Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin13.3%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin12.4%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
F
Years to Pay Off Debt5.2 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$3.0B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital-$1.5B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book8.36x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
B
Free Cash Flow$1.5B
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income30.1%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$868M
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About ServiceNow, Inc.
ServiceNow, Inc. provides cloud-based solution for digital workflows in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company provides asset management, integrated risk management, IT service management, Operational Technology management, Security Operations, strategic portfolio management, IT operations management products; customer service management product; field service management applications; and sales and order management services. It also offers human resources delivery; legal and contract operations; workplace service delivery products; app engine product; automation engine; platform privacy and security product; and source-to-pay operations. In addition, the company provides RaptorDB, a database built to manage workloads at scale; ServiceNow Impact that provides customers with software tools, guided plans, and AI-driven recommendations; customer support; and workflow data fabric. It serves government, financial services, healthcare and life science, manufacturing, Public Sector, retail, technology, and Telecom sectors through service providers and resale partners. The company has a strategic collaboration with Cohesity, Inc. to develop, operate, and safeguard autonomous AI agents and data with enterprise-grade reliability. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.
ServiceNow, Inc. provides cloud-based solution for digital workflows in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company provides asset management, integrated risk management, IT service management, Operational Technology management, Security Operations, strategic portfolio management, IT operations management products; customer service management product; field service management applications; and sales and order management services. It also offers human resources delivery; legal and contract operations; workplace service delivery products; app engine product; automation engine; platform privacy and security product; and source-to-pay operations. In addition, the company provides RaptorDB, a database built to manage workloads at scale; ServiceNow Impact that provides customers with software tools, guided plans, and AI-driven recommendations; customer support; and workflow data fabric. It serves government, financial services, healthcare and life science, manufacturing, Public Sector, retail, technology, and Telecom sectors through service providers and resale partners. The company has a strategic collaboration with Cohesity, Inc. to develop, operate, and safeguard autonomous AI agents and data with enterprise-grade reliability. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering ServiceNow, Inc. at $95.04.
The business passes only 1 of 6 of Graham's defensive criteria — well below his required standard.
At $95.04, the stock trades at a 786% premium to its Graham Number of $10.73. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.
Showing Key Metrics
Income Highlights
Metric
Q1 2026
Q4 2025
Gross Profit %
75.1%▼
76.6%
Operating Margin %
13.3%▲
12.4%
Net Income %
12.4%▲
11.2%
Diluted EPS
0.45▲
0.38
Balance Sheet Highlights
Metric
Q1 2026
Q4 2025
Q4 2024
Total Assets
$24.4B
$26.0B
N/A
Total Debt
$2.4B▲
$2.4B•
N/A
Working Capital
-$1.5B▼
$28M•
N/A
Years to Pay Debt
5.18
5.99
N/A
Cash Flow Highlights
Metric
Q1 2026
Q4 2025
Free Cash Flow
$1.5B▼
$2.0B
Owner Earnings
$868M
$851M
CapEx % of Net Income
30.1%
59.4%
Income Statement
2026
2025
Tax Rate For Calcs
0
0
Normalized EBITDA
937,000
758,000
Net Income From Continuing Operation Net Minority Interest
469,000
401,000
Reconciled Depreciation
258,000
212,000
Reconciled Cost Of Revenue
940,000
834,000
EBITDA
937,000
758,000
EBIT
679,000
546,000
Net Interest Income
82,000
100,000
Interest Expense
6,000
5,000
Interest Income
88,000
105,000
Normalized Income
469,000
401,000
Net Income From Continuing And Discontinued Operation
469,000
401,000
Total Expenses
3,267,000
3,125,000
Total Operating Income As Reported
503,000
443,000
Diluted Average Shares
1,040,000
1,047,000
Basic Average Shares
1,035,000
1,039,000
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
469,000
401,000
Net Income Common Stockholders
469,000
401,000
Net Income
469,000
401,000
Net Income Including Noncontrolling Interests
469,000
401,000
Net Income Continuous Operations
469,000
401,000
Tax Provision
204,000
140,000
Pretax Income
673,000
541,000
Other Income Expense
88,000
-2,000
Other Non Operating Income Expenses
88,000
-2,000
Net Non Operating Interest Income Expense
82,000
100,000
Interest Expense Non Operating
6,000
5,000
Interest Income Non Operating
88,000
105,000
Operating Income
503,000
443,000
Operating Expense
2,327,000
2,291,000
Research And Development
823,000
773,000
Selling General And Administration
1,504,000
1,518,000
Selling And Marketing Expense
1,216,000
1,150,000
General And Administrative Expense
288,000
368,000
Other Gand A
288,000
368,000
Gross Profit
2,830,000
2,734,000
Cost Of Revenue
940,000
834,000
Total Revenue
3,770,000
3,568,000
Operating Revenue
3,770,000
3,568,000
Balance Sheet
2026
2025
2024
Treasury Shares Number
38,626
18,498
Ordinary Shares Number
1,031,308
1,047,278
Share Issued
1,069,934
1,065,776
Total Debt
2,431,000
2,403,000
Tangible Book Value
5,708,000
8,265,000
Invested Capital
13,219,000
14,455,000
Working Capital
-1,548,000
28,000
Net Tangible Assets
5,708,000
8,265,000
Capital Lease Obligations
940,000
912,000
Common Stock Equity
11,728,000
12,964,000
Total Capitalization
13,219,000
14,455,000
Total Equity Gross Minority Interest
11,728,000
12,964,000
Stockholders Equity
11,728,000
12,964,000
Gains Losses Not Affecting Retained Earnings
7,000
19,000
Other Equity Adjustments
7,000
19,000
Treasury Stock
5,375,000
3,045,000
Retained Earnings
5,711,000
5,242,000
Additional Paid In Capital
11,384,000
10,747,000
Capital Stock
1,000
1,000
Common Stock
1,000
1,000
Total Liabilities Net Minority Interest
12,653,000
13,074,000
Total Non Current Liabilities Net Minority Interest
2,670,000
2,631,000
Other Non Current Liabilities
258,000
220,000
Non Current Deferred Liabilities
99,000
120,000
Non Current Deferred Revenue
99,000
120,000
Long Term Debt And Capital Lease Obligation
2,313,000
2,291,000
Long Term Capital Lease Obligation
822,000
800,000
Long Term Debt
1,491,000
1,491,000
Current Liabilities
9,983,000
10,443,000
Other Current Liabilities
571,000
311,000
Current Deferred Liabilities
8,030,000
8,314,000
Current Deferred Revenue
8,030,000
8,314,000
Current Debt And Capital Lease Obligation
118,000
112,000
Current Capital Lease Obligation
118,000
112,000
Pensionand Other Post Retirement Benefit Plans Current
220,000
196,000
Payables And Accrued Expenses
1,835,000
1,226,000
Current Accrued Expenses
1,408,000
827,000
Payables
427,000
399,000
Total Tax Payable
195,000
162,000
Accounts Payable
427,000
204,000
Total Assets
24,381,000
26,038,000
Total Non Current Assets
15,946,000
15,567,000
Other Non Current Assets
335,000
290,000
Non Current Deferred Assets
2,043,000
2,170,000
Non Current Deferred Taxes Assets
914,000
1,056,000
Investments And Advances
4,467,000
5,313,000
Investmentin Financial Assets
2,724,000
3,771,000
Available For Sale Securities
2,724,000
3,771,000
Long Term Equity Investment
1,743,000
1,542,000
472,000
Goodwill And Other Intangible Assets
6,020,000
4,699,000
Other Intangible Assets
1,479,000
1,121,000
Goodwill
4,541,000
3,578,000
Net PPE
3,081,000
3,095,000
Accumulated Depreciation
-1,961,000
-1,836,000
Gross PPE
5,042,000
4,931,000
Leases
438,000
433,000
Construction In Progress
145,000
117,000
Other Properties
831,000
806,000
Machinery Furniture Equipment
3,628,000
3,575,000
Current Assets
8,435,000
10,471,000
Other Current Assets
949,000
970,000
Current Deferred Assets
591,000
590,000
Receivables
1,713,000
2,627,000
Accounts Receivable
1,713,000
2,627,000
Cash Cash Equivalents And Short Term Investments
5,182,000
6,284,000
Other Short Term Investments
2,480,000
2,558,000
Cash And Cash Equivalents
2,702,000
3,726,000
Cash Flow
2026
2025
Free Cash Flow
1,529,000
2,000,000
Repurchase Of Capital Stock
-2,225,000
-597,000
Capital Expenditure
-141,000
-238,000
Interest Paid Supplemental Data
11,000
0
Income Tax Paid Supplemental Data
38,000
102,000
End Cash Position
2,710,000
3,732,000
Beginning Cash Position
3,732,000
2,734,000
Effect Of Exchange Rate Changes
-5,000
-3,000
Changes In Cash
-1,017,000
1,001,000
Financing Cash Flow
-2,236,000
-739,000
Cash Flow From Continuing Financing Activities
-2,236,000
-739,000
Net Other Financing Charges
-164,000
-142,000
Proceeds From Stock Option Exercised
153,000
0
Net Common Stock Issuance
-2,225,000
-597,000
Common Stock Payments
-2,225,000
-597,000
Investing Cash Flow
-451,000
-498,000
Cash Flow From Continuing Investing Activities
-451,000
-498,000
Net Other Investing Changes
28,000
12,000
Net Investment Purchase And Sale
987,000
597,000
Sale Of Investment
1,139,000
728,000
Purchase Of Investment
-152,000
-131,000
Net Business Purchase And Sale
-1,325,000
-869,000
Purchase Of Business
-1,325,000
-869,000
Net Intangibles Purchase And Sale
0
0
Purchase Of Intangibles
0
0
Net PPE Purchase And Sale
-141,000
-238,000
Purchase Of PPE
-141,000
-238,000
Operating Cash Flow
1,670,000
2,238,000
Cash Flow From Continuing Operating Activities
1,670,000
2,238,000
Change In Working Capital
208,000
826,000
Change In Other Working Capital
-473,000
1,596,000
Change In Payables And Accrued Expense
-189,000
467,000
Change In Accrued Expense
-439,000
460,000
Change In Payable
250,000
7,000
Change In Account Payable
250,000
7,000
Change In Prepaid Assets
-42,000
-185,000
Change In Receivables
912,000
-1,052,000
Changes In Account Receivables
912,000
-1,052,000
Other Non Cash Items
86,000
228,000
Stock Based Compensation
547,000
494,000
Deferred Tax
102,000
77,000
Deferred Income Tax
102,000
77,000
Depreciation Amortization Depletion
258,000
212,000
Depreciation And Amortization
258,000
212,000
Net Income From Continuing Operations
469,000
401,000
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $3.1B▲ $3.8B+22.1%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 78.9%▲ 75.1%-3.9pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 16.3%▲ 13.3%-2.9pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: 14.9%▲ 12.4%-2.5pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$3.8B/qtr (≈$15.1B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
0.84x current ratio
vs ≥ 2.0x
✅ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
$1.5B
vs Positive
Operating Cash Flow
$1.7B
Latest quarter · Buffett's cash reality check
ROIC
2.8%
Based on latest annual operating income
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Market Cap / Net Assets
8.4x
Net Assets: $11.7B
Asset Context — Software - Application
Software companies store most of their value in code, IP, recurring revenue, and customer relationships — none of which appear on the balance sheet under GAAP. Book value and Net Assets are poor proxies for intrinsic value here. Focus on ROIC, gross margin trajectory, and free cash flow instead.
⚠️Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.
Peers & Industry
No auto-detected peers for Software - Application. You can manually compare NOW against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.17%
Low — management has little skin in the game
Return on Equity (ROE)
4.0%
Weak — poor returns on equity
Return on Assets (ROA)
1.9%
Poor — assets are not generating adequate returns
Share Buybacks (Latest Year)
$1.8B
Management is returning capital to shareholders via buybacks
Debt Trend YoY
+1.2% YoY
Debt is roughly stable
Leadership Team
William McDermott
Chairman & CEO
Age 63
Pay: $8,069,306
1.721% of net income
Gina Mastantuono
President & CFO
Age 55
Pay: $2,166,155
0.462% of net income
Amit Zavery
President, Chief Product Officer & COO
Age 53
Pay: $4,081,523
0.870% of net income
Frederic Luddy
Founder & Director
Age 70
Pay: $40,000
0.009% of net income
Paul Fipps
President of Global Customer Operations
Age 52
Pay: $2,196,545
0.468% of net income
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
9.46%
97,501,594
Vanguard Capital Management LLC
6.59%
67,980,219
State Street Corporation
4.66%
48,058,492
Price (T.Rowe) Associates Inc
3.31%
34,109,888
JPMORGAN CHASE & CO
3.01%
30,996,941
Vanguard Portfolio Management LLC
2.44%
25,172,570
Geode Capital Management, LLC
2.37%
24,423,811
Morgan Stanley
2.26%
23,347,995
⚠️Current ratio below 1 — liquidity risk
Risk Analysis
Beta (Market Risk)
0.93
Low volatility — more stable than the market
Short Interest
5.9% of float
Moderate short interest
Debt-to-Equity
0.21x
Conservative balance sheet — low financial risk
Current Ratio
0.84x
Weak liquidity — current liabilities exceed current assets
52-Week Price Range
Low: $81.24Current: $95.04High: $211.48
Currently at 11% of 52-week range
ServiceNow, Inc. (NOW) fundamental analysis — Overall grade D based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $10.73. Margin of safety: 0%. Gross profit margin: 75.1%. Operating margin: 13.3%. Net margin: 12.4%. Market cap: $98.0B. Sector: Technology. Industry: Software - Application. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.