NOW's Veza Buyout Expands Portfolio: What's Ahead for the Stock?

ServiceNow NOW is expanding its portfolio with the planned acquisition of Veza, a well-known provider of AI-native identity security. The deal strengthens NOW’s security and risk portfolios by expanding into identity security, which will help enterprises better understand and control who and what has access to sensitive data, systems, applications and AI assets, significantly reducing enterprise risks.

The rapid adoption of agentic AI and autonomous workflows by enterprises is increasing the complexity of identities as the list now includes not only employees and partners, but also machines, applications, devices and AI agents. This has led to more advanced cyberattacks that can be addressed by Veza’s modern, unified and AI-native platform powered by its patented Access Graph, which maps access relationships across human, machine and AI identities. Veza’s technology provides enterprise security teams with continuous visibility, granular control and the ability to enforce least-privilege access across the enterprise.

Veza offers next-generation identity governance capabilities, including access reviews, access requests, centralized access hubs and real-time visibility that legacy tools struggle to deliver. Integrated with ServiceNow’s workflows, knowledge graphs and AI, Veza will also enhance the AI Control Tower by governing what AI agents can access and perform. In addition, it will add critical identity context to ServiceNow’s existing security and risk offerings, such as vulnerability response, incident response and integrated risk management.

ServiceNow is riding on an expanding partner base and acquisitions. This, along with an expanding portfolio and growing workflow adoption, bodes well for NOW’s top-line growth. ServiceNow raised the subscription revenue guidance for 2025 to $12.835-$12.845 billion, suggesting 20% growth on a non-GAAP constant currency (cc) basis and 20.5% on a reported basis from the 2024 reported figure.

However, this is slower than NOW’s subscription revenue growth rate of 23% in 2024. The company’s fourth-quarter 2025 guidance reflects tightening budgets of the U.S. federal agencies, which is expected to hurt subscription revenues.

Tough Competition Hurts NOW’s Prospects

NOW faces stiff competition from the likes of Atlassian TEAM and Salesforce CRM. Atlassian is a global leader and innovator in the enterprise collaboration and workflow software space. TEAM is poised to grow, given the rising demand for automated and improved communication systems within organizations. Atlassian is currently focused on selling more subscription-based solutions. Atlassian is making significant strides in the enterprise segment by signing more $1 million-plus deals. At the end of the first quarter of fiscal 2026, the company had more than 500 customers spending more than $1 million annually, indicating strong enterprise penetration.

Salesforce is focusing on enhancing its AI capabilities and data cloud business. Subscription and support revenues increased 10% year over year to $9.7 billion in the third quarter of fiscal 2026. Agentforce and Data 360 products drove annual recurring revenues 114% year over year to $1.4 billion. Salesforce now has more than 9,500 paid Agentforce deals
and 3.2 trillion tokens processed. Data 360 ingested 32 trillion records, up 119% year over year, including 15 trillion via Zero Copy, up 341%, and 390% growth in unstructured data processed. CRM now expects fiscal 2026 revenues between $41.45 billion and $41.55 billion.

NOW’s Share Price Performance, Valuation & Estimates

ServiceNow shares have dropped 25.8% in a year, underperforming the broader Zacks Computer and Technology sector’s return of 25%.

NOW Stock’s Performance

ServiceNow stock is overvalued, with a forward 12-month price/sales of 11.21X compared with the broader sector’s 6.72X. NOW has a Value Score of F.

NOW’s Valuation

The Zacks Consensus Estimate for fourth-quarter 2025 earnings is pegged at $4.35 per share, unchanged over the past 30 days, suggesting 18.53% year-over-year growth.

ServiceNow, Inc. Price and Consensus

 

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

ServiceNow currently carries a Zacks Rank #3 (Hold). 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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