NOW
ServiceNow
Recurring SaaS
★ Quality 34/100Price today
$98.68
what the market pays
Worth
$109.22
calculated cycle value
Price is 10% below its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
IT Service · Customer · HR Workflows
$105.66
per share
How it's calculated
IV re-based after 5:1 split (Dec-2025). FCF ~$4.6B (35% margin), RPO $28.2B, ~8,800 customers, 78% gross margin. Trades ~23x owner-earnings — consistent with its growth and recurring revenue. C13: agentic AI risk, that's why it's a small position.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 26 peers
You pay 21.2x times this business's cash flow; its sector median is 21.9x.
11% below what Charlie thinks it's worth (23.5x) — that gap is your safety margin.
Why Discounted?
Its free cash flow is $4.50/share × 23.5x multiplier plus $3.56 in net cash = $109.22 in intrinsic value. Today's price of $98.68 is 11% below value — a moderate discount, a good spot to enter gradually.
The price is 10% off the calculated value. Close, but without the ideal discount.
It's fine to buy in pieces. Monthly DCA works well here.
For a bigger safety margin, wait for $87.38 or less.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$87.38
-20% off Value
🟡 Discounted
≤$103.76
-5% off Value
🟡 Today
$98.68
+11% Valor
Discounted
The price is close to value. There's no big discount, but it's reasonable to invest in pieces.
“The market is a device for transferring money from the impatient to the patient.”
— Warren Buffett
Model updated · July 2026
The business
The nervous system where big companies run all their internal work.
ServiceNow sells a cloud platform that automates companies' internal processes: IT support, human resources, customer service. It charges an annual subscription per module and user. With ~8,800 customers and $28.2B in contracts already signed but not yet billed, the cash comes in before it's spent.
The switching cost is brutal: once half a company's processes live inside the platform, ripping it out is major surgery. The 78% gross margin reveals that pricing power. It's not a monopoly, but putting down roots in the customer's daily operations is an advantage that pays for itself.
Revenue history
From $5.9B to $13.3B in 4 years — nearly 2.3x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $13.3B · FY2025
Of every $100 in sales, $87 goes to costs and operations; $13 is left as net profit (13% margin).
Catalysts and risks
Now Assist: monetizing AI inside the platform, the growth engine for 2026.
$28.2B in signed contracts pending (RPO) that already lock in future revenue.
Expansion beyond IT into human resources and customer service.
Agentic AI could rewrite the workflow layer where its business lives.
No real monopoly: Salesforce and Microsoft push on the same turf.
High multiple that demands growing 20% year after year without stumbling.
Charlie's note
“Paying 23 times earnings for a business growing 21% with a 78% gross margin and zero debt isn't a steal nor a gift: it's paying for quality at its price. Agentic AI is the unknown that keeps me up at night; that's why, a small portion.”
Analysis · July 2026
So when would be a good price for ServiceNow?
Today it trades below what we calculate. If you want us to tell you when that changes —or when the value itself moves because the company reported— we will email you.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.