ServiceNow's Workflow Adoption Rises: A Sign for More Upside?

ServiceNow NOW has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.

A strong and frequently updated portfolio is helping ServiceNow win customers on a regular basis. NOW had 72 transactions of more than $1 million in net new annual contract value (ACV) in the first quarter of 2025. The company expanded its customer relationships, reaching 508 customers with more than $5 million in ACV at the end of the reported quarter, which represents 20% year-over-year customer growth.

ServiceNow is extensively leveraging AI and machine learning technologies to boost the potency of its solutions. The company’s expanding Generative AI (GenAI) capabilities are noteworthy, as its total addressable market is expected to hit $275 billion in 2026. NOW’s strategy of upgrading the platform twice a year helps simplify customers' workflows and increase productivity. 

NOW’s expanding portfolio has been noteworthy. In May 2025, ServiceNow introduced its Core Business Suite, an AI-powered solution designed to streamline and transform core business operations, including HR, finance, procurement, facilities, and legal, by unifying workflows and automating processes across departments to improve efficiency, reduce time to value, and enhance employee experiences.

ServiceNow’s rich partner base, which includes the likes of Amazon, Microsoft, NVIDIA, Five9, Visa, Snowflake, Zoom, Siemens, Rimini Street, IBM, Genesys, Fujitsu, Equinix, Boomi and Infosys, is a key catalyst for future prospects.

NOW Faces Stiff Competition

NOW faces stiff competition in the workflow automation space from the likes of Pegasystems PEGA and UiPath PATH.

Pegasystems is benefiting from strong demand for its GenAI Blueprint solution, an agent that utilizes AI to combine the company’s best practices, as well as knowledge from clients and partners, to design enterprise workflow applications. More than 1,000 new Blueprints are being created every week, more than double from a few months ago.

Building on this momentum, Pegasystems recently expanded its PEGA Blueprint platform with advanced agentic AI capabilities to accelerate digital transformation by analyzing and converting legacy system assets into modern cloud-ready applications. The latest announcement streamlines legacy analysis, enabling faster, more informed application development.

UiPath remains a strong force in the booming Robotic Process Automation market, which is poised for substantial expansion over the coming years. UiPath’s end-to-end automation platform positions the company to seize opportunities as demand for AI-driven solutions surges.

NOW’s Share Price Performance, Valuation and Estimates

ServiceNow shares have lost 11.4% year to date against the broader Zacks Computer & Technology sector’s return of 7.5%. 

NOW Stock Performance

NOW stock is trading at a premium, with a forward 12-month Price/Sales of 13.60X compared with the Computer & Technology 6.59X. NOW has a Value Score of F.

Price/Sales (F12M)

The Zacks Consensus Estimate for second-quarter 2025 earnings is currently pegged at $3.54 per share, which increased by a penny over the past 30 days. This indicates a 13.10% increase year over year.

ServiceNow, Inc. Price and Consensus

ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote

The consensus mark for 2025 earnings is pegged at $16.54 per share, which has increased by a penny over the past 30 days, suggesting 18.43% year-over-year growth.

NOW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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