As of June 20, 2025, ServiceNow Inc's estimated intrinsic value ranges from $41.94 to $248.93 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $248.93 | -74.7% |
| Discounted Cash Flow (5Y) | $154.51 | -84.3% |
| Dividend Discount Model (Multi-Stage) | $230.10 | -76.6% |
| Dividend Discount Model (Stable) | $247.54 | -74.8% |
| Earnings Power Value | $41.94 | -95.7% |
Is ServiceNow Inc (NOW) undervalued or overvalued?
With the current market price at $982.08, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate ServiceNow Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.59 | 1.02 |
| Cost of equity | 6.6% | 10.6% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 18.3% | 19.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| After-tax WACC | 6.5% | 10.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $155 | $30,102M | 84.0% |
| 10-Year Growth | $249 | $49,644M | 73.0% |
| 5-Year EBITDA | $226 | $44,949M | 89.3% |
| 10-Year EBITDA | $308 | $61,963M | 78.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $549M |
| Discount Rate (WACC) | 10.5% - 6.5% |
| Enterprise Value | $5,215M - $8,389M |
| Net Debt | $(1,879)M |
| Equity Value | $7,094M - $10,268M |
| Outstanding Shares | 207M |
| Fair Value | $34 - $50 |
| Selected Fair Value | $41.94 |
| Metric | Value |
|---|---|
| Market Capitalization | $203271M |
| Enterprise Value | $201392M |
| Trailing P/E | 132.17 |
| Forward P/E | 114.37 |
| Trailing EV/EBITDA | 13.20 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.01 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $74.68 |
| Discounted Cash Flow (5Y) | 25% | $38.63 |
| Dividend Discount Model (Multi-Stage) | 20% | $46.02 |
| Dividend Discount Model (Stable) | 15% | $37.13 |
| Earnings Power Value | 10% | $4.19 |
| Weighted Average | 100% | $200.65 |
Based on our comprehensive valuation analysis, ServiceNow Inc's weighted average intrinsic value is $200.65, which is approximately 79.6% below the current market price of $982.08.
Key investment considerations:
Given these factors, we believe ServiceNow Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.