ServiceNow Stock: Buy the Dip? | NOW Stock Analysis

AI-generated source summary

ServiceNow (NOW) reported strong Q3 2026 financial results, exceeding expectations with high-end guidance and demonstrating robust growth in subscription revenues and free cash flow. Subscription revenues reached $3.988 billion, up 21% year-over-year, and total revenues were $4.106 billion, up 20.5% year-over-year. Remaining performance obligations stood at $13.65 billion, a 21% year-over-year increase. The company also raised its AI annual contract value target to $1.7 billion for 2026, a 70% increase from the beginning of the year. The report highlights strong customer adoption of AI solutions, with year-to-date consumption in production up more than 13x year-over-year. Despite a market downturn for SaaS companies earlier in the year, ServiceNow's performance indicates resilience and strong execution. Analysts project long-term EPS growth of approximately 24.47%, while the stock's forward P/E ratio has fallen to 21.65, near its lowest levels since early 2026. This valuation, combined with strong growth prospects, suggests a potential buying opportunity for investors, with an intrinsic value estimated at $142.71 per share, representing a significant upside from the current market price of $105.12.

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