NOW
ServiceNow, Inc.
$136.08
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 13.6% above fair value
You pay
$136.08
Bear
$71.97
Fair
$119.80
Bull
$176.65
Bear
$71.97
-47.1%
11% stage 1 growth, 11% discount
Fair
$119.80
-12.0%
18% stage 1 growth, 11% discount
Bull
$176.65
+29.8%
23% stage 1 growth, 11% discount
Adjust Assumptions
17.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
43.7x
Market is pricing in (growth)
19.4%
vs 17.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (69 analysts)
$144.38
Divergence from AlphaVal
17%
Summary
Using a two-stage FCF DCF with 18% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $119.80 per share.
Warnings
Stock-based employee pay equals 112% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions