Is NOW Stock Oversold? Here's What the Latest Earnings Date Reveals About ServiceNow's Real Value

ServiceNow NOW shares have taken a 16.1% hit year to date—at first glance, a concerning sign. Yet beneath the surface, a different story emerges. While the broader Computer and Technology sector surged 19.6%, competitors like Oracle ORCL skyrocketed 75.8% and Pegasystems PEGA gained 15.3%, NOW’s pullback reveals something critical: the market may have simply repriced expectations.

The Valuation Puzzle: Premium Price, Premium Growth

Yes, NOW trades at a lofty forward 12-month price/sales of 12.31X compared to the sector’s 6.73X. But here’s where context matters. While Workday WDAY trades at 6.03X and Pegasystems at 5.16X, these multiples don’t capture NOW’s unique trajectory.

The real story lies in what’s driving that premium. ServiceNow isn’t just maintaining growth—it’s accelerating wallet expansion. In Q2 2025, the company landed 89 deals exceeding $1 million in net new ACV, including 11 megadeals over $5 million. More significantly, customers generating $20 million-plus in annual contract value jumped over 30% year-over-year. NOW ended the quarter with 528 customers each contributing more than $5 million in ACV, signaling deepening enterprise relationships.

Earnings Date Signals Positive Momentum Ahead

Looking at the numbers that matter most, analyst consensus for NOW’s 2025 earnings per share stands at $16.82—up a penny in the past 60 days and representing 20.83% growth year-over-year. For 2026, estimates have ticked upward to $19.84, suggesting 17.94% growth ahead.

On the subscription revenue front, NOW guided 2025 subscriptions to land between $12.775 and $12.795 billion, implying 19.5-20% growth on a non-GAAP constant currency basis. While this represents a slowdown from 2024’s 23% pace, it reflects the natural deceleration of a maturing enterprise software platform—not a broken business model.

For Q3 2025 specifically, NOW expects subscription revenues between $3.26 and $3.265 billion, signaling 19.5% YoY growth at constant currency. The consensus sits at $3.26 billion, indicating 20.2% growth versus the prior-year quarter.

Workflow Adoption: The Hidden Growth Engine

What Wall Street seems to be missing is NOW’s traction in workflow solutions. Technology workflows claimed 40 deals worth over $1 million in Q2, with ITSM, ITOM, ITAM, security and risk appearing in at least 15 of the top 20 deals. CRM and industry workflows landed in 17 of NOW’s largest 20 deals.

The real breakthrough? Workflow Data Fabric appeared in 17 of the company’s top 20 largest transactions. This integrated platform—combining data, analytics and agentic AI—positions NOW as an automation powerhouse. CRM workflow alone represents a massive untapped opportunity, bolstered by acquisitions like Logik.ai that drove 9 CPQ deals in June alone.

The latest Zurich platform release accelerates this narrative. Build Agent enables vibe coding at enterprise scale, allowing teams to generate production-ready applications from natural language instructions. Developer Sandbox and ServiceNow Vault Console round out the AI-first infrastructure, cementing NOW’s competitive moat.

Strategic Partnerships Amplifying Growth Potential

NOW’s partner ecosystem—NVIDIA, Cisco Systems, Amazon Web Services, Aptiv, Vodafone Business, UKG and Zoom—isn’t just window dressing. The NVIDIA collaboration alone is reshaping employee support through ServiceNow AI, with joint development of the Apriel Nemotron 15B model for intelligent decision-making. The companies plan to integrate select NVIDIA NeMo microservices into Workflow Data Fabric for accelerated data processing.

AWS integration eliminated enterprise data silos through bi-directional solutions. Cisco’s collaboration merged AI Defense with ServiceNow SecOps for holistic risk management. These partnerships aren’t one-offs—they’re structural advantages accumulating over time.

Why Now Is the Right Time to Buy

ServiceNow holds a Zacks Rank #2 (Buy) rating with a Growth Score of B. Expanding workflow adoption, a deepening partner network, positive earnings estimate revisions and rising customer concentration all support top-line acceleration. The stock may trade at a premium, but that valuation increasingly reflects justified expectations rather than irrational exuberance.

The earnings date ahead will likely confirm what the operational metrics already signal: NOW’s challenges are macroeconomic headwinds, not fundamental deterioration. For long-term investors, current pullback levels warrant serious consideration.