ServiceNow, Inc. (NYSE: NOW) just wrapped up one of its most important weeks of 2025. Shareholders have officially approved a 5‑for‑1 stock split, the company is pushing deeper into AI and security with the planned acquisition of Veza, and Wall Street’s 12‑month price targets still sit well above the current share price. [1]
As of the close on Friday, 5 December 2025, ServiceNow stock finished at $854.36, up about 1.9% on the day, and tacked on another gain in after‑hours trading after the split vote. [2] The rally capped six consecutive up days, but the stock remains roughly 29% below its 52‑week high near $1,198, reflecting the broader 2025 reset in high‑growth software names. [3]
Below is a deep dive into what changed on 6 December 2025, how the fundamentals look after Q3, and what analysts are actually modeling for the next year.
Where ServiceNow stock stands now
Recent trading paints a “strong business, bruised multiple” picture:
- Price: $854.36 at the 5 December close; about $858 in after‑hours trading. [4]
- Market cap: roughly $177 billion. [5]
- 52‑week range: about $679 to $1,198, with shares still well below the January high. [6]
- 12‑month performance: down ~24% over the past year despite solid revenue and earnings growth. [7]
- Volatility: 5‑year beta of 0.97, meaning price swings are similar to the broader market. [8]
- Short interest: only about 1.7% of shares outstanding, low for a high‑growth tech stock. [9]
In other words, this is a big, profitable software platform that’s come off a frothy valuation but still trades at a premium to most of its peers.
5‑for‑1 stock split: key dates and what it actually does
On 5 December, shareholders “overwhelmingly” approved a 5‑for‑1 split of ServiceNow’s common stock. [10]
Mechanics and timeline
- Record date: 16 December 2025
- Distribution date: after the close on or about 17 December 2025
- Split‑adjusted trading: expected to begin 18 December 2025
For every 1 share held, investors will receive 4 additional shares, ending with 5 shares total at roughly one‑fifth of the pre‑split price. [11]
Crucially:
- No change in total economic value. Market cap stays the same; ownership percentages don’t move. A $854 share pre‑split becomes ~five shares around $171 each, assuming no other price moves.
- Liquidity and optics do change. A lower absolute price often makes it easier for smaller investors to build positions and can make options markets more accessible.
Stock splits alone don’t create value, but they often coincide with management confidence in the long‑term trajectory. In this case, the split follows a “beat‑and‑raise” Q3 and guidance that still calls for 20%+ subscription revenue growth for 2025. [12]
Q3 2025: growth still above 20% with rising margins
ServiceNow’s Q3 2025 results (for the quarter ended 30 September) were strong almost across the board:
- Total revenue: about $3.41 billion, up ~22% year over year. [13]
- Subscription revenue: roughly $3.30 billion, growing ~21% YoY in both GAAP and constant currency terms. [14]
- Professional services and other: around $108 million, up nearly 30%. [15]
- Non‑GAAP operating income: about $1.1 billion with a 33.5% margin, up from 31% a year ago. [16]
- Free cash flow in Q3: roughly $592 million, up high‑teens percent year over year. [17]
On a trailing 12‑month basis, third‑party data show $12.67 billion in revenue and $1.73 billion in net income, implying an EPS of about $8.27 and free cash flow near $3.96 billion. [18]
Management also raised 2025 guidance:
- Full‑year subscription revenue: now expected at $12.835–$12.845 billion, roughly 20–21% growth. [19]
- Full‑year non‑GAAP operating margin: targeted around 31% with strong free‑cash‑flow conversion. [20]
Analysts at Futurum Group characterized the quarter as another “beat‑and‑raise”, driven by AI‑related upsell, improved federal performance and broader platform adoption across workflows and CRM. [21]
So the growth engine is still doing its thing: 20%+ top‑line expansion, improving margins, and very healthy cash generation.
AI, Veza and the “control tower” strategy
ServiceNow has leaned hard into an identity for itself as “the AI control tower for business reinvention” – a platform that can sit above a company’s clouds, data sources and point solutions to orchestrate how work actually flows. [22]
That story gained more weight with the planned acquisition of Veza, announced on 2 December:
- Veza is described as an AI‑native identity security platform with a patented “Access Graph” that maps who (or what) can access which systems and data, including AI agents and machine identities. [23]
- ServiceNow plans to plug Veza into its Security and Risk portfolio and AI Control Tower, aiming to give enterprises a single pane of glass over permissions across cloud apps, data stores and autonomous agents. [24]
- The goal is to implement “least privilege” access at scale – exactly the sort of boring but crucial plumbing that determines whether AI deployments are safe or disastrous. [25]
The Veza deal joins a run of AI‑centric initiatives:
- Deeper integrations with Microsoft to coordinate enterprise AI workflows and governance. [26]
- Expanding AI‑driven workflows into CRM, CPQ (configure‑price‑quote), and industry‑specific solutions, highlighted in ServiceNow’s own Q3 materials. [27]
The strategy is pretty clear: own the workflow layer and become the place where AI agents, people and legacy systems all meet. If that works, identity security (Veza), AI orchestration (Control Tower) and workflow automation become one intertwined story.
Valuation: still premium, even after the pullback
The question that keeps popping up in analyst notes is not “Is ServiceNow a good business?” (it is) but “How much are investors paying for that growth?”
Key valuation markers from recent data:
- Trailing P/E: about 103x
- Forward P/E: around 44x
- Price‑to‑sales (TTM): roughly 14x
- Price‑to‑free‑cash‑flow: about 45x [28]
These are rich multiples, even by software standards. A Simply Wall St valuation piece pegs ServiceNow’s current P/E near 98–100x, versus roughly 32x for the broader U.S. software industry and around 54x for a peer group, and suggests a “fair” P/E closer to 46x. [29]
Interestingly, the same platform highlights a popular narrative that assigns ServiceNow a fair value estimate around $1,155 per share, implying the stock could be roughly 29% undervalued versus its early‑December close near $822 when that analysis was written. [30]
So even the valuation specialists don’t fully agree:
- On earnings multiples alone, NOW looks expensive relative to sector norms.
- On discounted cash flow and growth assumptions, some models still see meaningful upside from current levels.
That tension is pretty much the ServiceNow story in one sentence: great fundamentals, but priced like they have to stay great for a long time.
What Wall Street is forecasting for NOW stock
Most major brokerages remain squarely in the bullish camp.
Across several consensus trackers:
- Investing.com:
- 41 analysts, overall rating “Strong Buy.”
- Average 12‑month target: about $1,147.
- High / low: roughly $1,332 / $766.
- Implied upside vs. $854.36: ~34%. [31]
- Zacks price‑target summary:
- 38 analysts, average target around $1,152.
- Forecast range from about $766 to $1,332. [32]
- TipRanks:
- Average target near $1,154 with a high of ~$1,315 and low around $734.
- Implied upside in the mid‑30% range. [33]
- Benzinga / TTM sell‑side snapshot:
- Notes a consensus Buy rating with a target around $1,129, based on 32 analysts, with the most aggressive target at $1,300 and the lowest near $724. [34]
- TickerNerd aggregation:
- 53 analysts, median target around $1,150 and overall “Strong Buy” consensus, with 41 Buys, 4 Holds and 1 Sell. [35]
In plain language: most analysts think the stock is still worth 30–40% more than today’s price over the next 12 months, and only a tiny minority are outright bearish.
Worth noting for after the split: those targets are pre‑split prices. If the split goes through as planned, the nominal targets will eventually be divided by five, but the percentage upside remains identical.
Trading backdrop and sentiment
Beyond fundamental models, sentiment around NOW has been noisy:
- Zacks recently flagged ServiceNow as one of the most‑searched stocks on its platform, highlighting elevated retail and institutional interest into December. [36]
- MarketWatch has documented a string of December sessions where the stock either modestly outperformed or underperformed peers like Salesforce and Oracle, but the common thread has been solid liquidity and daily volumes near or above the 1.3–1.4 million share average. [37]
- Despite six straight days of gains into 5 December, the stock still sits far below its 2025 peak, suggesting more of a recovery bounce than frothy euphoria (so far). [38]
That mix – high search interest, healthy volumes, a big upcoming split, and a still‑elevated valuation – is exactly the sort of setup where volatility can spike around any surprise in guidance or macro data.
Key risks that could challenge the bullish case
Even fans of the stock are pretty explicit about the downside scenarios.
1. Valuation risk
Analysts and platforms like Simply Wall St warn that a near‑100x trailing P/E and 40+ forward P/E leave little room for execution mistakes. [39] If growth slows below the ~20% trajectory embedded in current models, multiples can compress quickly – and they already have from the 2024–early‑2025 highs.
2. Macro and public‑sector exposure
ServiceNow’s own guidance commentary has flagged tightening U.S. federal budgets and government shutdown risk as headwinds that can delay deals, particularly in Q4 2025. [40] Benzinga likewise notes that roughly 10% of revenue coming from the public sector is a double‑edged sword: sticky, but politically sensitive. [41]
3. Competition in AI platforms
Giants like Microsoft and Salesforce are building out their own AI agents and workflow platforms. Benzinga points out that ServiceNow’s forward P/E is materially higher than Microsoft’s or Salesforce’s, even though those larger rivals also offer end‑to‑end AI platforms. [42] If customers consolidate on competitor stacks, growth expectations could prove too optimistic.
4. Integration and execution risk on AI acquisitions
ServiceNow has been on an AI‑driven shopping spree. The Veza deal adds a powerful identity security layer, but the company itself warns in its forward‑looking statements that it faces the usual integration, retention and technology assimilation risks that come with acquisitions. [43]
5. Market‑wide factors
Higher‑for‑longer interest rates, rotations out of growth, or a broader risk‑off environment would all hit richly valued software names first. With NOW trading at premium multiples, it’s especially sensitive to any macro narrative shift.
Bottom line: what 6 December 2025 tells us about NOW
Put together, the latest developments say this:
- The business is executing well. Q3 showed 20%+ revenue growth, rising margins and strong free cash flow, with management confident enough to lift full‑year guidance. [44]
- The strategy is increasingly AI‑centric and security‑heavy. The Veza acquisition, Microsoft integrations and AI Control Tower narrative are all about owning the intersection of workflows, agents and identity security. [45]
- Wall Street is mostly bullish. Consensus 12‑month targets around $1,150 imply mid‑30% upside from current levels, and most analysts rate the stock a Buy or Strong Buy, though there are a few Holds and at least one Sell. [46]
- Valuation remains the main debate. Even after a sizeable drawdown from the highs, NOW trades at a steep premium to the software sector, and any stumble on growth, AI monetization or federal demand could hit the stock hard. [47]
For investors watching ServiceNow into 2026, the stock is essentially a bet that:
- AI‑driven workflow automation really does become “the operating system of the enterprise,” and
- ServiceNow remains one of the primary control towers coordinating that system.
If those conditions hold, the combination of high growth, strong margins and an upcoming split could keep NOW in the spotlight on both Wall Street and Google News. Just remember: brilliant businesses and good investments overlap a lot, but not perfectly – the gap between them is almost always valuation.
References
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