ServiceNow NOW has been expanding its portfolio thanks to frequent acquisitions that included the likes of Logik.io, data. world, Moveworks and others in 2025. While Logik.io provided an AI-powered, composable Configure, Price, Quote solution, data.world is a well-known name in enterprise data cataloging and governance. The Moveworks’ acquisition combined ServiceNow’s agentic AI and intelligent workflows with the former’s intuitive front-end AI assistant, enterprise search and agentic Reasoning Engine.
The company is now expanding its footprint in the security domain through acquisitions. In the third quarter of 2025, ServiceNow’s Security and Risk business became its fifth business to cross the $1 billion annual contract value milestone.
NOW’s Veza acquisition strengthens security and risk portfolios. 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 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 also expanding its security portfolio with the Armis acquisition. The company will pay a whopping $7.75 billion in cash for Armis, which is a dominant name in cyber exposure management and cyber-physical security across IT, Operational Technology (OT), medical devices and other fields for companies, governments and critical infrastructure (OT, IoT, Cloud, and IoMT) worldwide. Armis acquisition expands NOW’s security workflow offerings and will drive greater AI adoption by strengthening trust across a rapidly expanding threat surface. Armis currently generates more than $340 million in annual recurring revenues, with more than 50% year-over-year growth.
Acquisitions, Partner Base to Drive NOW’s Top-Line Growth
Apart from acquisitions, ServiceNow benefits from a rich partner base. It 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 are 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. The company 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 up 114% year over year to $1.4 billion. Salesforce now has more than 9,500 paid Agentforce deals and has processed 3.2 trillion tokens. 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, suggesting 9-10% year-over-year growth.
NOW’s Share Price Performance, Valuation & Estimates
ServiceNow shares have dropped 27.4% in a year, underperforming the broader Zacks Computer and Technology sector’s return of 26.2%.
NOW Stock’s Performance
Image Source: Zacks Investment Research
ServiceNow stock is overvalued, with a forward 12-month price/sales of 12.01X compared with the broader sector’s 7.31X. NOW has a Value Score of F.
NOW’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fourth-quarter 2025 earnings is pegged at 87 cents per share, unchanged over the past 30 days, suggesting 19.2% 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).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
