ServiceNow Stock Halved to $102 Despite 22% Revenue Growth and $4.6B Cash Flow
ServiceNow shares have plunged roughly 50% from a $211 peak to about $102 despite 20% annual revenue growth and Q1 subscription sales of $3.67 billion, up 22%. EPS of $0.97 topped estimates by $0.17 and 2025 free cash flow rose 34% to $4.6 billion on $13.28 billion in revenue.
1. Stock Performance Decline
ServiceNow's share price has fallen from above $211 to about $102, marking a 50% decline and a 31% drop year-to-date driven by concern that agentic AI could reduce per-seat software fees.
2. Q1 Financial Results
In Q1 2026, ServiceNow reported subscription revenue of $3.67 billion, up 22% year-over-year, and non-GAAP EPS of $0.97, beating estimates by $0.17. For full-year 2025, total revenue reached $13.28 billion with free cash flow of $4.6 billion, up 34%.
3. Valuation and AI Strategy
At the current price of $102, the stock trades at a P/E of 61x compared with its seven-year average of 299x, marking its most attractive valuation relative to growth. Management expects AI-driven features like Otto and AI Specialist agents to contribute 30% of new contract value and targets $30 billion in revenue by 2030.
4. Outlook and Upcoming Catalysts
The next major catalyst is the July 22, 2026 earnings call, where management will update guidance. Continued AI product rollouts and adoption metrics will be critical in shaping investor sentiment and long-term growth trajectory.