow, Inc.'s Free Cash Flow Margin?

ServiceNow, Inc. (NOW) has a free cash flow margin of 31.0%, generating $4.6 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2025-10-30.

Q: What is ServiceNow, Inc.'s P/E ratio and how does it compare to peers?

ServiceNow, Inc. (NOW) trades at a P/E ratio of 43.2x, which is above the sector median of N/A. EV/Sales 10.2x. FCF yield 6.3%. Source: 10-Q filed 2025-10-30.

Q: How much debt does ServiceNow, Inc. have?

ServiceNow, Inc. (NOW) has a debt-to-equity ratio of 0.6x with total debt of $7.5 billion. Net debt $2.9 billion. Source: 10-Q filed 2025-10-30.

Q: What is ServiceNow, Inc.'s revenue and earnings growth?

ServiceNow, Inc. (NOW) grew revenue by 22.2% year-over-year. EPS +0.8% YoY. Source: 10-Q filed 2025-10-30.

Q: Is ServiceNow, Inc. buying back stock?

ServiceNow, Inc. (NOW) repurchased $3.4 billion of stock over the trailing twelve months. This represents a buyback yield of 4.7%. Source: 10-Q filed 2025-10-30.

Q: How does ServiceNow, Inc. compare to competitors in Technology?

Compared to other companies in Technology, ServiceNow, Inc. (NOW) shows: ROIC 8.4%, sector median 3.6% (Top 50%). FCF margin 31.0%, sector median 8.7% (Top 10%). Gross margin 74.8%, 23.4pp above sector median. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.

Q: What warning signs should I watch for with ServiceNow, Inc.?

Quantitative warning flags for ServiceNow, Inc. (NOW): 1) ROIC declining -7.4% over 8 quarters. Source: 10-Q filed 2025-10-30.

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Data Source: Data sourced from 10-Q filed 2025-10-30. TTM metrics as of Q2 2026.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.